MEDIA RELEASE - Chamber Maintains that Development Charges Will Hurt Local Economy, Business and Consumers
Chamber Maintains that Development Charges Will Hurt Local Economy, Business and Consumers
Business Group Looks Ahead to Public Consultation Process
For Immediate Release
April 27, 2016
Sault Ste. Marie, ON – Since reviewing materials provided by the City in respect to the proposed implementation of development charges and undertaking its own investigation into the potential impact that their implementation might have locally, the Sault Ste. Marie Chamber of Commerce (SSMCOC) remains adamant that the introduction of development charges will ultimately prove to be detrimental to the local economy, to our ability to attract and grow business and ultimately to consumers.
According to SSMCOC President, Monica Dale, “Development charges have become common for many municipalities in Ontario as a means of offsetting increasing infrastructure costs. Development charges, in general, are fees that are collected from developers before construction begins.” She explains however that “development charges are primarily only beneficial in communities that are experiencing what’s known as ‘rapid growth’. Sault Ste. Marie is not a rapid growth community when you take into account important factors like population growth, real estate prices, building permit numbers, job statistics and GDP.”
Dale adds that “the SSMCOC has been examining and monitoring this issue for close to a year, as it not only affects our local construction firms and those that invest in construction, it impacts the ability of commercial and industrial enterprise to cost effectively expand their footprint within the city.”
In 2015, the Chamber struck a Development Charge Working Group consisting of Chamber Executive members Monica Dale of Dawson & Keenan Insurance and Jason Naccaratto of Northern Advancement Capital Inc. as well as Adam Pinder of the Sault Ste. Marie Construction Association, Sam Biasucci of Sal-Dan Developments, Joe Ruscio of Joe Ruscio Professional Development Corporation, James Caicco representing the Sault Ste. Marie Real Estate Board, Franco Pastore of EPOH, Dave Ruscio of Ruscio Construction and Ward 6 City Councilor Ross Romano. The working group examined the preliminary consultant reports to the City on development charge implementation and undertook a comparison of current development charge by-laws in place around the province. They also actively engaged various local economic development agencies to gauge the potential impact of development charges on the local economy.
The Chamber has previously noted that the implementation of development charges could result in costs being passed along to consumers of more than $6,000 for a new home and more than $3 per square foot for commercial or industrial property for businesses that expand.
SSMCOC Executive Director, Rory Ring notes that “this increased cost will almost certainly be a concern to any business that is looking to physically expand, or to any new business looking to start-up in the Sault, where a shovel has to go in the ground. Our concern is that this is going to have a chilling effect on business growth, and in some cases might even force a start-up to look at any one of a number of other northern centers that do not impose development charges.”
He adds “we are also concerned about the potential impact that increased costs are going to have on the consumer and other small businesses, locally. If you add several thousand dollars to the cost of a new house or business, that is several thousand dollars that is not available to the consumer to spend furnishing that house or business or investing in other things. Development charges won’t just impact businesses in the construction industry, but every other tertiary business that relies on the consumer and commercial spending.”
The Chamber maintains that local circumstances have also impacted our City’s ability to be considered a growth economy; these must also be considered in conjunction with the cumulative effects of new Provincial and Federal policies.
“Currently, the business community is being faced with potential cost increases associated with the Ontario Retirement Pension Plan, Cap and Trade, the cost of electricity, potential minimum wage increases, the skills gap and on a federal level, the halting of the small business tax reductions. There are many issues forthcoming that will directly impact our community and these must be given consideration. We will be turning our attention to ensuring that we bring these forward in the public consultation process,” says Ring.
The approval to move forward with a public consultation process was passed in a vote at Monday’s City Council meeting. The process will allow the public and stakeholders to learn more about the recommendations included in a consultant’s report on development charges.
The Chamber is planning to strongly encourage its members to participate in the consultation process and bring their concerns to our elected municipal representatives.