The province plans to closely examine the Town of Newmarket’s finances as it explores claims that its housing legislation will significantly harm municipalities.
Newmarket was one of six municipalities named May 4 to receive audits by the province. These audits come in the wake of municipal pushback on the housing legislation Bill 23. Some municipalities, including Newmarket, have said the legislation that cuts development charges will significantly hurt municipal finances and render it difficult to service new housing developments.
Mayor John Taylor said the announcement of the audit came as somewhat of a surprise, but he sees it as a way to make progress toward the province financially helping municipalities with the impacts of Bill 23.
“The word audit tends to put you on the defensive, but I don’t really want to take it that way,” he said. “We’ve been asking and calling for a funding formula or clarity around the province (saying it) will ‘keep us whole.’ They feel this is a necessary part of that process and figuring that out and so I fully support it.”
The province said the audits can create a shared understanding of the impacts of Bill 23. The province has previously pushed back on municipalities' comments that the bill will have a significant negative impact on their bottom lines but also said municipalities would be financially "kept whole" and able to service the housing development to come. The province seeks to build 1.5 million homes over the next 10 years.
“We are working with our municipal partners to get a factual understanding of their finances to ensure development charges, and the ability to invest in local services and projects, are supporting rather than hindering housing supply growth,” Minister of Municipal Affairs and Housing Steve Clark said in a news release.
The other municipalities named for audits include Toronto, Mississauga and Brampton, three of the largest in the province. Peel Region and Caledon were also named. The province said the municipalities were selected to represent a range of governing structures, as well as both urban and rural communities "poised for growth."
“It is what it is," Taylor said. "They indicate clearly they want this to be a partnership-based exercise, and I’m going to go into this with the view this is going to be a partnership-based exercise.”
Newmarket is the only municipality in the GTA that refused the provincial housing targets for it, leading to Premier Doug Ford publicly calling out the mayor. Taylor and the town said that the current sewage servicing capacity makes the target of 12,000 homes in the next 10 years impossible, with the mayor and premier meeting to discuss it in more detail.
The province will install third parties to conduct the audits, using a bidding process. It said the audits will be completed later this year.
“In addition to demonstrating how these municipalities have managed their funds, delivered services, and made decisions with regard to local infrastructure projects, the findings of these audits would be used to help develop future provincial policies and programs supporting long-term municipal financial sustainability and housing-related infrastructure investments,” the province said.
Taylor said the municipality is working to figure out what is to come. But he said there is no question, objectively based on data, Bill 23 will have significant negative impacts on municipal finances.
“New housing doesn’t just come with new revenue and new (development charges), it comes with new costs,” Taylor said. “I’m sure a credible accounting firm doing a full audit will understand those concepts and find a fair and balanced perspective and model in which to fund municipalities for the shortfall.”
