FAQ

“Development Charges” may be used to pay for all or part of the on or off-site capital cost of:

a)    new or expanded facilities for the supply and distribution of water

b)    new or expanded facilities for the collection, treatment and disposal of sewage

c)    new or expanded facilities for the provision of storm water management:

d)    new or expanded roads, sidewalks and trails required for or impacted by a subdivision or development

e)    new or expanded streets:

f)    new traffic signs and signals and new or expanded transit facilities

g)    land required for or in connection with facilities described in paragraphs (a) to (f) 

Recent changes (January, 2018) to planning legislation mean that the City can no longer recover costs through new subdivision agreements. The Development Charge By-law is now the main tool for recovering costs related to the development of new or expanding infrastructure. 

The City retained Watson & Associates, a leading consulting firm in Development Charges, to develop a recommended framework and By-law to be implemented by Council.

The City of Moncton requires new municipal services to grow the population and economy. These services include new or expanded facilities for water, sewage, storm water, and transportation (streets, transit, sidewalks and trails). A Development Charge By-law would provide a fair, consistent and transparent method for funding the construction of these facilities and infrastructure. 

A Development Charge By-law would also provide a framework with a systematic approach to sharing the costs created by the infrastructure and facility demands associated with new growth and development (i.e. establishing a fair and structured manner of distributing these costs between developers, builders, and ratepayers).

No. The development of the By-law is currently focused on the Area or Local Cost Sharing Development charges. The City is not considering the collection of city-wide development charges at this time.

If a Development Charge By-law is approved by Council, the document will provide the foundation for potential future application in other areas of the City. Consideration will likely be given to future growth and development areas of the City in which Development Charges may be needed to help deal with costly infrastructure challenges (e.g. new bridges, culverts, or trunk sewers) and spur increased development.

The City currently has three development charge areas:

1. Twin Oaks
2. Humphreys Brook East
3. Mountain Road and Worthington Avenue

The new Community Planning Act (January, 2018) outlines the on- and off-site capital costs to which Development Charges may be applied:

(a)  New or expanded facilities for the supply and distribution of water

(b)  A new or expanded facilities for the collection, treatment and disposal of sewage

(c)  New or expanded facilities for the provision of storm water management

(d)  New or expanded roads, sidewalks and trails required for or impacted by a subdivision or development

(e)  New or expanded streets

(f)  New traffic signs and signals and new or expanded transit facilities

(g)  Land required for or in connection with facilities described in paragraphs (a) to (f)

(h)  For any other purpose referred to in the regulations

The requirement to pay Development Charges may be placed on land developers at the time of subdivision, on builders/developers at the time of issuing building/development permits, or a combination of the two. 

As a part of approving any final by-law and framework, Council will have the final say on the time in which Development Charges are collected. Feedback from the public process will be taken into consideration in deciding on the equitable and fair application of Development Charges.

If in the future Council decides to apply the By-law elsewhere in the City (e.g. future growth and development areas), funds will be used to pay for growth-related infrastructure and facilities outlined in corresponding capital works budgets.

Provincial legislation requires that any Development Charges collected by the City must be placed into a special account, which can only be used to help fund the new or expanded infrastructure and facilities for which the money was collected.

As a part of the work conducted by Watson & Associates, the Development Charge Principles Framework includes an internal protocol or procedure for how reserve funds will be managed by the City. 

Since any Development Charge revenue received must only be used to pay for new or expanded infrastructure and facilities for which the revenue was collected, it is critical that adoption of the By-law must be supplemented with a systematic and transparent approach for managing funds. 

The protocol or procedure will also address how any associated interest from the reserve funds will be dealt with.

The application of additional charge areas may be considered for future growth areas of the City. The establishment of a Development Charge framework often requires an acceptable balance between two competing realities:

The first is that high non-residential Development Charges can, to some degree, represent a barrier to increased economic activity and sustained industrial/commercial growth, particularly for capital-intensive uses. Also, in many cases, residential Development Charges can ultimately be expected to be recovered via higher housing prices and can impact project feasibility in some cases (e.g. rental apartments).

On the other hand, growth cannot occur without new infrastructure. The City must find funding sources to build the infrastructure required for new homes and businesses. A Development Charge places the cost on the new houses and new businesses, rather than on all existing houses and business (i.e. the broad tax base). The idea being that existing homes and businesses have already paid the capital costs of the infrastructure they enjoy and now pay property taxes to maintain, renew, and replace it when necessary.

Approximately 20% of the City’s capital infrastructure budget is allocated for the construction of facilities and infrastructure associated with new growth and development. Development Charges would constitute a new revenue source for the City, which could help address the existing infrastructure deficit (maintenance and renewal of existing infrastructure).

Property taxes are mainly intended to pay for core municipal services, including protective services, infrastructure maintenance and renewal, recreation, sanitation, and transit. 

All of these services increase with new residents and businesses. Property taxes make up 86.5% of the total revenue of the City.