Mississauga demands PCs address ‘undue strain’ on City Hall caused by reckless housing legislation

After a year that exposed Doug Ford’s reckless leadership, the City of Mississauga is demanding his provincial PC government include enough money in its 2024 budget to support ill conceived housing legislation. 

Under Bill 23, 120,000 new units are to be constructed in Mississauga by 2031, enough to house a mid-size city. The PCs have failed to explain how billions of dollars will be provided for roads, subsurface infrastructure, community centres, libraries, schools, fire stations, police divisions, paramedics, transit and other features needed to support hundreds of thousands of new residents. 

Changes under the legislation to the way municipalities have traditionally collected fees from developers for a range of infrastructure needed to support new homeowners have left cities scrambling to plan for the massive growth mandated by the PCs.  

In 2023, after the PC government backtracked on Greenbelt land swaps, municipal urban boundary expansions and the planned dissolution of Peel Region, each flip-flop under Ford’s chaotic decision-making made it more difficult for municipalities to plan for their own future. 

Now, as the Province terminates a series of financial audits it promised would provide clarity to municipalities on the financial impacts of Bill 23, the City of Mississauga is demanding assistance with the billions of dollars in infrastructure needed to service the surge of new homes. 

An overview presented by City staff to Mississauga Council in November 2022 reported the municipal government would lose an estimated $815 million to $885 million in development charges for infrastructure over the next decade. Region of Peel staff projected between $2 billion and $6 billion in lost revenue. This does not include the billions that will be needed to create infrastructure such as waste water, drinking water, storm water and waste management, on top of all the other previously mentioned services. 

Without compensation from the Province, the erosion of revenue forecasted by staff 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, leaving municipalities in an impossible situation.

City staff previously told council that without a corresponding increase to provincial grant funding, City Hall would need to cover the cost of lost revenues either through reducing services or transferring charges that used to be covered by developers, to Mississauga’s property-taxpayers. They will also have to pay for all the other costs, unless the PCs figure out a plan to cover their own hyper-ambitious housing strategy. 

In December, Minister of Municipal Affairs and Housing Paul Calandra announced in a slew of legislative changes that the government had decided to terminate the audits meant to help answer questions about funding for infrastructure to support mandated housing development under Bill 23. The reversal was part of a larger trend by the provincial government under Ford’s leadership. Municipalities across Ontario had been optimistic the audits would address looming concerns over revenue losses.

“Instead, the province will engage in consultations with its municipal partners on the impacts of the More Homes Built Faster Act and municipalities’ ability to fund growth-related infrastructure that will support the construction of more homes, including a review of the five-year phase-in of development charge increases and fee refund framework,” a December 13 press release states.

“The goal of the consultations will be to inform potential legislative changes for the government’s upcoming Housing Supply Action Plan that would enhance municipalities’ ability to invest in housing-enabling infrastructure (water, wastewater, local roads, etc).”

Municipalities, Mississauga among them, and their elected officials have repeatedly warned of the financial repercussions of Bill 23, which puts additional pressures on municipal budgets as city staff search for funding to accommodate the infrastructure and amenities that will be needed to support the mandated growth. But those warnings have gone unheeded. 

Since Bill 23 was enacted, calling for 1.5 million new homes across Ontario by 2031, municipalities have been asking the PCs to close the funding gap.  

For years, Mississauga has provided written submissions to the provincial and federal governments as part of their pre-budget submission process. The annual practice includes recommendations that shape the priorities for the City’s advocacy efforts for the year ahead. 

For 2024, a report presented to a January 10 general committee meeting revealed staff are recommending that Mississauga’s pre-budget submissions focus on compensation for losses due to housing legislation; a new/fair deal for Mississauga (after the Province pulled the plug on Peel’s dissolution); provincial support for key financial priorities; funding for transit projects; and investments that make an impact on climate change. Once the recommendations are finalized, they will be submitted to the federal and provincial government.

The City’s 2023 submission previously warned that “Without compensation, and limited revenue tools at our disposal, the City and our taxpayers could be facing an even more difficult year ahead” — a reality that remains consistent with the 2024 budget asks — as Mississauga continues to face external financial pressures from Bill 23, the lingering economic impacts of the COVID-19 pandemic and the ongoing pressure of higher costs due to recent inflation.

Housing Minister Paul Calandra announced a series of legislative changes on December 13, cancelling the dissolution of Peel Region and terminating the financial audits intended to provide municipalities with clarity on revenue losses from Bill 23.

(Government of Ontario) 

Staff have said while the City understands the critical need to create new housing supply, especially affordable units, Bill 23 will make it even more difficult for cities to build the necessary infrastructure to service these new homes. The 120,000 new units mandated for Mississauga by 2031 — the same amount of homes in less than eight years that it previously took thirty years to build — putting “undue strain on city resources.”

“Increased housing targets necessitate equally increased infrastructure in support,” the City’s 2024 budget submission states. “Provincial legislation, housing targets, and Ministerial Zoning Orders have all increased this burden and provincial supports are needed to ensure communities have the necessary infrastructure in place to build. The city requires provincial and federal funding to meet these infrastructure requirements.”

Mississauga has been holding out for the Province to follow through with its commitment to “make cities whole” as a result of the revenue losses they will face from Bill 23. 

In May, cities and towns felt some hope when the Province announced it would be working with six municipalities to ensure local finances can support the increased housing supply, something many cities have said is impossible with only the property tax base to rely on for revenue. At the time, a spokesperson from the Ministry of Municipal Affairs and Housing said, “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,” keeping in line with the PCs’ previous commitment to ensure there would be no funding shortfall for housing-enabling infrastructure under Bill 23, “provided municipalities meet or exceed their assigned provincial housing targets.”

In 2023, ahead of the release of the provincial and federal budgets, the City called on the Province to pause the “implementation of Bill 23 and fully compensate Mississauga for any and all financial losses incurred as a result of the legislation including, but not limited to, losses related to development charges and cash in lieu of parkland.” 

“To build complete communities within world-class cities, municipalities require new sources of revenue beyond the property tax. The demands of delivering services to properties, while maintaining existing infrastructure in a state of good repair, and building new amenities, is more than our budgets can bear,” the 2023 submission stated. 

“Cities need the support of federal and provincial partners to not only fund critical infrastructure, but also provide support for our operations.”

In the early days of Bill 23’s implementation, Mississauga conducted its own preliminary research to determine the unprecedented financial demands of the PC government’s accelerated housing plan. 

Municipalities across the region have estimated billions in lost revenue as a result of Bill 23, and a massive infrastructure gap.

(Alexis Wright/The Pointer) 

City staff are currently estimating an additional eight to 10 percent property tax increase will be required to pay for lost revenues due to Bill 23. 

According to Mississauga’s 2024 budget submission, the combined losses to the City and Region would mean an increase of $500 or more on average on residential tax bills per home (valued at $730,000) and an increase of at least $180 on water bills. The submission notes these costs would come with savings for developers, which include up to $560 million less for new parks and public spaces and $325 million less for growth-related infrastructure (roads, sewers, community centres, etc.) over 10 years, that “will go directly to developers with no guarantee that homes will be built or that they’ll be affordable.”

Reports to Mississauga councillors have stated the City will be 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. 

In August, during the 2023 Association of Municipalities of Ontario annual meeting, Ford introduced the Building Faster Fund — an incentive that “will reward” municipalities who meet the PCs’ ambitious housing targets and threatens those who don’t comply. The up to $1.2 billion in funding over three years is contingent on municipalities meeting or exceeding the housing targets they have pledged to achieve by 2031 as part of the PC government’s housing plan. The fund is meant to support housing-enabling infrastructure and other related costs that support community growth.

Under the program, municipalities that reach 80 percent of their annual target each year will become eligible for funding based on their share of the overall housing supply goal and their performance compared to their annual assigned targets. Performance, the Province explained, will be evaluated by comparing the municipality’s number of housing starts and additional residential units created annually against the annual target — a requirement Ontario Big City Mayors (OBCM) has requested the Province reconsider and consult on further, noting it “unfairly penalizes municipalities who do not have control over housing starts.”

Premier Doug Ford and his PC government have failed to provide clarity to municipalities on how they will be able to fund the infrastructure needed to support incoming growth.

(Government of Ontario) 

In November, the government made another lackluster funding announcement in an attempt to follow through with its promise to make municipalities “whole” when it introduced the Housing-Enabling Water Systems Fund. It included $200 million over three years to help municipalities “repair, rehabilitate and expand critical drinking water, wastewater and stormwater infrastructure.” The government maintains the funding will “support the province’s rapidly growing population, unlock more housing opportunities and spur economic growth” and will help “municipalities build critical water infrastructure that would not otherwise get built”. 

The City of Mississauga argues in its latest budget submission that the Building Fast Fund, and the water/waste water funds announced in 2023 “are not sufficient” to compensate Mississauga for its financial losses. Along with OBCM, the City criticizes the funding programs’ use of a municipality’s housing starts, which is something beyond their control.

While Mississauga demands adequate financial support, the Province recently reached a deal with the City of Toronto that will see additional funding to help the City get infrastructure for new housing. As part of the new deal, the PCs agreed to provide the City with up to $1.2 billion in funding support for transit, infrastructure and housing, among other priorities in Toronto — on the condition that it meet or exceed the province’s housing targets, identify and make available surplus city lands for building homes and increase density near transit corridors through the use of municipal planning tools such as official plans.

As municipalities present their pre-budget submissions for the year ahead, the Association of Municipalities of Ontario (AMO) also released its recommendations for the 2024 provincial budget in January. “Long-standing structural problems have combined with growth pressures, economic factors, social challenges and provincial policy decisions to push municipalities to the brink.” 

In January 9 remarks from Brian Rosborough, executive director of AMO, he stressed the current funding arrangements between the province and municipalities “undermine the social and economic prosperity of Ontario.” He added, “Municipal councils are concerned about how much more can be raised through property tax and user fee increases,” noting that expanding the tax base is what “is required in the face of the increasingly complex challenges of providing the services and infrastructure needed for a thriving provincial economy.” 

Rosborough said that in 2024, many municipalities will need to significantly increase property taxes to address a “perfect storm” of factors, including growth pressures, inflation, and “recent policy decisions that have pushed municipalities to the brink.” As part of the Association’s requests, AMO is calling on the provincial government to commit to a joint review of revenues, costs, financial risks, and a detailed analysis of Ontario’s infrastructure investment and service delivery needs. 

“Municipalities are accountable for housing-enabling infrastructure. They make critical decisions that can unlock housing and meet the demands of Ontario’s growing population,” he said. “Meeting this ambitious target will require significant investments in essential municipal infrastructure. And they need a strong partner in the Government of Ontario to ensure the policy levers — and the funding — are available to plan, finance, and construct the necessary infrastructure to support growth across the province.”

The 2024 Ontario budget is expected to be released by the end of March. 
 

Email: [email protected] 

Twitter: @mcpaigepeacock

At a time when vital public information is needed by everyone, The Pointer has taken down our paywall on all stories to ensure every resident of Brampton, Mississauga and Niagara has access to the facts. For those who are able, we encourage you to consider a subscription. This will help us report on important public interest issues the community needs to know about now more than ever. You can register for a 30-day free trial HERE. Thereafter, The Pointer will charge $10 a month and you can cancel any time right on the website. Thank you