Some GTA homeowners could see major tax hikes under new provincial rules, municipalities warn

New cuts to the fees that local councils can levy against home builders could have a major impact on property taxes in parts of the GTA, a new survey by CBC News has found, with one municipality saying property taxes could more than double.

Late last year, the provincial government passed Bill 23, the More Homes Built Faster Act, which eliminates some fees that municipalities charge to developers in exchange for the right to build certain types of homes — money that municipalities say they rely on to provide things like roads and sewers, public transit, parks and libraries.

CBC News polled all 25 municipal governments in the Greater Toronto Area Dec. 15 and 16, asking how much money they'll lose by not collecting the development charges and how much they believe they'll have to hike property taxes in the years ahead to make ends meet.

The bulk of those municipalities say it's still unclear how they'll contend with the dramatic loss of revenue. 

"Obviously we're in a bit of a bind," Aurora Mayor Tom Mrakas said. "That's what I'm hearing from other municipalities too."

He said he's looking at a potential six per cent property tax hike in the year ahead, or cuts to services to help make up for a predicted revenue shortfall of $29 million over the next 10 years.

Of the GTA municipalities polled, seven either didn't respond, or sent auto-replies promising follow-up that hasn't yet arrived. Another 10 told CBC News they are still crunching the numbers and haven't yet arrived at a potential tax hike.

But the remaining eight — Aurora, Brampton, East Gwillimbury, Mississauga, Newmarket, Toronto, Vaughan and Whitchurch-Stoufville — all reported detailed estimates of the losses they face, and the tax hikes they're considering to make up the difference. 

Those tax hikes ranged more than 100 per cent in East Gwillimbury to as low of five to 15 per cent in Newmarket. 

Hover over each municipality for details

When it introduced the bill last month, the Conservative government said its aim was to help reach its target of seeing 1.5 million new homes built in the next 10 years. By eliminating the development fees municipalities can charge for affordable homes — those that are 80 per cent of the market average or less — the province believes it can spur developers to build more homes at a cheaper cost to buyers.

Municipal Affairs Minister Steven Clark has accused municipalities like Toronto of storing the development charges in reserve funds, rather than spending them on community improvements, and by jacking up development fees to exorbitant levels.

"In parts of the GTA, for instance, development charges rose by more than 600 per cent in the last 13 years," Clark wrote in a November op-ed in the Toronto Star.

"Toronto alone has proposed another 46 per cent increase over the next two years — even as the city sits on a development charge reserve fund of more than $2.3 billion. In fact, the province estimates that municipalities across Ontario have about $9 billion in unspent development charge reserves."