Kitchener could miss out on $60M over next two years due to provincial changes
Posted Sep 8, 2025 08:55:55 AM.
Last Updated Sep 8, 2025 10:11:53 AM.
The City of Kitchener could face an up-to $60 million shortfall over the next two years due to some recent changes to the way development charges are collected.
In June, the provincial government passed changes to Bill 17, the Protect Ontario by Building Faster and Smarter Act, that would delay the collection of development charges in residential builds until people are ready to move in.
“All of these policy decisions, while they may make sense right now because we want to stimulate the construction industry and get more housing built quicker, they do have financial implications,” said Kitchener Mayor Berry Vrbanovic. “Therefore, those financial implications need to be considered by all orders of government as they make their policy decisions.”
In the past, municipalities would collect development charges from developers upon the distribution of building permits, allowing the financial strain of initial development to be taken off the shoulders of taxpayers.
“Ultimately, municipalities need to be kept whole if we’re going to be making the necessary investments in roads, sewer, water, and recreational facilities in a timely manor,” said Vrbanovic.
Now, development charges will be collected when residents are ready to move in, delaying payment to the city by months or years according to Kitchener staff.
The changes to Bill 17 also removed the city’s ability to charge interest on the deferred payments of development charges, which could reportedly lead to a loss of approximately $650,000 per year at the City of Kitchener.
The provincial changes also provide an exemption for developers building long-term care homes, causing the city to lose out on previously deferred development charge payments, a reversal of more than $160,000 of development charges.
Before these changes, the City of Kitchener had planned to bring the development charge reserve fund into the positive by 2035. These changes makes those plans impossible according to city staff.
The changes are set to be discussed at a Planning and Strategic Initiatives Committee meeting on Monday.
