Deferring real estate developer fees could lead to higher taxes in Peel Region. Regional council doesn’t have assurances province will make up the difference.
Peel Regional Council asked taxpayers to “take a leap of faith” on October 23 by voting to extend the region’s development charges and grant program. Under this program, real estate developer does not have to immediately pay deferring fees to the City for each unit they build.
But according to Peel Region staff, this chain of events could result in taxes going up to cover this help being extended to developers.
When the program was initiated in June of this year, it came with an automatic expiry date of October 17, contingent on provincial funding.
As the provincial funding has not yet come through, Peel Council had to vote to extend the program to the end of January 2026, hence the “leap of faith” that Brampton Mayor Patrick Brown said would eventually see funding arrive.
The province too, did write to council on October 16 and ask that the program be extended so that the province could “continue…exploring options…for financial support.”
Without provincial or federal funding, Peel Region taxpayers will be on the hook for the as yet unknown cost of not receiving the development charges. Staff recommended that a reserve fund be established to pay for the program and that if higher order government funding was not received, then it should be funded by utility charges and/or property taxes.
Both Mayor Patrick Brown and Peel Regional Council Chair Nando Iannicco were adamant that “there’s going to be provincial funding available.”
Days after the council meeting, Ontario’s Minister of Municipal Affairs and Housing, Robert Flack, did announce that the province plans to take jurisdiction of water and wastewater away from Peel Region and give it to the municipalities of Mississauga, Brampton, and Caledon. It would also create a new $1.3 billion public corporation to manage these systems and allow the municipalities to borrow money in order to fund infrastructure.
While this new model would mean municipalities could spread expenses over a number of years and therefore lower development charges over the long term, it’s unclear whether some of this funding could also be used in the short-term to cover the current development charge shortfall.
If not, Peel Region will have to cross its fingers that either the federal government’s upcoming budget includes funding for this program or that the provincial government offers up more money. Otherwise, Peel taxpayers will be expected to reach into their pockets to make up the difference.
