Sunday, January 27, 2013

Region Waives Industrial Development Charges

Under something called the Development Charges Act, the Province allows Municipalities to collect fees to help offset the “costs of growth.”

New growth – residential, commercial, or industrial– applies additional pressures on municipal infrastructure and services. For example, new residential development areas often require additional water and waste water services. Or, if hundreds of new homes are built, new residents place pressures on roads and other municipal services – everything from recreational services, to library usage, to fire protection. This “pressure” means additional costs to add trunk water lines, to widen collector roads, or to build new facilities.

Many years ago, existing property tax-payers would have paid for these additional municipal infrastructure and services. Many felt that that lacked fairness, and that “new growth should pay for new growth.” Those on the other side of the argument felt that new growth should pay no more than its fair share.

Thus, a balance is sought where new growth should not create a financial burden on existing residents of the community while the existing residents should not enjoy a financial benefit at the expense of new residents.

Both the Region and the Town of Pelham have been collecting Development Charges (DCs) for some time. Development Charges, also previously known as Impost Fees or Capital Levies, must be enacted by a special bylaw and be renewed no less than every five years.

After a year-and-a-half of study and consultation, the Region adopted a new DC bylaw in July 2012, and the new charges came into effect on September 1. Based on the calculated and forecasted infrastructure costs, the charge for non-exempted industrial development increased from $2.22 per square foot to $5.16.

In mid-November, representatives from the Niagara Industrial Association (NIA) approached the Region and appealed for a reduction or waiving of the fees. Despite the Region’s industrial incentives – like exemptions for the redevelopment of former industrial sites, exemptions for expansions up to 50% of a plant’s size, and the recently approved Niagara Gateway Zone incentives – the NIA said they needed a total exemption in order to compete with other jurisdictions and to create jobs.

In early-December the Development Charges Task Force agreed with the NIA and recommended a two-year exemption of Regional DCs; it was further recommended that during the exemption period, staff must track the results and report on the “return on investment” before a further exemption will be granted.

On January 17, 2013 Regional Council approved the two-year waiver for Industrial Development Charges. I hope that the move will encourage the creation and continuation of much-needed manufacturing jobs across Niagara.