On May 16 Guelph City Council may light the fuse on a ticking fee-and-tax time bomb. This time bomb is embedded within the Clair-Maltby Secondary Plan, now coming up for final approval.
Forget libraries, rec centres and police station renovations. The biggest infrastructure costs we pay as citizens are the subsidies we give to our runaway growth. The trouble is that the sticker price is never as transparent as it is for something like the library, so it’s never subject to the same level of debate. Most citizens and even some councillors have difficulty grasping that growth doesn’t pay for itself. We collectively pick up the tab for the shortfall.
Ever since Mike Harris put through the Development Charges Act in 1997, growth in this province has been a Ponzi scheme. The promise of development charges and property tax revenues lures municipal politicians into approving low-density growth without understanding the full impact on taxes. It’s like that phishing text or email that you’ve won the lottery – the only catch is that you have to send money to release the funds.
For more than 25 years, tax dollars and water, wastewater and stormwater fees have been diverted to make up the shortfall not covered by the development charges (DCs) contributed by developers. It’s one reason Ontario municipalities, including Guelph, have racked up millions in infrastructure deficits. We’ve been spending money on growth that we should have been spending on fixing and maintaining what we already have.
What kind of money are we talking? When our development charges were updated in 2018, the city treasurer, Tara Baker, pegged the public cost of growth at $122 million over a 10-year period – $50 million from taxes and $72 million from our water-related fees. Your water bill doesn’t just cover the water coming out of your taps, you’re also paying to lay pipes in new subdivisions.
And why are we even considering the insanity of sprawling onto a glacial moraine in the first place when there are still so many large undeveloped areas close to existing services? (The Lafarge lands, the Innovation District and the Dolime Quarry are just a few examples). It’s like building an extension on your house when you have two empty bedrooms! The main driving force behind this sprawl is the developers who are impatient to cash in on the speculative investments they made years ago.
Watson & Associates Economists prepared a “Fiscal Impact Assessment” for Clair-Maltby.
While the numbers are complex, the message is clear: “Based on the analysis presented in this report, the City is expected to face financial pressures as a result of growth in Clair-Maltby”.
Guelph is going to have to take on massive debt to service this development and it will inevitably drive up our taxes and fees. If you think life in Guelph is unaffordable now, fasten your seatbelt! What’s missing from the analysis is a bottom-line, all-in figure of how much public money is involved – not just unfunded debt. How much public money is already tucked within the ”Development Charge Revenue” envelope What is the total public price tag?
And whatever that number is, we need to add 50%. Look at what happened with the South End Rec Centre. The lowest bids came in 50% above the budgeted amount. We can assume exactly the same inflationary pressures are acting on development infrastructure.
Reach out to your Councillors and the Mayor and tell them they need the all-in public sticker price for Clair-Maltby before giving any green light. No blank cheques.
Perhaps the last financial option set out for Guelph City Council by Watson & Associates is the best one: “Delay capital expenditures and/or growth in certain areas.” Clair Maltby would be the perfect place to start.
In my view, on May 16th, the most fiscally responsible decision will be to say “No. No, we can’t afford it.”
