Peel targeted for third-party audits as Province seeks to determine costs of super-charged development push 

The Region of Peel and its lower-tier municipalities are hopeful that having been selected for a provincial audit will give them the opportunity to address looming concerns over revenue loss, and help answer questions about funding for necessary infrastructure to support mandated housing development by the PC government’s Bill 23.

The Province recently announced it will be working with six municipalities to ensure municipal finances can support the increased housing supply legislated by the Bill, something many cities have said is impossible with their existing budgets. 

Under Bill 23, Mississauga has been asked to bring 120,000 new units online by 2031; Brampton, 113,000; and Caledon 13,000 as part of the government’s plan to accelerate the construction of new homes over the next eight years — a development push that has received significant backlash from residents, advocacy groups and municipalities for disregarding environmental protections, stripping revenues away from towns and cities and forcing growth into areas that do not have the infrastructure to support it. 

“The province intends to use these audits to reach a shared understanding of any potential or perceived impacts of the More Homes Built Faster Act as regards changes to development-related fees and charges,” a spokesperson for the Ministry of Municipal Affairs and Housing explained. “This aligns with the province’s previous commitment to ensure that there is no funding shortfall for housing-enabling infrastructure as a result of the More Homes Built Faster Act, provided municipalities meet or exceed their assigned provincial housing targets.

“These audits will inform the province’s efforts to ensure taxpayers receive maximum value for money and the best possible services.”

Along with the City of Toronto and Newmarket, the Province will be assigning facilitators to work with Peel Region, Mississauga, Caledon and Brampton on the audits.

The work by Queen’s Park could also reveal if Brampton has been adequately managing its finances under Patrick Brown, who has frozen the City’s budget almost every year since becoming mayor, failing to provide needed infrastructure, and is now claiming Mississauga owes its neighbour between $1 billion and $3 billion ahead of the looming dissolution of Peel Region. He has failed to provide any evidence, analysis or research to support his claims. 

Questions about spending under Brown were the focus of six forensic investigations launched last year, but cancelled by the mayor in August when he took advantage of council absences to pull the plug during a last-minute meeting he called to halt the probes.

It’s unclear if the provincial audit will open up all of Brampton’s books to learn what has been happening since Brown took control of City Hall.

The spokesperson for the Ministry explained in an email, “these municipalities were selected for the initial phase of the auditing process because they include a diverse range of governing structures (Single-Tier, Upper-Tier, and Lower-Tier) and include urban and rural communities that are poised for growth.”

The audit announcement was made prior to the Province’s introduction of legislation to break apart the Region of Peel over the next two years.

These audits will be used as a guide in the wake of the Hazel McCallion Act, which seeks to dissolve the Region of Peel by 2025. The Act, tabled by the PC government earlier this month, will, if passed, jumpstart the process to dissolve the two-tier system and make Mississauga, Brampton and Caledon independent municipalities. The legislation raises several questions about how the infrastructure and services currently provided by the Region will be handled by the independent municipalities. 
 

The PC government recently announced Peel and its lower-tier municipalities have been selected as four of the six municipalities to be audited.

(The Pointer files) 

Mississauga Mayor Bonnie Crombie told The Pointer she welcomes the announcement that Mississauga along with Peel Region will be included in the provincial audits, commending the PC government for its commitment to “make cities whole” by filling gaps in revenue created by the new legislation.

“Like many cities across the province, Mississauga is starting to feel the impacts of lost development charge revenues as a result of Bill 23,” Crombie said. “It’s my hope that these audits are completed quickly and that the province works to close the funding gap as soon as possible and ensure cities are compensated for all losses.

“The province has said that compensation will be tied to municipalities’ ability to meet or exceed their housing targets. Cities can speed up approvals and permits, but rubber stamps alone won’t build housing,” she added. “The housing targets must be seen as a collective goal and one that can only be achieved if everyone in the building and development process, along with all levels of government, step up to meet the challenge. 120,000 homes in 10 years is an ambitious target and one I think we can only meet as an independent Mississauga, a city that is ‘right-sized’ to run efficiently and develop creative solutions to the unique challenges before us.”

Ahead of the audits, the Region of Peel and its lower-tier municipalities have done their own preliminary research to determine the unprecedented financial demands of the PC government’s accelerated housing plan, which they have warned could cost them hundreds of millions. Mississauga and Brampton councils denounced Bill 23 upon its introduction, and one Brampton councillor dubbed it “the train wreck Bill” for its dire threat to City Hall finances, and the “devastating” consequences it could trigger that would financially cripple cities already facing growing infrastructure gaps.

The Association of Municipalities of Ontario estimated the legislation will cost cities and towns at least $5.1 billion by 2031, most of it pushed onto taxpayers. This does not take into account the billions that will be needed to create all the infrastructure, such as waste water, drinking water, storm water, community centres, libraries, roads, waste management, fire services, policing and paramedics to support the new homes.

Reports presented to Caledon and Mississauga councils in February,  state both municipalities are able to accommodate the mandated number of units, but only if the provincial government provides financial support to build the necessary infrastructure to service these homes. Earlier this year, during a visit to Mississauga Premier Doug Ford indicated the Province would make municipalities “whole” and provide financial support to build the required infrastructure needed to service the 1.5 million homes. But few details have been offered on when and how this assistance will be delivered. 

“It's going to have some significant financial impacts on our residents. And that's a huge concern for us as a municipality, in how we're going to be able to provide the services for the community without having to raise your taxes,” Caledon Mayor Annette Groves previously told The Pointer. 

Municipalities across the region have estimated millions in lost revenue as a result of Bill 23, and a severe lack of infrastructure to accommodate the mandated growth.

(The Pointer files) 

An overview presented by City staff to Mississauga Council in November revealed the City would lose an estimated $815 to $885 million in development charges for infrastructure over the next decade. In Brampton, staff have anticipated the City can expect to lose approximately $440 million based on the lost revenue from development charges and cash-in-lieu of parkland The potential loss in revenue from changes to the way cities can collect cash-in-lieu of parkland revenue is estimated to be $700 million to $1.05 billion over the next decade for Brampton. The Region of Peel staff projected a loss between $2 billion and $6 billion in lost revenue.

For Caledon, although financial impacts from Bill 23 have not been determined, Antonietta Minichillo, director of planning, stated that the province has not yet made it clear how they will help provide funding to the municipalities. 

“Given the concerns the Town has expressed over Bill 23 in our housing pledge, we welcome the audit. This process will assess the impact of the Bill in a greenfield growth community like ours where infrastructure and community amenities are needed for new development,” Groves said in a recent statement. “As we prepare for growth the Town is continuously improving our processes, we appreciate the feedback and recommendations from the province.” 

Without compensation from the provincial government, the erosion of revenue forecasted by staff across the four municipalities as a result of Bill 23 will make it next to impossible for local governments to fund the infrastructure required for the mandated hyper-growth. For example, without a corresponding increase to provincial grant funding, Mississauga City staff previously told council City Hall would need to cover the cost of lost revenues either through reducing services or transferring the price tag onto the tax bills paid by property owners. In Brampton, to make up this lost revenue, past reporting from The Pointer determined it would require an 80 percent increase to the current property tax rate for homeowners. 

A presentation being made to the Region in February revealed it will need approximately $20.4 billion between now and 2031 to build the critical infrastructure necessary to support the hundreds of thousands of housing units mandated for Peel by the PC government, an exponential increase, from about 100,000 new units to 250,000, by 2031. These losses could see residents pay at least 10 percent more for property taxes with large increases on their utility bills as well, regional staff warned. 

Despite these crippling numbers, Peel Region chair Nando Iannicca said Peel has a “strong and consistent history of excellent financial management and service delivery. Our internal audit process is both robust and effective, and staff at all levels provide strong value-for-money for taxpayers every day,” he said. “We expect that any outcomes of the proposed audit would reflect this strong track record.”

The Province has yet to indicate whether it will provide future support for infrastructure outside of critical services (roads, water and wastewater). The PCs have failed to explain how provincial infrastructure such as hospitals, schools, GO Transit, roads and other provincial services will be paid for and built in just eight years when the 1.5 million homes are supposed to be completed. This has left municipalities in a choke hold, scrambling to prepare for the growth while facing the pressures of funding the infrastructure to accommodate it, with no money budgeted by the PC government.

Bonnie Crombie has been fighting for Mississauaga’s independence for nearly a decade, a crusade started by her predecessor Hazel McCallion.

(The Pointer files) 

“As the government undertakes these audits and their regional governance review to identify efficiencies and ensure taxpayers receive maximum value for money, I’m confident they will arrive at the conclusion that we are not only strong fiscal managers and stewards of taxpayers' money but that an independent Mississauga is what is in the best interests of our taxpayers and residents,” Crombie explained.

“I look forward to getting the audit process underway and learning who the regional facilitators will be for Peel Region, so we can best support the government in delivering on its housing goals and best serve the residents of Mississauga.”

Once the bidding and selection process is complete, the audits will be conducted later this year, according to the Ministry. The audits will demonstrate how the selected municipalities have managed their funds, delivered services and made decisions regarding local infrastructure projects, it explained. 

“The findings of the audits will be used to help develop future provincial policies and programs supporting long-term municipal financial sustainability and housing-related infrastructure investments.”

Email: [email protected] 

Twitter: @mcpaigepeacock 

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