Homeowners will have to pay for benefits to developers: St. Catharines Mayor Mat Siscoe defends program

A compromise was reached at last week's Niagara Region Council meeting—one that could cost taxpayers tens of millions of dollars and leave the Region financially burdened for decades. 

The central issue was the Region's ongoing practice of offering substantial cash grants to developers through Community Improvement Plans (CIPs) and other grant programs in an effort to encourage development in Niagara. Councillors have agreed to extend these programs for another 18 months, despite little evidence to show they work and dire warnings from staff that there could be a significant impact on the Region’s budget.

The Region’s grant programs operate with minimal oversight, leaving the decisions about which developments receive funding to the lower-tier municipalities. The majority of Niagara’s cities and towns have CIP programs of their own, and when funds are approved by local councils, they receive matching dollars from Niagara Region. 

This has resulted in millions of taxpayer dollars being funneled into high-end, luxury developments when the intent of such programs is to generate development that will benefit the community, i.e. affordable housing, catalyze economic development or help clean up contaminated lands. 

As previously reported by The Pointer, these grants were set to expire on October 1st. If allowed to lapse, the Region would have ended a program that KPMG auditors had criticized for delivering little value to the Region or its taxpayers. However, just three weeks before the deadline, St. Catharines Mayor Mat Siscoe introduced a motion to extend the programs for an additional three years. The resolution reached at Council last Thursday will instead allow an extension to 18 months. Mayor Siscoe, supported by Niagara Falls Mayor Jim Diodati, said increasing development costs and interest rates are the main reasons for continuing the program.  

Siscoe has emerged as the leading advocate for the continuation of these programs. Those opposed have described them as "corporate welfare" and accuse the Region of using taxpayer money to subsidize luxury housing. In defending the programs, Siscoe argues the incentives help reduce the tax burden on residents, claiming they "actually make the region money" and deliver a return on investment that benefits taxpayers. He provided no evidence to support these claims and notably did not address the KPMG audit, which concluded the exact opposite. 

“We have been unable to find a valid statistical correlation between what you spend in incentives and how your assessment grows,” KPMG representative Oscar Poloni told councillors in 2019. “There is no proven incremental impact of your incentives.”

Essentially, the growth Niagara was paying to spark, would have occurred without the money given to developers. 

Poloni’s comments came after KPMG measured a host of regional outcomes that were supposed to benefit based on the money given to builders who in turn were supposed to help create badly needed features, such as affordable housing units. 

Along with finding little evidence to support the guiding principle of the CIP programs, KPMG also found that about a third of the money doled out did not go toward projects that supported regional priorities and there was “inconsistent and insufficient” monitoring to ensure the applicant was following through on its commitments. 

The report suggested that reducing or eliminating these incentives could be a key way for Niagara to ease its financial burden. 

Siscoe has dismissed concerns from critics who have objected to public funds being directed toward high-end developments as “great rhetoric,” and argues that terms like "high-end" and "luxury" have no meaning in the housing discourse and are often used to oppose developments people simply don’t want.

While the deal reached at the Region has extended the life of these controversial programs, it also poured gasoline on the debates about the role of taxpayer money in supporting private development, particularly when it comes to projects from large development companies and consortiums. The Harbour Club, a Port Dalhousie condo project from Valour Group and SDR Group that plans to bring “exclusive” lofts and “estate residences” to the St. Catharines waterfront, got millions from taxpayers. 

The project on Lakeport Road will transform the historic Lincoln Fabrics building into a ritzy condo with 120 units and a 9-storey addition. It’s receiving approximately $7.12 million over 10 years, funding that is meant to assist with environmental remediation on the site. 

The Lincoln Fabrics building (top) is set to be redeveloped into a luxury condo project.

(Image from Google Streetview, rendering from The Harbour Club) 

Speaking in opposition to the continuation of the programs, resident Herb Swatzky stated, “you can put my taxes towards a lot of things, like shelters for the homeless, infrastructure and affordability,” he said. “If it is not the job of a developer to build affordable housing, it is not my job as a taxpayer to guarantee their profits.”  

The report provided by staff is clear the incentives were always intended to be used for developments “that would not otherwise happen without public funds” and that are in accordance with Council policy. The building of truly affordable housing is an often cited example and is something staff has tried, without success, to have the program address. The staff reports have raised serious concerns, warning that the program’s continuation would have a "significant impact on the Region’s annual budget" and that the required budget increases to fund these grants do not align with the Council’s strategic priorities. The region is flirting with legal risks with respect to bonusing (giving obvious and undue advantages using taxpayer dollars to certain private sector entities that competitors do not enjoy), the report warns. 

The Niagara Region has been using incentive programs since 2002 and the practice has grown steadily as developers demand more and councillors respond. It now represents the single largest discretionary item in the budget at more than $23 million, and this does not include the funds paid by the lower level municipalities. The staff report notes that the total funding required by this extension is “unknown”, but states it will limit the ability of the Region to fund programs that are aligned with Council’s Strategic Priorities. The example given in the report of a program that will not be properly funded by extending these programs is a “purpose-built rental housing program”, suggesting that the continued funding of projects such as luxury waterfront condo developments actually impedes the development of housing for lower and middle-income earners that is desperately needed throughout the region.

The “compromise” motion that was passed on Thursday night directs staff to “collaborate with the local area municipalities on a new incentive program that takes into account current market conditions and the enhanced housing mandate”. The results of that collaboration will be reported to Council by January 1st, 2026. This will give Council time to discuss the situation before the 18-month extension expires.

In the meantime Niagara Regional council has greenlit the granting of millions of dollars to developments that, by their own admission, do not address the needs or priorities of the Region.

“We’re in a position right now where we’re going to be looking at an eight percent increase in taxes and I can guarantee you now, while looking through this chamber, that we are going to have councillors going after several departments” asking them to do more with less, Councillor Tom Insinna (Fort Erie) said. 

He said because council approved this compromise motion, they will be forced to search for ways to “nickel and dime” other departments to get the proposed budget increase down to 7 percent or 6 percent. 

One thing was made very clear by Thursday night’s debate: taxes are increasing, and these incentive programs for luxury developers are a contributor to that. It’s unclear what Niagara residents get in return. 

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