Development fees nipped by city council

After over five years of discussion, city council has finally put the idea of charging development fees to rest.

In April, a background study regarding possible development charges was presented to council by representatives from Watson and Associates Economists Ltd — whose services were retained in 2012.

The study highlighted how development charges could be used to offset the costs associated with new development, including set up of water and sewer to new industry, business or residential developments.

It showed many communities in Ontario use development charges, though Timmins and Thunder Bay were identified as two northern Ontario communities who do not.

Although the study’s recommendation in favour of charging development fees received a tepid response at best by council, the report was accepted and the study was to have moved into a public consultation phase.

Some councillors expressed concern with the potential implementation of development charges, noting the city was in a much different economic situation in 2011 when the previous council approved the study.

A public consultation was held in June, but new provincial legislation has since come into effect requiring additional criteria to be considered during public consultation, namely asset management and public transportation.

Tonight council was asked by city staff to authorize an additional $15,000 to complete the public consultation in a way that would comply with the new legislation.

If fully implemented, development fees could bring in an estimated $850,000 in annual revenue.

Mayor Christian Provenzano noted the motion before council was not whether or not to implement development fees,  but about council deciding if the city should move forward with the study.

 Ross Romano, councillor for Ward 6, suggested council vote against the motion for further study in an effort to ‘nip it in the bud.’

"We want to see business happen in our community and we want to remove the red tape and we want to make it easier for people to do business here. Right now, one of the few competitive advantages we have is not having development charges," said Romano.

Rory Ring, executive director of the Sault Ste. Marie Chamber of Commerce, said the implementation of development fees could result in a reluctance for new businesses to move to Sault Ste. Marie.

Ring noted the Sault was home to 2,700 businesses five years ago. The most recent numbers show that has dropped to 2,250.

“The small business community, who create 80-percent of the jobs, really don’t need to have further stresses put upon them,” said Ring.

Romano said the Sault has among the highest corporate tax rates, a suggestion Provenzano took exception to.

“We don’t have corporate taxes, we have 12 different property tax categories. Some of them are very competitive, some of them are uncompetitive. But I think we really need to be careful as a council to not represent that as a big deterrent for doing business,” said Provenzano.

He said access to natural resources, human resources and energy costs are additional factors for businesses looking to enter a new municipality.

“When you read the literature and look into it, your property taxes aren’t a significant deterrent. It’s one of the considerations,” said Provenzano.

To date, the city has spent approximately $45,400 on the project.

Tonight’s recommendation by city staff to continue the development fee study was defeated unanimously.