Government Relations Update, January 2020

JANUARY 8, 2020 The City of Toronto is reviewing its Non-Residential Development Charges (DC) Policy. The City is considering changes that will significantly affect our industry. We have outlined below the City’s initial proposals, our response and the time frame for the review. We will share further information as it is available.

Toronto’s Current Non-Residential DC Policy

  • As background, non-residential development in Toronto currently pays approximately $40 square/foot in DCs.

  • However, as a policy decision, the City exempts all floors above and below the ground floor in a non-residential/non-industrial development from paying DCs.

  • This means that commercial development only pays DCs on the ground floor.

City’s Proposals 

The City is considering changes to this DC exemption policy that will have a significant impact on our industry. Some of the potential changes under consideration include:

  • Increasing DCs to 50% of the full charge (~$20 square/foot) on the total square footage – all floors – no exemptions;

  • Increasing DCs to 100% of the full charge (~$40 square/foot) on the total square footage - all floors –no exemptions;

  • Redefining warehouse uses as non-industrial and charged the non-residential rate.

The City has retained Hemson Consulting to undertake the background study work on these proposals.

NAIOP Greater Toronto Chapter’s Response

  • NAIOP has been actively engaging with City Staff and political decision makers on this issue, along with its partners at REALPAC and the Financial District BIA.

  • We have been clear that these proposed changes will have a very negative impact on economic growth and development in the City and additional consultation and analysis is necessary.

  • NAIOP is working closely with its industry colleagues on a strategy to push back on these proposals, including the commissioning of an economic impact study on the City’s proposed changes.

Time Frame

  • Staff were initially targeting January 2020 to report to Executive Committee.

  • However, following our engagement, City Staff have decided to delay their report until March 25, 2020.

  • City Staff agree that further time is necessary to better understand the concerns we have raised with respect to the policy proposals and to better understand the impacts. This will allow us and our industry association colleagues time to review Hemson’s still-to-be-released report and provide our own analysis of the proposal’s impacts.

  • Further consultations with City Staff, Hemson and other industry stakeholders will be scheduled in January and February.

Next Steps

NAIOP will continue to work with City Staff, Hemson and other industry stakeholders on this issue moving forward. We will provide further updates for Greater Toronto Chapter members as we have more information.

 

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