Ontario’s Environmental Commissioner says the government should move immediately to improve municipal options for funding of transit.
On September 24, Gord Miller released Building Momentum: Provincial Policies for Municipal Energy and Carbon Reductions, the latest volume of his annual Energy Conservation Progress Report. One of the issues the report examined is the use of development charges to fund municipal transit expansion. Miller points out inequities in the way transit is treated, compared to roads and other services, which restricts transit funding.
Development charges are collected from developers to help pay for the services their new offices, homes and factories will require. In 2011, municipalities collected $1.3 billion in development charges, making them a significant source of funding. Development charges are recognized as a source of needed municipal revenues, but they are often overlooked as a planning tool to limit sprawl.
The Environmental Commissioner says the current development charge formula is biased against transit compared to how funding for other services is calculated. “Right now, municipalities are prevented from using development charges to cover 100 per cent of the capital costs for new transit service; they can only cover 90 per cent of the costs. But they can be used to pay for 100 per cent of the capital costs of other municipal services like roads. Transit is not treated fairly.”
Miller says that’s not the only restriction that hobbles transit funding. “Development charges can only pay for the average service level that’s existed for the past 10 years. This discriminates against growing municipalities that want to reduce traffic congestion and air emissions, but have historically had limited transit service.”
The Ontario government announced this summer it is going to consult with municipalities about changes to the Development Charges Act, 1997 to make sure the legislation is responsive to their needs.
The Environmental Commissioner is pleased the government realizes the current formula discriminates against new transit construction. “But these problems were identified seven years ago during a review of provincial-municipal services.”
The review acknowledged at the time that growth should pay for growth. “So the government should take action now,” says Miller, “and end the discrimination against funding for transit.”
The report examines how provincial policy can help municipalities reduce energy use and greenhouse gas emissions in communities. In his report, the Environmental Commissioner also recommends the government to reduce the emission of greenhouse gases by supporting district energy systems, and assist municipalities who want to use local improvement charges to pay for the energy retrofits to individual properties.