Proposed provincial changes to the development process will likely have “significant impacts” on Toronto’s finances and “undermines” the city’s ability to build livable communities, a new city staff report says.

The provincial government introduced new legislation on May 2 that will alter how development gets built, is disputed and pays for growth in surrounding neighbourhoods, drawing immediate concerns from elected city officials and staff alike as well as residents.

Bill 108, named the More Homes, More Choice Act, promises to cut red tape, simplify processes used by cities to negotiate development and speed up the creation of all types of housing.

But city manager Chris Murray and chief planner Gregg Lintern, who signed off on the report to council in light of the new legislation, say the province hasn’t made that case.

“Bill 108 contains limited evidence that its central objectives, making it easier to bring housing to market and accelerating local planning decisions, will be achieved,” the report says.

The act “moves away from the province’s stated ‘growth pays for growth’ objective and sets the conditions for two tiers of neighbourhoods in Ontario municipalities: those completed before Bill 108, where residents benefit from local community infrastructure versus neighbourhoods developed in a post-Bill 108 environment where neighbourhoods may have limited facilities and parks to support daily life.”

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Council is scheduled to debate the report Wednesday, after senior city staff, planners and lawyers were left scrambling to understand the proposed legislation and its impact on the city with little information from the province.

Now, staff are recommending council ask for an extension of the period municipalities and others have to make official comment, currently set to close June 1. Staff also say the city should be consulted before the province issues any regulations that would spell out how parts of the new bill would be executed so that “the city can fully understand and be able to analyze the impact of the proposed bill changes comprehensively, including the cumulative financial impacts to municipalities.”

And without knowing what the changes will cost the city, staff are recommending that the province set out that revenue neutrality be a goal of the new legislation or that they create a fund to compensate cities who see revenues decline as a result of the bill.

“Based on the city’s preliminary review of proposed Bill 108, it is unclear as to the full extent of the financial impacts of the proposed amendments to the city, in part, because much of the detail will be in a yet-to-released provincial regulation,” the report says.

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The staff report highlights that the proposed changes could compromise the city’s approved 10-year capital plan to add new child-care spaces, libraries, parks and other services to growing communities to both address existing pressure from new development and support future growth.

The proposed legislation plans to blend tools the city has now to collect benefits, cash-in-lieu of benefits or strictly cash at a set rate from developers for local community and citywide projects — paying for or providing directly both hard infrastructure like pipes and wires and community infrastructure like parks, child care centres and more.

It also proposes an unspecified cap on what the city can collect — which could reduce the amount of benefits the city can secure compared to what is possible today.

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The 10-year plan, which has been approved by council and which staff say is put at risk by the provincial changes, includes 12 child-care centres, 21 library expansion and renovation projects, 106 new or expanded parks, five pools, four arenas and more than 200 playground improvement projects.

Changing how the city can extract benefits from developers, the report says, “undermines the city’s ability to ensure that ‘growth pays for growth.’ ”

Plans to change the dispute process and return the rules of the controversial Ontario Municipal Board “could result in increased appeals and an even greater proportion of the housing pipeline projects being held up,” the report says.

In 2017, the Liberal government announced the provincial tribunal that handled most land use disputes, the OMB, would be replaced with the Local Planning Appeal Tribunal. The new tribunal, the province promised then, would show more respect to local planning decisions made by municipalities and elected officials and act as a true appeals body compared to a process city officials saw as unfair and unaccountable.

But the transition between the OMB and LPAT has caused a logjam of cases. Adding a third stream of cases and shortening the timelines cities have to respond to applications may exacerbate the issue, staff say.

“The chief planner’s report makes it very clear that Doug Ford’s return of the OMB does little to make our city more affordable but does a lot to make it less livable,” said Councillor Josh Matlow, who fought to see the OMB abolished.

“Bill 108 has essentially handed the planning process over to the development industry’s interests and will see Toronto residents pay more for the services and infrastructure needed to accommodate growth.”

Municipal Affairs Minister and Housing Steve Clark, speaking on Tuesday morning at the Toronto Region Board of Trade, said the new tribunal system is bogged down by “a backlog of legacy cases” from the old board.

Clark said a two- to three-year appeals process is “unacceptable” when Ontario is in the midst of a housing crisis “after years of neglect by the former government” and pledged to add 11 adjudicators to speed up hearings.

A new community benefits system, he said, was meant to create predictability, he told reporters after his speech.

“We are going to consult with municipalities about the cap and the regime of the community benefits program,” he said.

When asked by the Star about specifics of the legislation not yet known, Clark provided no further insight promising the conversation with municipalities remained open.