How the Ontario Greenbelt can ensure smart growth

“Contrary to popular opinion, growth does not pay for growth in the GGH – especially when you take into account the long-term financial obligations for operating, maintaining, and refurbishing the infrastructure that growth entails,” said Ray Tomalty, consultant with Smart Cities Research.

“Given that compact, complete communities are usually more efficient not only from a land use but also a long-term financial point of view, one of the best ways to ensure financial sustainability is to better integrate financial considerations into growth management decisions being made today.”

“Significant investment is needed to provide the municipal infrastructure and services that will be required to meet the demands of housing affordability, as well as our growing Ontario population and economy”

The study was undertaken to analyse Ontario’s municipal finance system, its impact on decision-making with respect to the Greater Golden Horseshoe (GGH) growth plan, and to provide recommendations on how the process can be reformed to better align with the goals.

“Significant investment is needed to provide the municipal infrastructure and services that will be required to meet the demands of housing affordability, as well as our growing Ontario population and economy,” said Edward McDonnell, Greenbelt Foundation CEO. “Through this report, we are seeking to highlight where a stronger connection between municipal finance and growth goals can result in more sustainable cities and communities that can grow while also providing a high quality of life for residents.”

Municipality insight

Nine municipalities were examined as part of this research: Halton Hills, Halton Region, Caledon, Peel Region, Waterloo, Waterloo Region, Markham, York Region and Hamilton. An expert panel of academics, agricultural associations, the development industry, home builder associations, environmental organisations, and provincial and municipal staff in finance and land-use planning was engaged to examine tools and processes in four categories.

The report provides insights into how some municipalities are implementing the strategies in innovative, money-saving ways and shares recommendations for further efficiencies, including:

• Integrated growth planning: planning procedures, infrastructure planning and financial considerations need to be integrated into a long-term approach for growth management decisions. Peel Region adopted a new approach in 2014, and by the end of 2020, a better integration of plans had contributed to a $584m reduction in the infrastructure debt compared to a 2015 projection
• Development charges: these can help achieve smart growth objectives by better reflecting the true costs of development to encourage intensification and mixed-use development. Kitchener uses a two-zone system with different charges for suburban areas and an intensification zone in more established parts of the city. The charge differences are considerable, and the system is supported by the development industry as it is seen as more equitable than a municipality-wide approach
• Property taxes: there are opportunities to use the property tax system to enhance growth practices, such as applying the same tax rate on multi-residential and low-density properties, eliminating tax breaks for vacant properties and instead, providing discounts in areas designated for intensification. London has a unique Community Improvement Planning (CIP) programme that combines tax-increment and development charge grants
• User fees: user fees can generate more reliable revenue sources for municipalities to pay for infrastructure services and incentivise smart growth outcomes. In 2016, Mississauga implemented a stormwater charge based on the total roof area of properties. The charge covers the full cost of operating and maintaining the stormwater management system for the city, discourages inefficient land use, and rewards on-site controls to reduce stormwater run-off.