Ottawa Mayor Mark Sutcliffe says the city needs financial support from other levels of government to make up for the lost revenue it expects will be associated with a provincial housing bill.
In a speech Wednesday at a special city council meeting to discuss the city’s 2023 budget, Sutcliffe said that if the city does not receive such support, it will face significant budget pressures in the coming years.
“If the provincial and federal governments don’t support the financial gaps we have in transit and other areas, if we don’t receive funding to address the lost revenue associated with Bill 23 and if we don’t receive support to build the housing we need over the next 10 years, we will face significant budget pressures in 2024 and beyond,” he said.
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Bill 23, dubbed as the More Homes Built Faster Act, is Ontario’s attempt to quickly build more housing units.
But since it passed the bill in November, Premier Doug Ford’s government has received criticism because of measures in the new law that allow for the reducing or exempting of development fees normally paid to the city.
The mayor said in a November letter to Steve Clark, the province’s municipal affairs and housing minister, that the bill would result in a $130 million loss and leave an infrastructure funding gap.
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“I want to encourage you again to extend the consultation period before the legislation is passed, and to consider the dramatic financial implications on the City of Ottawa of the changes before proceeding with the bill,” Sutcliffe wrote at the time.
Some municipalities have argued that the Ontario government’s decision to freeze, reduce and exempt fees developers pay to build affording housing, non-profit housing and some rentals will be costly for them.
The fees typically go into city coffers to build new homes and other infrastructure, and some cities have said that they will have to raise property taxes to recuperate the losses.
In response to municipalities’ concerns, Clark promised a third-party audit of the finances of “select municipalities” in November.
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The audit was intended to show whether or not municipalities would be unable to fund housing-related infrastructure and services because of the revenue loss due tot he bill. Clark promised to make them whole if that was the case.
But months later, Sutcliffe told reporters that he has not heard of any movement on the audit since it was announced.
He said that Clark reassured him in a phone call that the province has committed to keeping the City of Ottawa and other municipalities in Ontario whole on the impacts of the bill.
“We’re counting on him for that,” said Sutcliffe. “We’re expecting the province to work with us on that and deliver the funding we need to offset any of the shortfalls resulting from Bill 23.”
A 2023 draft budget for the city was tabled on Wednesday, which was built on the premise that the province lives up to that promise. It includes $129 million towards housing and homelessness.
The province did not respond to a request for comment.