Saugeen Shores Mayor Luke Charbonneau says developers will have to prove that lower development charges lead to more and less expensive housing, after listeners raised concerns that the town's proposed reduction could benefit developers at taxpayers' expense.
The concerns were submitted to CKNXNewsToday.ca following a story outlining Saugeen Shores' willingness to reduce residential development charges by 50 per cent if the town secures funding through a federal-provincial infrastructure program.
Listeners argued that by reducing development charges in exchange for government infrastructure funding, "provincial taxpayers (all of us) pay for infrastructure so that high-income developers can pay less and profit more."
Charbonneau said development charges normally exist specifically to prevent existing municipal taxpayers from carrying the cost of growth.
"The purpose of them is to make sure growth pays for growth, to have all the water and sewer and road infrastructure that we need to build to support growth funded by the developers who are building all of that new development," he said.
In this case, however, Charbonneau said the federal and provincial governments have deliberately offered to fund reductions in an effort to spur housing construction.
Saugeen Shores estimates cutting the charges would reduce its expected development-charge revenue by a little more than $8 million over three years.
Charbonneau said the town could not absorb that loss on its own.
"That's something we couldn't normally do," he said. "It would mean we couldn't build the infrastructure that we need."
He said the town will only proceed if the funding it receives makes up for the reduction.
"If they fund everything we applied for, we will be not negatively impacted," Charbonneau said. "We'll receive enough funding from the governments to make up for the shortfall in the DCs."
Listeners also questioned whether there are safeguards ensuring the savings result in less expensive housing, but Charbonneau acknowledged the town cannot force developers to pass the development-charge savings directly to homebuyers.
"The town can't force them to do that," he said. "The town doesn't have any way of forcing developers to set the prices for their homes at any particular level."
Instead, Charbonneau said the program is based on a long-standing argument from the development industry that development charges make projects more difficult to finance and ultimately increase housing costs.
He said governments are now effectively giving developers an opportunity to demonstrate that argument is correct.
"If we receive the money and are able to reduce the DCs, and if many other municipalities across Ontario are able to do the same thing, it's back on the development community to prove to us that what they've been saying all along is the case," Charbonneau said.
"They've been saying it, so now they've got to deliver it."
Charbonneau rejected the suggestion that Saugeen Shores would accept an agreement that leaves existing municipal taxpayers responsible for the missing revenue.
"We're not going to sign an agreement that disadvantages our community," he said. "That is going to make a whole bunch of costs that ought to be borne by new development land on the shoulders of existing property taxpayers. That wouldn't be fair."
He said the town has not yet received the final funding proposal or agreement and will have to examine its terms before proceeding.
"We'll see what we get for a proposal, we'll see what we get for funding, and if it all works out, we'll participate and we'll hope that the provincial and federal governments are right and that the developers will respond," Charbonneau said.
One listener's email referred at one point to having "no development charges" in Saugeen Shores, but the proposal would not eliminate the charges. Council has instead authorized a 50 per cent reduction from the rates in place on March 30, 2026 if the funding application succeeds.
For a single-detached home, that would reduce the town charge from approximately $36,731 to $18,366. The town's newly adopted 2026 development charge for a fully serviced single or semi-detached dwelling is currently $45,021.
Charbonneau said there is some local evidence that reducing development charges can affect what gets built.
Saugeen Shores has previously offered targeted reductions aimed largely at higher-density housing.
"We've doubled the amount of purpose-built rentals in our community in the last three or four years," Charbonneau said. "That was largely achieved through targeted development charge reductions."
He acknowledged the new proposal is considerably broader, applying to virtually all residential development.
Charbonneau said the ultimate test will be whether developers respond with additional housing construction.
"They are the ones who have looked for programs like this," he said. "They are the ones who need to deliver, and we'll see if they do."
