City of Ottawa settles with developers over 'excessive' $1.8M fees
Settlement sees developers pay about one-sixth of what city originally charged
It appears the City of Ottawa set its fees too high when it decided to charge $1.8 million to property owners wanting to apply for a one-off expansion of the urban boundary.
A hearing was set for June 2 at the Ontario Land Tribunal for an appeal by five home builders that want to convert rural land along March Road north of Kanata for urban development. CBC News has learned the city instead agreed to a settlement that sees the developers pay just one-sixth of the application fees the city had originally charged.
At least one other appeal over application fees was resolved at the same time. It had been filed by developers wanting to expand the Findlay Creek neighbourhood eastward.
Claridge Homes is involved in both cases. The company confirmed they were settled so the builders would pay $209,581 in fees to the city for a planning review, and another $106,000 to assess servicing lands with water and sewer pipes.
That's a fraction of the fees council approved last fall when it created the new type of application. It originally set fees that totalled $1.8 million, including a planning review fee at a hefty $1.4 million.
"The settlements resulted in mutually agreed upon fees that achieve cost recovery, which has always been the city's goal," wrote Derrick Moodie, the city's director of planning services, in an email.
One-off urban expansions
The City of Ottawa set up the new regime in October 2024 in order to adjust to a significant change made by the Ontario government.
In the past, property owners had to wait years for a chance to see the urban boundary expand. A municipality would do a detailed analysis of where to expand city roads, pipes and other infrastructure to allow for a growing population.
But after an updated policy took effect on Oct. 20, the province allowed property owners to apply at any time to expand a municipality's suburbs or rural villages.
The City of Ottawa's planning department came up with a process so it could have studies to inform piecemeal expansions developers might put forward in the years between regular citywide analyses.
It also came up with fees to recover the cost of determining if a given parcel was even needed for future populations, or how it would tie into plans for building infrastructure.
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Several developers in Ottawa did apply for urban expansions right away, but others paid the fees "under protest" and then filed appeals at the Ontario Land Tribunal.
That included the South March landowners: Claridge Homes, Minto Communities, Mattamy Homes, Regional Group and Uniform Urban Developments.
They argued fees totalling $1.8 million were "excessive" for the work required for even a single application. With several applications for urban expansions, they said there was overlap in the analysis and the city could work even more efficiently.
Fees remain unchanged
The city says it could only estimate last October what it would cost to process applications, and didn't know how many might come in.
"The recommended fee to council was based upon only one application, with the potential for efficiencies if there were multiple applications," Moodie wrote, now that the appeals have been settled.
But those same efficiencies might not happen in other scenarios, the director of planning services notes.
So despite the settlement, the City of Ottawa has no plans to lower its fees. They'll stay at $1.8 million and any change would need council's approval, he added.
City council received a legal update related to the Ontario Land Tribunal and city fees for urban settlement areas on May 14 — before the settlement — but those minutes are not reported publicly because the session was held behind closed doors.
Tribunal decision in early May
Disputes over application fees weren't the only appeals the City of Ottawa faced at the land tribunal related to its new regime for dealing with applications for urban expansion.
A few weeks before the fee dispute was settled, the city had faced a separate setback on May 8. In that case, an adjudicator decided applications for urban expansions made by Caivan Homes near Stittsville and by Mattamy Homes in Barrhaven were complete even though they hadn't submitted all the studies the city now required.
The executive director of the Greater Ottawa Home Builders' Association said he wasn't surprised developers challenged the city at the land tribunal on both fronts. Jason Burggraaf said they had questioned last fall about why the city needed so many studies and such a high fee.
"The industry overall really is trying to reduce all the costs that go into housing, and that includes city-imposed fees," said Burggraaf.
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