DEVELOPMENT CHARGES ACT, 1996 / LOI DE 1996 SUR LES REDEVANCES D'AMÉNAGEMENT
MUNICIPAL ELECTRIC ASSOCIATION
CONTENTS
Wednesday 23 April 1997
Development Charges Act, 1996, Bill 98, Mr Leach /
Loi de 1996 sur les redevances d'aménagement, projet de loi 98, M. Leach
Canadian Taxpayers Federation
Mr Paul Pagnuelo
Municipal Electric Association
Mr Don Kelly
Toronto Real Estate Board
Mr John Vail
Mr Fareed Khan
Mr Von Palmer
STANDING COMMITTEE ON RESOURCES DEVELOPMENT
Chair / Présidente: Mrs Brenda Elliott (Guelph PC)
Vice-Chair / Vice-Présidente: Mrs Barbara Fisher (Bruce PC)
Mr DominicAgostino (Hamilton East / -Est L)
Mr John R. Baird (Nepean PC)
Mr DavidChristopherson (Hamilton Centre / -Centre ND)
Mr TedChudleigh (Halton North / -Nord PC)
Ms MarilynChurley (Riverdale ND)
Mr Sean G. Conway (Renfrew North / -Nord L)
Mrs BrendaElliott (Guelph PC)
Mrs BarbaraFisher (Bruce PC)
Mr DougGalt (Northumberland PC)
Mr PatHoy (Essex-Kent L)
Mr BartMaves (Niagara Falls PC)
Mr John R. O'Toole (Durham East / -Est PC)
Mr Jerry J. Ouellette (Oshawa PC)
Mr Joseph N. Tascona (Simcoe Centre / -Centre PC)
Substitutions present /Membres remplaçants présents:
Mr JohnGerretsen (Kingston and The Islands / Kingston et Les Îles L)
Mr GillesPouliot (Lake Nipigon / Lac-Nipigon ND)
Mr ErnieHardeman (Oxford PC)
Mr MarioSergio (Yorkview L)
Clerk / Greffière: Ms Donna Bryce
Staff / Personnel: Mr Ray McLellan, research officer, Legislative Research Service
The committee met at 1634 in committee room 1.
DEVELOPMENT CHARGES ACT, 1996 / LOI DE 1996 SUR LES REDEVANCES D'AMÉNAGEMENT
Consideration of Bill 98, An Act to promote job creation and increased municipal accountability while providing for the recovery of development costs related to new growth / Projet de loi 98, Loi visant à promouvoir la création d'emplois et à accroître la responsabilité des municipalités tout en prévoyant le recouvrement des coûts d'aménagement liés à la croissance.
CANADIAN TAXPAYERS FEDERATION
The Chair (Mrs Brenda Elliott): Colleagues, we'll begin our hearings on Bill 98, An Act to promote job creation and increased municipal accountability while providing for the recovery of development costs related to new growth. Our first presenter this afternoon is Mr Pagnuelo. Welcome, sir. We do apologize for the delay this afternoon, but those are the rules.
Mr Paul Pagnuelo: Good afternoon, Madam Chair and committee members. The Canadian Taxpayers Federation welcomes the opportunity to comment on Bill 98, which deals with development charges as a way in which municipalities can require those who develop land to contribute to the capital costs necessary to service new development.
It is an organization that's dedicated to advocating and protecting the common interests of all taxpayers. I have to emphasize we play no favourites. We don't favour, say, individuals over businesses, homeowners over tenants, small businesses over big businesses, permanent over seasonal residents, residential over commercial or farm property owners, or long-established property owners in a community over new ones.
Our focus is fair taxation for all and to ensure that governments at all levels provide services which taxpayers are willing to support and that they do so at the most affordable cost. The fact is that when it comes to using government services, there is no free lunch. Government services cost money and that means someone has to pay for them. Governments have no money of their own. Whenever governments spend a dollar, it's a dollar that came from taxpayers.
What we find extremely annoying are politicians who make wild claims, when justifying a spending initiative like a lavish new city hall or a community centre with a bocce ball court, that it costs taxpayers nothing. Unless they believe in Santa Claus, the Tooth Fairy and the Easter Bunny, where do they think the money came from to pay for the expenditure?
While browsing the Web recently, we came across the home page of Tim Jones, who's mayor of Aurora. He had the following to say about development charges:
"Currently, the Ontario provincial government is reviewing what municipalities can include when charging developers who expand the size of our communities.
"Before development charges, municipalities charged lot levies to build parks, provide for expanded amenities like community centres etc, and these were fairly open-ended. Now the province has regulated what municipalities can charge for and up to what level of service that would include (usually based on the current level of service). This was to protect the builder or developer from getting gouged by overly ambitious municipalities.
"To most municipalities, there is one guiding principle in future growth, especially in these tight economic times of reduced/eliminated provincial grants and financial supports: Growth must pay for growth, especially in the area of infrastructure and community level of service. It is not reasonable or fair to expect the existing taxpayer to foot the bill for new growth.
"Currently, development charges include water and sewer infrastructure, storm drainage, transportation, elec-trical, waste management, fire and police capital services, plus recreation, library, health, social and cultural services that require expansion because of growth. The building and development industry are lobbying to have everything except water, sewer, storm, roads and raw parkland removed. This will ultimately mean existing residents will have to pay way more in taxes. In Aurora, that adds up to a 25% tax increase based on the next 10 years of planned growth to support the capital costs of expanded services in the other areas. This is not growth paying for growth.
"If this becomes the case, we will see councils halt all plans for growth for economic reasons, and for any plan that does proceed, municipalities might post signs that might read:
"`Notice to All Potential Home Buyers
"`Welcome to Aurora's first provincially mandated second-class subdivision. The developer and builders will be making every effort to convince you to buy a new home for $4,000 to $7,000 less (unless they decide to keep it as profit) which is:
"`Safe without fire protection;
"`Green without parkland; and
"`Blessed With a Quality of Life Second to All without recreation and library facilities.
"`Govern yourself accordingly!'
"Would you buy in such a development? If the province wants to help the building industry, it should stick to the user-pay principle that it has been applying to other areas of services and ensure that growth pays for growth by keeping the development charges intact!"
When I come across comments like those of Mayor Jones, I'm reminded of the story of the strongest person. This is a story where the local bar was so sure that its bartender was the strongest man around that they offered a $1,000 bet. The bartender would squeeze a lemon until all the juice ran into a glass and hand the lemon to a patron. Anyone who could squeeze one more drop of juice out of the lemon would win the money. Many people had tried over time -- weightlifters, longshoremen -- but nobody could do it.
One day a scrawny little man came in, wearing thick glasses and a polyester suit, and said in a tiny, squeaky voice, "I'd like to try the bet." After the laughter had died down, the bartender said, "Okay," grabbed a lemon and squeezed away. Then he handed the wrinkled remains of the rind to the man. The crowd's laughter turned to total silence as the man clenched his fist around the lemon and six drops fell into the glass. As the crowd cheered, the bartender paid the $1,000 and asked the man: "What do you do for a living? Are you a lumberjack, a weightlifter, or what?" He replied, "Heck no, I'm the development charges officer for the municipality."
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The point of the story is that development charges are a great way of squeezing the owner of a new home or business property dry. Development charges are simply another mechanism to increase municipal government revenues without having to face the wrath of the general tax base. Expenditures for many of the eligible services to be funded by development charges, under both the existing Development Charges Act and those proposed under Bill 98, would never see the light of day if local politicians had to face their voters and justify why their property taxes were going up.
Development charges are also a backhanded way of committing all property owners to future tax increases to pay for the ongoing operating costs associated with a capital expenditure. They're a classic example of taxation without representation. Mayor Jones and others who think like him are wrong when they equate their use of development charges to the user-pay principle. Development charges are for the most part nothing more than a tax grab disguised as a user fee.
In many cases, the users of the services where the capital costs have been funded by development charges are getting a free lunch at the expense of others. To suggest that developers and builders will profit by the changes proposed by Bill 98 is not only inflammatory but also very misleading. Development charges don't eat into their profits because they're passed on to the purchasers of the property just as any other cost is.
The Canadian Taxpayers Federation does not object to user fees. In fact, we believe that they are a fairer method and means of funding certain types of government services because all taxpayers are not burdened with having to subsidize specific users or beneficiaries. However, the line has to be clearly drawn and defined as to what types of services can be traced to specific beneficiaries. Services which benefit the general community cannot be characterized in this manner and the suggestion that the owners of properties should pay extra for them is fundamentally wrong when it comes to tax fairness.
For example, although Bill 98 does not relate to education development charges, there's a general principle which does apply. Building new schools is an ongoing pressure with a growing population, but no government flinches in asking senior homeowners or businesses to fund general education. In other words, it is inconsistent to link new capital school construction to new subdivision homeowners while ignoring the lack of a link to other ratepayers without school-aged children who are asked to pay for education funding for the general good of society.
And where is the consistency in asking the owner of a new property to pay for the capital costs of a new police cruiser or firehall, when that same owner will be billed, as will every other property owner in a municipality, to pay for the replacement of an existing police cruiser or the repairs to an existing firehall used in another part of the municipality?
What about the inconsistency which exists in the tax treatment of the purchaser of an existing property and that of a new property? A family with two young children, purchasing an existing home, where the current owners have no children, pay nothing in development fees for new community centres, libraries etc, even though they may be adding an additional burden on existing services, whereas that same family purchasing a new home would. Why should the existing owners of that property, say a retired couple, be expected to pay development charges for downsizing to a new seniors development in that same community?
Costs associated with new developments should not be separated from general taxes to the extent that they relate to general municipal costs. New homeowners will add to the municipal tax base and that new revenue should cover any incremental increase to the costs of general services -- services such as policing, fire protection, garbage collection, transit, arenas, community centres, libraries, roads etc; that is, services that are paid out of general tax revenues for other established subdivisions and that are non-specific services which benefit ratepayers as a whole.
Established subdivisions do not pay any specific additional charges for these items which were put in place out of general revenues years ago. For instance, they do not pay for road repairs or rebuilding in their areas, except out of general property taxes, which new subdivision owners will also contribute to. The same is true for upkeep and maintenance on community facilities.
In conclusion, we believe that development charges are discriminatory and that they unduly penalize and hurt the owners of new properties. Development charges are an inhibitor to development, and by discouraging immigration to a municipality they reduce the potential for expansion of the local tax base and the economic spinoffs of more consumers, businesses, jobs and investment locating in that municipality.
Ontario's economic potential is bright but we are competing both nationally and globally. Erecting or retaining onerous tax barriers to the attraction of wealth-creating human capital makes no economic or political sense.
If the owners of a new property should be financially responsible for certain infrastructure, such as the building of new roads and sidewalks, street lighting or the extension of water and sewer lines to their property, then fairness dictates that the owners of properties in established areas should equally be responsible for the capital costs of building, repairing or replacing similar infrastructure within their neighbourhood. Such costs could be amortized and debentured and reflected on property tax bills as a local improvement tax, separate from the general municipal levy.
Bill 98 is a timid step in the right direction in attempting to reassess who should pay for what at the local municipal level, but it falls well short of putting an end to the free lunch concept and the introduction of a system which is fair and equitable to all taxpayers in a municipality.
Rather than spending unproductive time creating innovative new tax schemes to suck even more out of taxpayers' disposable incomes, municipal governments should be directing their energies towards reducing local tax burdens by providing cost-effective and efficient services to their citizens, thus making their communities an attractive place in which to live, work and invest.
The provincial government can assist in the process by scrapping the use of development charges altogether and by introducing replacement legislation which ensures a much fairer means of allocating capital costs to taxpayers. Thank you for the time this afternoon to address the committee.
The Chair: Thank you very much. We have two minutes for questioning for each caucus.
Mr John Gerretsen (Kingston and The Islands): Thank you very much, Mr Pagnuelo. As usual, your presentation is very interesting and sheds a different light on these issues once again. I take it you feel that any additional costs relating to new development ought to be paid for over a period of time by that new development through a local improvement tax.
Mr Pagnuelo: Yes, we do. Again, I need to emphasize that if that's the decision -- and we think that's probably the wise decision to go for in terms of certain services or certain infrastructure costs -- then that same principle has to apply to established neighbourhoods. If the new home owner is expected to pay for the costs of a new road in front of their home, then when it comes time in an established neighbourhood for a road that is now 15 or 20 years old to be replaced, it should be the neighbours in that neighbourhood who pay for the capital cost of rebuilding that road and not coming out of general tax revenues. That then provides fairness and equity to all concerned.
Mr Gerretsen: Can you just expand on that one last statement that you make in your presentation, that you want the government to introduce replacement legislation which ensures a much fairer means of allocating capital costs to taxpayers. What specifically do you have in mind there, sir?
Mr Pagnuelo: Again, let's do away with development charges and let's reassess -- and the legislation should just really cover capital costs. The legislation should take a fresh, brand-new approach to municipal costs altogether. How do we pay for municipal costs? There are a variety of ways: through user fees; through parcel taxes, which is something that's now being used in British Columbia to partially avoid the impact of AVA; and then general levies.
But over and above that, if there are certain infrastructure costs which are very specific to, let's say, a street or to a subdivision, then we need to say, "Should those capital infrastructure costs be paid for by those in that particular community or should they be spread among the entire municipality?"
If the decision is that they should be really paid for by those specific users, whether it's watermains and sewers, whether it's roads, whether it's new street lighting, then that same principle has to apply not only for new subdivisions but also established neighbourhoods. So we're saying, if we're going to go that route and if we're going to look at this whole issue of tax fairness at the municipal level, then let's do it right and let's not do it piecemeal. That requires a basic rethink about how we charge for local municipal services.
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Mr Gilles Pouliot (Lake Nipigon): Thank you. A renewed pleasure indeed. Welcome back. You sure did a job on us when we were the government, Mr Pagnuelo, and if I was to take my shirt off I still can prove that the scars -- it will take a political generation to heal, sir. But certainly, I respect you and I respect your opinion as the champion -- you're the man -- as the defender of taxpayers at whatever level. You are driven by a mission.
In line with this, you make a plea with respect to users pay, but then you stop short, cognizant that at times we have to have the collective or the general fund pay for other things. For instance, Miss Jones, who's 74 years old, slips in the bathtub -- it's not a bar joke -- and dislocates her hip. She doesn't have any money, so we will pay for Miss Jones; we're on the waiting list, that's not a problem.
I see you do identify some hard and soft services and you relate them, you focus them, to development charges. When you buy a property you buy the hard services -- the sewer and water, lighting, fire protection. But you also buy the soft services -- you buy the museum, you buy the quality of life, you partake of the library. So at one time it becomes quite difficult to differentiate between what is nuts and bolts. Clean running water and the air that you breathe etc, sort of go hand in hand.
I'm not trying to impute motive. I'm sure that the marketplace will dictate that the developers pass some savings along to that class of consumer, but when all is said and done, the money has to come from someplace. If I'm a present homeowner, will I not be asked to subsidize you as you're welcomed to the new subdivision in our municipality?
Mr Pagnuelo: I don't see why that should necessarily be the end result. If we're looking at the need for expanded libraries or expanded police or fire services, the additional tax revenue that's coming in from those new properties on an annual basis should be sufficient to cover the incremental cost of providing those additional services.
Again, if I use the analogy -- let's say a new subdivision is created and so they say, "Okay, we need a new firehall now to service that part of the municipality, and the cost, or part of that cost, should be recovered in terms of the capital costs through development charges." If that is to be the concept and the principle, then fairness would argue that an existing firehall in an older part of the municipality -- if it's now 50 years old and is crumbling and needs to be rebuilt, the residents who were serviced by that firehall in the municipality should pay for the capital costs, and not all taxpayers in the municipality.
What do we do when we start thinking along those lines? We're really taking that municipality now and breaking it into several smaller ones. Fire protection services the community as a whole, and if the argument is made that if you in that new subdivision are getting this new fire station to service that area, then you should pay for it, again, fairness would dictate that if there was a fire in the old, established part of the municipality and they needed to bring a truck or two trucks from that fire station, the taxpayers in that subdivision should be reimbursed.
Mr Pouliot: If you wish to get re-elected.
Mr Pagnuelo: We just think there are certain things where those extra costs are going to be made up through the additional tax revenues and if a municipality does not want growth, then simply pass bylaws and planning laws that prohibit growth.
If the community is striving for growth in its area, wants to attract new investment, new businesses, which all result in new jobs, and getting less people on the unemployment rolls, creating their own salaries, resulting in more tax revenues, then the municipality has to say, "Are we actually shooting ourselves in the foot by bringing in prohibitive development charges that are really in many ways discriminatory?"
Mr John O'Toole (Durham East): Thank you very much, Paul. I'm always pleased to see you here, as you see your member operating in the House. As you're one of my constituents, I really have to be accountable to the great taxfighter, and thank you for bringing a bit of humour. I think there's some truth in it. I'm kind of envisioning the taxfighter versus the lemon squeezer. I might compare the lemon squeezer basically to a tax-and-spend type government getting every cent out of the taxpayer that they could get.
On a more serious note, I've got a couple of points. When I was on local and regional council and indeed as a school trustee, I never really felt that the capital issues within budget were as significant as the operating. I saw the operating as never going away and always increasing, exponentially I might add, with growth.
Mr Gerretsen: What kind of council were you on, anyway?
Mr O'Toole: You were on the same council. Take a look at Kingston; just the same problem. It exponentially increased. It's the operating that we can't manage. The capital, in fact, has been going down. They've been building schools cheaper than they were in the 1990s -- square-foot costs etc. My question to you is just sort of looking at that. Do you espouse the system you responded to Mr Gerretsen, that the local improvement initiative was the way to handle infrastructure cost? When I heard you answering Mr Pouliot's question, you seemed to soften down and say there's common-shared benefits.
I suspect the question I have for you is: Is it the level of service that we should be dealing with which is in this legislation, which is the most important thing, looking at the longer-range escalating cost? Have you looked at that aspect of the legislation and do you think that is the right thing to be looking at? What they've been doing is averaging up -- more of everything, higher levels of service -- in their development charge formula. Do you think that's a good idea, the averaging of levels of service?
Mr Pagnuelo: I think what you have to focus on is initially the specific services themselves. When I'm talking about a local improvement tax, I'm saying that if we're going to be fair and equitable, then certain infrastructure costs are to be borne exclusively or almost exclusively in terms of capital costs by new home owners. You have to apply that same principle to that same type of infrastructure in established neighbourhoods where it may have to be replaced or upgraded.
As long as we've got that fair equity, whether we do it that way or whether we pay for everything through general revenues doesn't really matter much. But what we want is to ensure that there's a level playing field, that one type of homeowner is not discriminated against unfairly or unduly. If the decision is that certain infrastructure will be paid for by those specific homeowners who receive that benefit directly, whether it's a new sewer and watermain, whether it's a rebuilt road or a new road, the question then becomes, do you charge them for it right now, in one lump sum payment, or do you distribute those costs over a period of 15, 20, 25 years, the expected life of that particular infrastructure?
Perhaps the latter is the fairer way to go for most people, particularly if you're also dealing with that fair principle within established neighbourhoods. So you give people an opportunity to repay that capital cost over a reasonable period of time as part of their annual tax bill, but separate from the general municipal levy, which would apply to everyone for those services which are deemed to be of benefit to the community as a whole, whether it's the local community centre, the firehall, the arena, what have you.
Mr O'Toole: There's an answer there and I appreciate that. Good paper, thank you.
Just so you know, colleagues, Mr Baird is unable to be here this afternoon.
The Chair: Our time has expired. We do thank you for taking the time to come this afternoon to make your thoughtful presentation. It's appreciated.
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MUNICIPAL ELECTRIC ASSOCIATION
The Chair: I'd next like to call Mr Kelly, please, from Burlington Hydro and the Municipal Electric Association. Welcome. Could you please introduce your colleagues as well for the record?
Mr Don Kelly: On my left is Wasim Hassan, who is a staff member with the Municipal Electric Association, and on my right is Dave Baldwin, who is a consultant with DHB Associates, a consultant to the Municipal Electric Association.
I'd like to thank you for the opportunity to make this presentation. I am Don Kelly. I'm general manager of Burlington Hydro and my appearance today is on behalf of the Municipal Electric Association.
The Municipal Electric Association represents 306 local utilities which distribute approximately 75% of the electricity used in the province. The balance is sold by Ontario Hydro directly to large-use customers and to retail customers in generally less-populated areas of Ontario.
The MEA struck an ad hoc committee to review Bill 98 and on February 19 of this year mailed a submission to the Minister of Municipal Affairs. A copy of that document is attached to the written copy of this presentation.
We welcome the commitment made by Minister Leach at the initial standing committee hearing on Bill 98 at Oakville on March 24 of this year to remove the condition that 10% of the cost of hydro systems, along with water and sewer systems, roads, fire and police services, be contributed by the local utility from other sources.
Complications arising from the copayment provision were commented on in our submission referred to just now. With this issue having been addressed and the draft regulations which accompany Bill 98 having been issued, the balance of this presentation concentrates on specific areas where we believe the proposed legislation can be reworded to avoid potential problems in the future. In each area we discuss, we make proposals that we hope will clarify the intention of the legislation and make it more equitable in operation.
First, the 10-year average level of service: Paragraph 3 of subsection 5(1) specifies that the increase in the need for service attributable to the anticipated development must not include an increase that would result in the level of service exceeding the average level of that service provided in the electrical service area over the 10-year period immediately preceding the preparation of the background study.
The draft regulations concerning average level of service provide that this may be calculated as either the average level of service provided in the entire municipality or the average level of service provided in the part of the municipality to which the development charge bylaw will apply.
Service levels for such services do increase over time as a result of legislative and technology requirements. We question the use of an average which reflects previous lower standards. We suggest wording that would reflect current expectations in service standards, specifically: "That the need for electrical grid service be based on the level of improvements required by the anticipated development consistent with municipal practice, provincial policy and standards set forth by other regulatory agencies."
The treatment of uncommitted excess capacity: Upgrades to service by both business and residential customers of a utility are accommodated from the excess capacity specifically implemented to sustain this type of electrical growth associated with development. What may appear to be uncommitted excess capacity is really slated for future electrical growth attributable over time to these new developments.
Paragraph 4 of subsection 5(1) states: "The increase in the need for service attributable to the anticipated development must be reduced by the part of that increase that can be met using the municipality's uncommitted excess capacity. How the uncommitted excess capacity is determined may be governed by the regulations."
Draft regulation 5(1) states: "Excess capacity is uncommitted excess capacity unless, either before or at the time the excess capacity was created, the council of the municipality expressed a clear intention that the excess capacity would be paid for by development charges or other similar charges."
Bill 98 requires that no future development charge recovery occur with respect to the increased need for service that can be met via the uncommitted excess capacity.
In order to ensure that uncommitted excess capacity built into works entered into prior to the application of Bill 98 is recovered from future development, we suggest that the regulations should include the following statement:
"That the cost of oversizing, which has been financed by utilizing other revenue sources, be recoverable from future benefitting development in order that those revenue sources be repaid."
Industrial expansion exception: Clause 2(3)(c) states that a development charge may not be imposed for development if the only effect of the development approval involved is to "permit the enlargement of the gross floor area of an existing industrial building by 50% or less."
Section 4 addresses the development charge permissible where an industrial building enlargement exceeds 50%. As written, this provision invites multiple building permit applications, each involving an expansion of under 50%, to avoid any development charge.
The proposed amendment to this section to address the issue mentioned above is: Offer the industrial expansion exemption on a one-time basis for each site.
Reserve fund draws: Section 35 states, "The money in a reserve fund established for a service may be spent only for capital costs determined under paragraphs 2 to 6 of subsection 5(1)."
The concern is that a development charge may be calculated on the basis of capital cost estimates for specific projects. Section 35 would appear to restrict reserve fund draws to those specific amounts. In many cases, spending may vary from estimates as projects are redefined or even substituted. Thus, the provisions are unduly restrictive on the use of such funds and could interfere with the provision of services needed by growth.
The proposed amendment to address this issue: Section 35 or a relevant regulation should make clear that a municipality/local board has flexibility to alter its development charge spending plan, provided that the draws are entirely for growth-related work as defined in Bill 98 and for the category of services applicable to each reserve fund.
For the record, two of the issues raised in our submission of February 19, 1997, have subsequently been addressed. These are the copayment provisions and draws from existing reserve funds. They are therefore not dealt with in this presentation.
In conclusion, it is very gratifying to see the government modify this bill as a result of legitimate concerns raised by stakeholders and allow 100% development charges for utilities. This alteration helps us to keep electricity rates competitive to encourage development in the province.
Thank you again for the opportunity to make this presentation.
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The Chair: Thank you very much. We will begin questioning with the NDP caucus, please.
Mr Pouliot: Thank you, gentlemen, for your time and your presentation. Indeed, you've gone to the very heart of clause-by-clause and a commendation indeed to offer some food for thought by way of amendments that you would like to see before the act receives third and final reading and royal assent and becomes law.
You preach for your parish and you do so very well. One cannot accuse you of prejudice. Under the umbrella of competitiveness, of passing the savings along, you become quite imaginative, and I think that's fair.
Would I be right in sensing in your presentation that at the municipal level -- councils, municipal government -- you are seeking assurance that the benefits, and the opportunities therefore, on the one hand could be taken away with a new class of taxes on the other hand at the council level? Because council can apply for a new class of taxes. For many of them it's a matter of revenues and it's also a choice between the residential level for which there are many, many, many and a large or small conglomerate, be it the industrial sector or the commercial sector. Are you afraid that once you finish the celebration that Bill 98 has gone through -- development charges are being reduced, in some cases eliminated -- the council will come right back with a new class of taxes and say, "Okay, we need the money"?
Mr Kelly: It's difficult for me to forecast what a council would do. We, speaking on behalf of all of the utilities, are obviously pleased with the direction that Bill 98 is going. The development charges for electric utilities are directly applied against rates. Our source of money is either capital contributions or rates. Printing money is not one of the options.
We definitely do apply and have applied any of the fiscal benefit accruing from development charges directly against rates. In Burlington's case, for instance, we have had rate freezes for 1994 and 1995; a 3% rate reduction in 1996 and a half a per cent rate reduction in 1997. I think that other municipalities have been doing -- I like to think we're the best -- at least equally as well.
Mr Pouliot: By way of supplementary, when I read "oversizing," would the parallel or the synonym be valid if I were to mention "overcapacitated," with an eye to fill the requirements of the future?
Mr Kelly: Yes. The point we are trying to make is that, being specific, one of the components of an electrical infrastructure is substations. Substations cannot be built in one-kilowatt increments. Technically and economically, the average incremental size is in the order of 10,000 kilowatts. This could be perceived as excess capacity. In reality, it is not because it is going to be utilized for future growth as it occurs. As that station reaches capacity, an additional one is built.
So we are a little concerned about what we think is perhaps ambiguity or wording that could be misinterpreted in application to Bill 98 and we have suggested wording that we think clarifies this and avoids the possibility of misinterpretation.
Mr Pouliot: I am fully understanding and cognizant that engineers like to build things. This is what they do best. You find yourself overcapacitated and then you make an attempt, you cast at recouping some of your capital costs. Would I be wrong as a citizen, a consumer, to assume that this all comes out in the wash? You've just talked about a 3% reduction in your rate in the not-so-distant past, that it all comes out in the wash, that your capital costs are already incorporated in your rates and that your debentures, which is another cost, are reflecting this. Doesn't it all come out in the wash, or have I missed market elements and conditions over the past 30 years? You would like to recoup some of the costs on the development charges to reflect what you have been so kind to provide society with, your service. Your presentation says: "Give us back some of the money that we put in. Because we were wise and in our wisdom said we must address the future as well as the present, we built big. Now it's time for payback."
Mr Kelly: No, I wouldn't say that. I would say that in the case of the specific example I used of substations, we follow specific design criteria, at which point we have to add additional capacity, which is common, I would say, to most municipalities in the province.
I don't know if your thrust is, are we trying to recover overexpenditures from the past for providing unnecessary overcapacity? If that is the question, my answer is no. In the distribution sector, which we are in, unlike Ontario Hydro, in which you are dealing with generation, in which you are looking at a time frame from original decision to throwing the switch and closing a generating station of seven to 15 years, our time frame in putting in distribution assets is a lot tighter because the material can be secured faster. We don't have to go through the same design processes. It's a much simpler, for lack of a better word, area than the area of generation and transmission.
Mr Pouliot: Excellent and fair.
Mr Ernie Hardeman (Oxford): Thank you for your presentation. I just wanted to go over a couple of areas quickly. On level of service -- and there's been considerable debate about how one should define a level of service for development charges -- in your presentation you pointed out "consistent with municipal practice." Maybe you could clarify for me that that's not what I think it means. That would mean it would be the same as it presently is, that whatever level of service the municipality deems appropriate now when it's doing the development charges would be the level of service that it could put into the development charges for recouping for the future. Would that be the right interpretation of "consistent with municipal practice"?
Mr Kelly: What we're trying to address here is concern that "not to exceed a 10-year average level" is perhaps a little too rigid. I can appreciate the concern, say, from the development industry, which might view this as an attempt to goldbrick a design to have super-reliability that is above and beyond what is required. That is not our intent.
What we are facing is increasing expectations and demands by our customers, particularly as regards power quality and service reliability, particularly in those areas that do a lot of data processing with computer equipment or utilize computer equipment for process control. There are guidelines that are established by various agencies: There are some basic regulatory standards, like the Canadian Standards Association standards; there are guidelines from our own Municipal Electric Association, Canadian Electrical Association etc.
We are concerned that if there is not a little more flexibility built into the system, we may be either deliberately underdesigning and providing what have become inadequate service levels, or inappropriately funding the increased service levels out of general rate revenue. We're cognizant or aware of the concern that we don't abuse this privilege, and that's why we came up with the wording we did. We think it provides the flexibility without unduly opening the door for abuse by utilities.
Mr Hardeman: One concern that's been expressed by the development industry in particular relates to, if you don't have some form of averaging or a way of establishing a level of service, it becomes somewhat unfair, as even in your case -- this is true in other services too, but particularly in yours; we'll refer to yours. If the standards have gone up, if you've changed the design patterns or the design functions of the service and the new growth has to pay for that higher level of service while the existing growth is still on the other level, immediately upon paying your development charges and becoming a ratepayer or a user, a consumer in that system, your rates will now cover the upgrading of the others. Do you see that as a problem with not setting a standard level of service?
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Mr Kelly: I can certainly see that as a concern. Do I think the world will end if the act maintains the rigidity? No, I do not. It is merely a suggestion which we feel would be advantageous and worthy of consideration.
Mr Mario Sergio (Yorkview): Mr Kelly, thank you very much for coming down and making a presentation to our committee. Just a couple of questions within the time that we have. We have had presentations that said, "We like the proposal as we see it, because this would eliminate some of the abuse from some municipalities." You have just said that this would perhaps eliminate some of the abuse from some of the utilities as well. So there's some give and take there from some of the presenters.
I wonder if you can give a little bit of a perspective, not from where you stand -- and I can understand where you're coming from -- but from a local municipality's point of view, where it is charged with the responsibility of providing a number of services on behalf of the local community. I understand what developers have been saying, and I'm sure we will hear -- we haven't finished yet -- that they are all interested in providing those necessary services for them to build homes or whatever.
I'm sure you have heard Mrs McCallion, your neighbouring mayor, say that if this goes through we're going to have a problem. If you were a municipality charged with the responsibility of providing a number of other things, would you think this act impedes the local municipality in providing those other services that are most necessary to the vitality and everyday activities of a new community?
Mr Kelly: I'm not trying to avoid the question, but --
Mr Sergio: You can if you want.
Mr Kelly: -- the area of my responsibility and the responsibility of the Municipal Electric Association is restricted to the provision of electrical energy. I have no municipal service experience outside of this sphere. To offer an opinion on the impact to a municipality of changes proposed in Bill 98 as far as other services are concerned is beyond my experience to fairly comment.
Mr Sergio: The heading of the bill says "to promote job creation and increased municipal accountability." Do you think this will create jobs in the industry?
Mr Kelly: Again from the electrical perspective, the answer is yes, because I think it is going to make our rates competitive. As I indicated to Mr Pouliot, we have been able to accomplish, along with other municipalities, a reasonable level of rate control.
I have no doubt, from listening to positions put forward by representatives from the industrial and commercial sector, that electrical rates are of importance. They are increasing in significance. The day of penny power is gone. What was negligible has now become a more important factor in decisions regarding expansion or relocation. When I started my career, electric energy was down here as a factor in comparison to labour market, transportation and so on. That's not the case today.
Mr Sergio: We've had some growth, I would say, since those days. I understand. Thank you for your presentation.
The Chair: Gentlemen, on behalf of the members of the committee, I thank you for taking the time to come this afternoon to make a presentation. We appreciate hearing your advice.
TORONTO REAL ESTATE BOARD
The Chair: Mr Vail, please. Good afternoon. Welcome. If you'd like to introduce yourself for the record, and your colleagues as well. We look forward to your presentation.
Mr John Vail: Madam Chair and members of the committee, my name is John Vail. I'm a member of the board of directors of the Toronto Real Estate Board, TREB, and municipal chair of its government relations committee. With me today, on my far right, is Pat D'Addio, he's a fellow Toronto Real Estate Board director and provincial chair of government relations. Fareed Khan, on my left, is the board's policy adviser for government and legislative affairs, and Von Palmer, on my right, is the board's policy analyst in the same area.
Thanks to the committee for allowing us the opportunity to appear before you today, especially given that it's 5:30 in the afternoon, to express TREB's views on Bill 98. Since our time is limited, the remarks are going to be brief.
We'd like to start out by saying that the Toronto Real Estate Board supports Bill 98's provisions to reform the way development charges are assessed for the funding of growth-related services and facilities. We also support the proposed restrictions on facilities and services that are permitted with these fees.
The Toronto Real Estate Board believes the Development Charges Act has been one of the key pieces of legislation which has been a significant barrier to housing affordability and economic development for several years. The principles contained in the proposed legislation are a good step to improving fairness in the system, providing greater accountability, reducing the costs of home construction and stimulating industrial expansion.
From TREB's viewpoint, Bill 98 would still allow municipalities the flexibility of providing a wide range of services and facilities needed to support new residential growth and industrial development in their respective communities. While municipalities have argued the legislation would force existing taxpayers to fund new growth services, we do know that during the past several years development charges have become excessive in some municipalities, to the point where new homes and new rental properties have become unaffordable and economic development has been hampered.
Consequently, an unfair onus has been placed on new home buyers, forcing them to fund public facilities as the price of home ownership. These charges have also contributed to the high cost of development in the GTA. In short, the system is broken and needs to be fixed.
When the current Development Charges Act was introduced in 1989, TREB criticized the legislation at the time because it allowed the use of development charges to finance soft services and also allowed for the introduction of lot levies. We're disappointed the government has chosen not to address education development charges, and instead renamed this section of the act the Education Development Charges Act.
TREB, along with other real estate industry groups, has long held that development charges for education are unfair, since they will lead to two education systems in the province, a first-class system for well-off municipalities with a high level of growth, and a second for those less well-off with a lower level of growth. Education provides a general benefit to society and the public, so the province as a whole should bear these costs.
Bill 98 would require municipalities to fund a portion of services and facilities necessitated by new growth. However, municipalities would not be able to levy charges for other projects, including municipal administrative offices, hospitals, parkland acquisition and cultural, entertainment and tourism facilities.
This makes some sense, because not only does the legislation restrict the levying of charges to services necessary for new growth, but also because the types of services and facilities to support new growth end up benefiting existing residents. We believe copayment and the exclusion of community-wide services would force politicians to exercise greater prudence when imposing these fees.
For the record, during consultations held prior to the introduction of Bill 98, TREB did call for reforms to:
(1) Improve fairness by redefining the scope of services eligible for development charges financing into basic, discretionary and excluded services, with some type of copayment between municipalities on the one hand and the development industry on the other for basic and discretionary services.
(2) Reduce costs by establishing reasonable and sustainable levels of service.
(3) Increase accountability by forcing municipalities to analyse the long-term cost implications of operating, maintaining and replacing the services funded from development charges.
(4) Require municipalities to explore alternate means of financing these growth-related services.
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TREB's understanding is that development charges are a way in which municipalities can require those who develop land to contribute to the capital costs necessary to service new development. This means joint responsibility and the fair sharing of costs between new growth and existing taxpayers.
We feel that insufficient attention has been given to the economic impact that rising development charges have had on the cost of new homes and on expanding businesses over the years. We can tell you that they have imposed a significant barrier to housing affordability.
In the GTA today, development charges represent over 10% of the cost of an average starter home, but when combined with all other government taxes, this cost climbs to almost 25%. These fees ultimately affect affordability of resale homes, since costs are passed on in the form of an increased sale price. The impact of charges on the business sector is the loss of jobs and investment to other jurisdictions with lower development costs.
As you are aware, the nature of the housing market has changed dramatically from that of the late 1980s, when the current Development Charges Act was enacted. The 1980s, of course, was a period of skyrocketing real estate prices and strong economic growth and job creation. Today jobs are somewhat insecure, employment is shifting to contract and part-time, and real estate values are now only beginning to edge up slightly, after a tremendous loss of equity over the past several years. Consumers today are more interested in paying down debt than accumulating it. The 1990s home buyer is very price-conscious and sensitive in a very competitive housing market.
We realize that development charges are needed to pay for new growth services. That's not in dispute. What TREB has a problem with is the way the charges have been calculated and the types of facilities and services they are used for. We therefore support the following, which are reflected in the legislation:
(1) The costs of new growth services must be contained by establishing reasonable and sustainable levels of services and by basing development charges on the actual benefits related to new growth. A system must be devised whereby taxpayers can assess the level of service they want and are prepared to pay for.
(2) Those services that end up benefiting the entire community must be paid for by all residents, and if this necessitates a copayment formula between the development industry and municipalities, then TREB supports it. This is a matter of fairness.
(3) Municipalities must be required to analyse the long-term cost implications of operating, maintaining and replacing all the services funded from development charges, because these services are an ongoing cost to existing and future taxpayers. This will provide greater accountability.
We've taken note of Bill 98's provisions to help address the high cost of development in the industrial-commercial sector. In particular, the exemption from development charges for expansions of up to 50% of the existing growth area of industrial facilities and allowing municipalities to defer or exempt industries from payment of development charges are welcome provisions which should stimulate this sector.
Even though we have no major problems with what is being proposed in Bill 98, for the record we'd like to point out that the legislation is a softer approach from what we had earlier advocated. A recent government-proposed amendment to Bill 98 which would no longer require municipalities to contribute 10% of the costs of hard services for new growth comes as a bit of a surprise, since we believe copayments would hold local politicians more accountable and force them to exercise greater prudence when imposing these fees.
TREB also called for:
Development charges and the general local tax base to equally share the costs of soft services such as arenas and recreation facilities, whereas Bill 98 calls for development charges to pay 70% of the costs and municipalities 30%;
Waste management services to be excluded from development charges and funded through other means; and
Transit, which benefits the broader public, to be funded equally by development charges and general tax revenues.
It was disappointing to learn that negotiations between the Urban Development Institute and GTA municipalities to help resolve the contentious issue of funding new growth services have somewhat broken down. In our assessment, it appears some GTA politicians do not believe that savings from a reduction in development charges would be passed on to new home buyers.
Mr Gerretsen: I wonder why.
Mr Pouliot: I wonder why. The track record is impeccable.
Mr Vail: Exactly. The development industry and municipalities in the outer GTA are at an impasse, and some reassurance from the province that savings will be passed on to new home buyers is needed. We recognize that the failure of talks between both parties runs deeper than guarantees of savings being passed along, and has more to do with funding issues than who pays for what.
While it appears a difficult task to offer such guarantees, especially when you factor in numerous other market forces that influence the price of new homes, the province should make efforts to bring both the development industry and local politicians together to explore ways that would reassure the public that any savings are passed on to new home buyers. This will go a long way to establishing some trust needed for any new arrangement to succeed.
As a start, it may be that the time has come to consider making development charges a more visible tax to the consumer. Potential home buyers should be able to easily identify what portion of the purchase price of the home accounts for development charges, which at the end of the day results in a better-informed consumer. Consequently, any attempts by government to increase these levies would be more visible to the consumer and any savings from reductions could be more readily identified.
To summarize, the Toronto Real Estate Board believes that by establishing reasonable and sustainable levels of services and basing development charges on the actual benefits related to new growth, the costs of new growth services can be contained.
As a matter of fairness, those services which end up benefiting the entire community must be paid for by all residents, and to provide greater accountability, municipalities must be required to analyse the long-term cost implications of operating, maintaining and replacing all services funded from development charges, because these services are an ongoing cost to existing and future taxpayers.
Thank you very much for the time today.
The Chair: We'll begin with the government caucus, Mr Maves. There's just over two minutes per caucus.
Mr Bart Maves (Niagara Falls): Thank you, gentlemen, for appearing today and for your presentation. Right on the first page of your report, you talked about the impact of development charges on rental properties. Since about 1975, when we brought in rent controls, the number of rental properties that have been built has just plummeted, and has stayed quite low, especially in the Toronto area, for years.
We're addressing that, but I wonder exactly what kind of impact development charges have on rental property and the construction of rental properties in the Toronto area.
Mr Fareed Khan: Development charges are only one of the many costs involved, whether it's homes for sale or rental properties, and yes, development charges do have an impact on the construction of rental housing. However, given that most of the rental housing that's happened over the last number of years has been funded through the government, through non-profit housing programs and so forth, it's difficult to assess the exact impact.
Should development charges be reduced along with a whole host of other costs -- because you're looking at things like, rental housing does not get a GST rebate the same as homes for sale get, there are other costs built in in terms of provincial taxes on building materials and so forth. You'd have to look at that all as a package and not just look at development charges.
When we've addressed this issue, we've never said that just by addressing any one single aspect of the cost related to constructing a home or rental building, that's going to solve the entire problem. That is one part of it, and all those need to be addressed. We're hoping the legislation will go forth to address this and then we'll see improvements in other areas as well.
Mr Vail: When you mention rental property, you should also consider the impact it has had on rental commercial-industrial buildings for small business, for example. It's had a huge impact on that type of construction for business as well.
Mr Maves: I know property taxes are about four and a half times on rental properties what they would normally be, and that could cause rents to be quite high in the Toronto area too.
Another one: On page 3 you used the phrase "rising development charges." I was going to ask the member from the taxpayers' federation this, because I know they like to watch governments to see where taxes are going, but over the years that development charges have been with us, have we seen a larger growth? I know all municipalities are different. Some have killed growth, some have reduced them dramatically, and others haven't.
In general, do you think we've seen faster growth and a larger growth in development charges as a revenue generator because it's a hidden tax, as opposed to, say, property tax which is more visible?
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Mr Von Palmer: Actually, I can't give you a precise percentage breakdown, but to answer your question, there has been quite an excessive growth in terms of development charges. There's a handout that we passed around that shows you what the charges are right now across the GTA. You'd note, for example, that up in Vaughan and Woodbridge the total development charges are about $20,000. Pat can probably tell you that when they started out in Woodbridge, those charges were very low and they've gone up quite a bit in the last several years, so that's an indication as to what's been going on in the GTA.
Within Metro, obviously, that's a non-issue, and you can tell that the charges are a lot lower within Metro. But once you go beyond Metro, you're seeing some substantial hikes and the numbers will attest to that.
Mr Khan: The other thing I might add to that is that when the development charges are levied, there are no specifics as to what the charges are going for. We've heard anecdotal evidence over the years where levies have been charged that would go for things like art galleries or municipal offices and other structures within a municipality that have nothing to do with providing services to a new development.
Mr Gerretsen: I can't think of an industry that is more influenced by supply and demand and competition than the real estate industry throughout the province of Ontario. That's why I find it so fascinating for you people to say that these development charges are having a major effect. Let me at the outset say that if you had no taxes and if the cost of material was next to nothing, obviously all the houses would be cheaper. There's no question about it. But it just so happens that those areas that seem to have the highest development charges are also, the way I understand it -- and I'm not from Metro -- the high growth areas in this province.
What gives here? If these development charges are so high in Vaughan, in Oakville, in Markham and Ajax etc, those are the areas that are growing. It seems to me that areas such as East York and Toronto and Etobicoke, where you don't have development charges, are not growing at all. How come, if they have such a great effect on the amount of housing that's being built?
Mr Palmer: This charge isn't meant to compare and contrast in terms of Metro and the GTA. We're not saying, "Oh, gee, within Metro the charges are so low and then you go to the rest of the GTA and they're pretty high." We're saying I'm sure there are good reasons why they're pretty high in Vaughan and Woodbridge, and these are high growth areas, but the problem that we, the Toronto Real Estate Board, have is (a) the way these charges are figured out and (b) the types of things that they cover.
Talk to developers, talk to the people who are out there and they'll tell you --
Mr Gerretsen: I agree with that, sir. That may very well be so. But you can't say that those kinds of costs necessarily, as you're saying in your brief, affect the resale value of homes. The resale value of homes surely, as we saw in the 1980s, has everything to do with demand and supply and almost nothing to do with the cost of construction or with these kinds of taxes.
Mr Palmer: We've never said that development charges are the only thing. What we've said in our submission is it's one of several.
Mr Gerretsen: You're saying here, "These fees ultimately affect the affordability of resale homes since these costs are passed on in the form of an increased sale price." I would suggest to you that whatever the resale home goes for later on is purely determined by supply and demand at that time, and it's got nothing to do with whatever development charges may have been when the house was built.
Mr Khan: Not necessarily, because when you have prices elevated because of development charges in the new home sector, it pushes up the base price or the overall price of the general housing market. So if you have higher prices on the new home side -- and we saw this in the 1980s, where you had prices going up on new homes and that in effect had an upward pressure on resale homes as well. Part of it was supply and demand, but part of it was also the fact that the entire price range had been pushed up, so you had less affordability.
Mr Pouliot: It's a renewed pleasure. Weren't you the same impressive panel that paid us the compliment of your visit under Bill 106, the big one, the assessment?
Interjection: Yes. We were there.
Mr Pouliot: I recognize you people. I must congratulate you. You're very consistent.
Interjection.
Mr Pouliot: There again, you're prolific.
I recognize you're consistent because there too you treated your situation vis-à-vis 106 as -- in fairness, your situation is unique, and you're to be commended. You're seeking a fair playing field. You're not opposed to some taxes.
I think you're right, and figures will attest that the development charges in some cases presented some with an opportunity to levy, because when you go from whenever it was imposed and then you follow, you really have to be hard-pressed not to say: "Oh, I see. So it was an opportunity to levy." It doesn't mean it's all bad or it's all good, because the money is taken on one hand and goes for general purposes. But if you're directly impacted, if you're in that game, you may suffer more or less, depending on your circumstances, and in these cases you must feel that you were targeted, because of the opportunity.
Housing prices -- sure, I would imagine every component counts a lot, and service charges will be passed along. People have to respect the amount of debentures, for instance, by way of being over-extended, all the way to junk bonds from -- well, not so much Olympia and York; they were big enough and they had that opportunity for travel, but Cadillac Fairview, Trizec, and there were others. It all comes out in the wash. This too was an important component of the price of housing, because they had to pay their creditors. Otherwise, the vultures would descend on them by way of the vulture funds.
Interest rates: Mr Greenspan. The next round is May 20, and then it's July. We don't know what will happen, but if corporate profits keep being very nice in the first and second quarter, it will put pressure on wages, because people will line up and say, "Me, too. I want a wage increase. I haven't had one for so long," and Greenspan may, in his wisdom, go to 25 basis points. If he doesn't in May, then there will be more pressure in July to go 50 basis points. I don't know, but that too has a very high impact on, "Am I going to buy a house or not?"
The demographics is another impact; the economy. Things are going well -- a $1.2-billion surplus to be announced in two weeks. A little padding, but that's okay, too. So things are going fairly well, and that means I may buy a house just as much, if not more, than development charges. Would I be right, Mr Vail?
I know you're not here to talk about that; you're here to talk about development charges. I respect that.
Mr Vail: Definitely, all those factors have a major impact on the consumer's decision to buy a home or to have any big-ticket item. Also on the business community as well. In the business community we have to put a lot of emphasis on the development charge aspect on industrial-commercial growth as well, and on jobs here in the GTA particularly.
Mr Pouliot: I've got to ask you one last question, and I thank you for your expertise. I live way up north and am of very moderate means, so when they talk quickly about the way things operate, I'm at a loss -- but that's okay; I can learn.
I want to ask you, Mr Vail, -- and you perspire honesty and sincerity: Why is it that when people say, "Will the savings be passed along to the consumers?" -- I believe so, but why is it that some people around are sceptical? I see some of them roll their eyes and they don't quite believe that you will pass it along to the consumer. You have a social conscience.
The Chair: Question, please.
Mr Pouliot: Why is it that there's some difficulty penetrating? I believe you, but so many others seem to be doubtful. Why is it? If you get a savings, surely it's going straight to the consumer, is it not?
Interjection: We would hope so.
Mr Vail: That's what we advocate, that this happen, absolutely.
Mr Pouliot: If you don't do that, you become less competitive, because somebody else will. Is that what you're saying?
Mr Vail: That is it.
Mr Pouliot: Well, well, well. Thank you. I'm convinced now.
Mr Vail: Fareed, did you want to add to that?
Mr Khan: I just wanted to add, that is one reason. There is cynicism out there among the public about whether these costs are going to be passed on, which is why one of the key points we did make in our presentation was to somehow make it more visible, factor it out of the price of the homes so that the people who are buying clearly know what charges they are going to be paying when they purchase that property. That way they can shop and compare between various municipalities.
Mr Pouliot: So Mr Campeau would pass the savings along if he were still with us?
Mr Vail: It is such a difficult issue for the home buyer and for the business community when it isn't visible. If people really knew it was $15,000 to $20,000 a house, they might think differently about this issue. It's a highly technical issue, as you know.
The Chair: Gentlemen, we thank you for coming before the committee this afternoon. If you've been to other committees, we also appreciate your advice to the government.
Colleagues, we have two issues to finish up before we adjourn. Your advice, please: Do you wish that the three groups who weren't able to be scheduled this afternoon send in written submissions?
Mr Gerretsen: Are they here?
The Chair: No, they aren't.
Mr Gerretsen: Not in the crowd?
The Chair: No.
Mr Hardeman: I would suggest we ask them to send in written submissions, then, Madam Chair.
The Chair: Agreed? Okay, thank you. We'll do that.
Secondly, clause-by-clause has been scheduled for Monday, April 28. Is there agreement as to when amendments will be filed with the clerk before distribution to committee members?
Mr Gerretsen: Can you do anything about the other thing, or not?
Mr Hardeman: I could address the other issue, Madam Chair. I think Mr Gerretsen requested or asked us to look into the possibility of changing from Monday to a different day. We have checked into changing it to Wednesday, which would be another day that this committee sits. They are to hear Bill 107, I believe. We have checked with the people in charge of that bill. They will not be able to have their amendments ready for clause-by-clause for Monday's hearing.
Mr Gerretsen: It was my understanding that those amendments were to be in by Friday noon as well.
Mr Hardeman: Yes, and I think the issue is to deal with those amendments by the ministry to review them for Monday. I've been informed they can't. Whether they're technical or not --
Mr Gerretsen: No, but the point is that the amendments for both bills were to be in by Friday at noon, or at least that's what the request is. So I don't see any reason why --
Mr Hardeman: I'm just relating what was said to me by the members or the Ministry of Environment. The only option was to change from Monday to Wednesday, and that's not available. If we change it to a different day, it would require the agreement of the Legislature, as opposed to the agreement of this committee. With that, I would just put forward that we should stay with Monday.
Mr Gerretsen: I think the record should note, then, that all amendments are to be in for both bills by Friday noon and that the government is unwilling to accommodate the request to have this done on a different day.
The Chair: The amendments for Bill 98 hadn't yet been agreed to for Friday noon. We didn't agree to that at the last meeting.
Mr Gerretsen: It's my understanding, from speaking to the 107 critic in my party, that the amendments had to be in for Friday noon on 107.
The Chair: For 107, yes.
Mr Gerretsen: Okay. If they're not being cooperative, that's fine.
The Chair: So we're aiming for Friday noon, then, for Bill 98?
Mr Gerretsen: I would like to discuss that with the other members of our caucus, and we'll let you know in due course.
The Chair: All right. Mr Pouliot? Mr Pouliot: I must apologize. By virtue of limited numbers, I don't, in this context, belong here. I'm just subbing for our critic. It's difficult for Madam Churley to take a decision for my colleague, but I'm sure she will be happy to comply with the wish of the majority. Is it next Wednesday you're talking about?
Mr Hardeman: No, Monday.
Mr Pouliot: Monday. Oh, yes.
The Chair: Monday for clause-by-clause for Bill 98, and amendments in by Friday noon.
Mr Pouliot: Totally reasonable.
Mr Gerretsen: We don't agree with that.
The Chair: Duly noted.
Mr Gerretsen: If you can't cooperate, we don't cooperate. It's as simple as that.
The Chair: Just so that you know, the fact summary will be distributed tomorrow to all colleagues.
The committee stands adjourned. We'll meet on Monday afternoon.
The committee adjourned at 1754.