Ontario’s biggest cities said they could lose out on millions of dollars in provincial funding for housing-related infrastructure due to factors beyond their control unless the government makes a simple change to the criteria.
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The provincial government announced in August that it would give up to $1.2 billion over three years under a Building Faster Fund to municipalities that meet at least 80% of their provincially assigned housing targets.
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But the Ontario Big City Mayors group has written to Municipal Affairs and Housing Minister Paul Calandra to ask him to allow municipalities to qualify for a piece of the fund based on how many building permits they approve rather than on housing starts.
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Burlington Mayor Marianne Meed Ward, who is the chair of the Ontario Big City Mayors group, said there are tens of thousands of units that have been approved by municipalities, but developers haven’t started construction because of high interest rates, supply chain issues or labour shortages.
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“So municipalities will potentially be penalized for something that is completely out of our control,” she said in an interview.
“We are quite happy to be judged based on what we actually do.”
Calandra did not immediately reply to a request for comment.
The fund is set to be used for housing-enabling infrastructure and other projects that support community growth, such as roads and water lines. It was announced after municipalities had been raising concerns for months about a provincial law that cuts some of the fees developers pay, which the communities use to fund housing-enabling infrastructure.
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But the Association of Municipalities of Ontario had said that law creates a $1-billion shortfall each year for municipalities. The government cut the development charges as a way to spur more building as it tries to get 1.5 million homes built by 2031, but the municipalities said those homes will need infrastructure such as sewer lines.
Former municipal affairs and housing minister Steve Clark contended that municipalities were sitting on billions of dollars in reserve funds and launched third-party audits of municipal finances in six communities to see if the municipalities have a shortfall in funds for housing infrastructure. If so, the province will make them “whole,” Clark said.
The first phase of those audits is set to wrap up by the end of the year.
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