Ontario cities find ‘workaround’ to PCs’ building application timeline

By Alan S. Hale August 18, 2023

Housing Minister Steve Clark and other PC cabinet ministers meet with big city mayors at Queen’s Park in June. (Twitter/Steve Clark)

Municipalities across Ontario have already found a way to circumvent the PC government’s attempt to make local governments refund property developers’ application fees if they miss decision deadlines, barely a month after the new rules took effect.

When the province passed Bill 109More Homes for Everyone Act, the government was aiming to give teeth to existing deadlines for municipalities to make decisions on development proposals by requiring cities to start gradually refunding application fees — which can run into the tens of thousands of dollars — when a decision was not made within the prescribed time frame.

Municipal Affairs Minister Steve Clark sold the idea as a way to incentivize municipalities to make their development application processes more efficient.

Instead, many Ontario towns and cities have come up with a workaround to protect themselves from revenue losses due to delays that may be beyond their control.

Bill 109 incentives cities to reject development applications: planning official

Before the refund requirement came into effect in July, some cities — including Toronto, Ottawa and Hamilton — began implementing a new mandatory “pre-application consultation process.”

Developers are required to work with city officials on an informal basis to make sure their application is complete before it is officially accepted by the municipal planning department, which is when the clock starts ticking towards a refund deadline — 90 days for zoning bylaw applications and 60 days for site plan control applications.

Gone are the days when developers could submit an application and work with planning staff through an official — and often time-consuming — process to perfect their application before it went to the local council for consideration, explained Stephen Robichaud, director of planning for the City of Hamilton.

“Under the old process, people could submit partial information, incomplete information or in some cases, substandard information, just to get their application into the system. That way, they would get feedback from the technical agencies, they could revise their studies and resubmit,” Robichaud said during an interview with Queen’s Park Today.  

“Under the new system, we don’t have the luxury of working on improving the quality of what gets submitted.”

The refund requirement also incentivizes municipalities to reject flawed applications rather than asking developers to redo components, which can take several weeks.

If an application revamp pushes the process over the deadline, the city is required to repay 50 per cent of the application fee. After 30 days, the required refund rises to 75 per cent, then 100 per cent after 60 days.

Whereas, if the city rejects the proposal outright, it pays back nothing.

A City of Toronto analysis from November estimated the city would have been forced to return 97.3 per cent of the application fees it collected on zoning bylaw applications — a total of $67.4 million — if the new refund rules had been in place in 2019. The city would also have had to cough up 98.5 per cent of site plan control application fees, to the tune of $558,500.

“Timelines do not take into consideration the inherent characteristics of development planning in Toronto given the complex urban environment, and ignore the reality that positive results are commonly achieved through collaboration that inevitably takes more time,” concluded the Toronto analysis.

It’s not clear if such rejections will end up being a common occurrence yet. The refunds only went into effect last month, so applications under the new rules are only now being referred to municipal committees and councils for decisions.

Robichaud says the new rules put all parties in an awkward position.

“[Developers] are now left wondering because they have no indication if staff is going to support it. They’re being told they have to spend tens of thousands of dollars on all these reports … and, at the end of the day, staff may come back and say, ‘We can’t support it because of unresolved issues,’” he said.

Committee witnesses warned PCs this would happen

The Residential Construction Council of Ontario (RESCON) believes these recent municipal reforms are “frustrating the public interest” Bill 109 aimed to address.

“This is not a solution; it’s a workaround. The whole intent of Bill 109 was to bring some accountability, transparency and streamlining to the process. There were always timelines included in the Planning Act — they just were not being respected,” Paul De Berardis, RESCON’s director of building science and innovation, told Queen’s Park Today. “This just bypasses those timelines.”

De Berardis estimates around half of Ontario municipalities have implemented a pre-application consultation in response to the new rules and that more are likely to follow suit.

The PCs were warned repeatedly that the refund requirement could lead to “unintended consequences” when Bill 109 was before the legislative assembly committee in April 2022.

“[We are] concerned about recent comments made by a number of municipal planners that they intend — and politicians — to simply reject applications rather than refund fees,” Susan Speigel of the Ontario Association of Architects told the committee.

Then-chair of the Ontario Big City Mayors Caucus Cam Guthrie offered the committee several scenarios in which a municipality could be caught out by the new rules.

“What if we are waiting for provincial approval on an aspect of an application before we can proceed? What if we have an incomplete application from a developer?” Guthrie said.

Building Industry and Land Development Association president David Wilkes predicted municipalities would be resistant to changing their systems but argued they had a “responsibility” to make those changes.

However, the bill cleared committee with no amendments.

RESCON president Richard Lyall — who also took part in the hearing — said the government should have listened and looked for ways to mitigate issues raised.

“If the intention is to make the process more predictable, timely and … advance housing approvals, then there is no point in introducing something that’s just going to be frustrated — especially if you have been alerted to that fact,” he said.

Asked about the workaround, Minister Clark’s office noted the refund rules were originally slated to take effect in January, but the province pushed them back to July 1 in order to give municipalities more time to prepare.

“Municipalities could avoid lost revenues by improving processes to support timely decisions,” said Clark spokesperson Victoria Podbielski. “We are focused on our long-term plan to create the right conditions for growth to increase all types of homes across the province.”