HomeMy WebLinkAboutJune 17, 2026 - Special Council
Special Council
Meeting Agenda
Electronic Meeting
June 17, 2026
11:00 AM
Chair: Mayor Ashe
Please be advised that in accordance with Section 10.04 of the Procedure By-law, the City of
Pickering is holding Council and Committee Meetings in an electronic format until further
notice.
Members of the public may observe the open, public portion of the meeting proceedings
by viewing the livestream on the HTML Agenda or the archived video available on the
City's website.
For inquiries related to accessibility, please contact Legislative Services
Phone: 905.420.4611 | Email: clerks@pickering.ca
Call to Order/Roll Call
Disclosure of Interest
Delegations
Matters for Consideration
Director, Finance & Treasurer, Report FIN 09-26 Page 3
Canada-Ontario Partnership to Build - Development Charge Reduction
Program
Recommendation:
That Report FIN 09-26 regarding the Canada-Ontario Partnership to Build -
Development Charge Reduction Program be received;
1.
That Council direct staff to prepare and submit an application to the
Development Charge Reduction Program in the estimated amount of $29.4
million, with the Federal and Provincial governments providing up to 90% of the
2.
1.
2.
3.
4.
4.1
eligible project costs, and the City of Pickering being responsible for funding the
other 10% of the program costs;
That Council directs staff to prepare and submit an application to the
Development Charge Reduction Program that would include the following capital
projects: Seaton Fire Station #3, William Jackson Road & Culvert and Audley
Road & Culvert;
3.
That the Director, Finance & Treasurer be authorized to adjust the Development
Charge Reduction Program dollar submission target amount and corresponding
application based on new or revised program information;
4.
That Council endorse a residential Development Charge reduction of 30% for a
period of three years, conditional upon successful funding approval under the
Development Charge Reduction Program and execution of a Transfer Payment
Agreement;
5.
That Council acknowledge that, as part of the Development Charge Reduction
Program current residential Development Charge fees will be frozen at the
March 30, 2026 rate, for a period of three years and that the indexing of the
residential Development Charge will not be permitted during the rate freeze;
6.
That Council direct the Chief Administrative Officer and the Director, Finance &
Treasurer to negotiate any changes to the Development Charge Reduction
Program or to the draft Transfer Payment Agreement, and that the final Transfer
Payment Agreement be approved by Council; and,
7.
That the appropriate officials of the City of Pickering be authorized to take the
actions necessary to implement the recommendations in this report.
8.
Confirmatory By-law
Adjournment
5.
6.
Special Council Meeting Agenda
June 17, 2026
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Report to
Council
Report Number: FIN 09-26
Date: June 17, 2026
From: Stan Karwowski
Director, Finance & Treasurer
Subject:
Canada-Ontario Partnership to Build - Development Charge Reduction Program
File: 4920
Recommendation:
1. That Report FIN 09-26 regarding the Canada-Ontario Partnership to Build - Development
Charge Reduction Program be received;
2. That Council direct staff to prepare and submit an application to the Development Charge
Reduction Program in the estimated amount of $29.4 million, with the Federal and
Provincial governments providing up to 90% of the eligible project costs, and the City of
Pickering being responsible for funding the other 10% of the program costs;
3. That Council directs staff to prepare and submit an application to the Development Charge
Reduction Program that would include the following capital projects: Seaton Fire Station #3,
William Jackson Road & Culvert and Audley Road & Culvert;
4. That the Director, Finance & Treasurer be authorized to adjust the Development Charge
Reduction Program dollar submission target amount and corresponding application based
on new or revised program information;
5. That Council endorse a residential Development Charge reduction of 30% for a period of
three years, conditional upon successful funding approval under the Development Charge
Reduction Program and execution of a Transfer Payment Agreement;
6. That Council acknowledge that, as part of the Development Charge Reduction Program
current residential Development Charge fees will be frozen at the March 30, 2026 rate, for
a period of three years and that the indexing of the residential Development Charge will not
be permitted during the rate freeze;
7. That Council direct the Chief Administrative Officer and the Director, Finance & Treasurer
to negotiate any changes to the Development Charge Reduction Program or to the draft
Transfer Payment Agreement, and that the final Transfer Payment Agreement be approved
by Council; and,
8. That the appropriate officials of the City of Pickering be authorized to take the actions
necessary to implement the recommendations in this report.
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FIN 09-26 June 17, 2026
Page 2
1.0 Executive Summary:
The purpose of this report is to update Council on the recently announced Development
Charge Reduction Program (DCRP) and to seek Council approval to submit an application to
the program.
On March 30, 2026, the governments of Ontario and Canada agreed to a cost-matched
structure to provide a combined $8.8 Billion over 10 years for infrastructure investments in
Ontario, with Canada’s share of the funding flowing through the Build Communities Strong
Fund’s Provincial and Territorial stream. The Build Communities Strong Fund was launched by
the federal government earlier this year to accelerate infrastructure projects across the country
and to reduce new housing construction costs.
On June 1, 2026, the Ontario and Canada DCRP, was opened with applications due by June
19, 2026, at 10:00 am. To qualify for grant funding, municipalities must reduce Development
Charge (DC) fees for all residential types by a minimum of 30%.
Applications will be assessed based on:
• percentage of committed DC rate reduction (minimum 30%);
• number of homes projected to be built as a result of the proposed DC relief; and,
• the municipality’s financial contribution.
Under the terms of the program, eligible asset type projects include local drinking water,
stormwater, wastewater, transportation, emergency services and community infrastructure.
Housing-enabling infrastructure projects would be prioritized, while community projects that
support the development of communities would also be considered. Projects are required to
start construction no later than July 31, 2030, and be completed by October 31, 2035.
In response to this program, staff recommend that the current DC fees, as of March 30, 2026
remain unchanged for three years, subject to the City securing sufficient DCRP grant funding.
In addition, staff recommend an application to the DCRP be submitted for the following
projects: Seaton Fire Station #3, William Jackson Road & Culvert and Audley Road & Culvert.
It should be noted that the DCRP is a competitive process and funding approval is not
guaranteed. Successful municipalities will be required to submit an annual DCRP report using
a template to be provided by the Province. The year-end report will outline actual activities
undertaken and costs incurred.
The DCRP consists of two major components: housing unit projections (linked to a DC rate
reduction) and submission of eligible capital projects. A high-level explanation of the process is
presented below.
Step One: Forecast and calculate the increase in housing unit projections based on the DC
reduction rate.
Step Two: Calculate a DC revenue loss based on lower DC fees.
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FIN 09-26 June 17, 2026
Page 3
Step Three: Determine eligible capital projects to be funded up to 90% by the senior
government levels with the dollar value guideline as established in Step Two.
2.0 Relationship to the Pickering Strategic Plan:
The recommendations in this report respond to the Pickering Strategic Plan Priorities of
Champion Economic Leadership & Innovation; Advance Innovation & Responsible Planning to
Support a Connected, Well-Serviced Community; Strengthen Existing & Build New
Partnerships; and Foster an Engaged & Informed Community.
3.0 Financial Implications:
Successful DCRP projects will be cost shared between municipal applicants, the province and
the federal government. Table One below, provides a summary of the funding partnership.
Table One
Funding Partnership Summary
At first glance, it may appear that the City is not contributing its fair share. However, it should
be recognized that the two senior levels of government have the ability to fund their
contributions from various revenue sources of which personal income tax is the largest. In
addition, the two senior levels of government are allowed to run a deficit and municipalities are
not.
Table Two
Estimated Project & Funding Summary
Funding Source Project Budget *
($) Budget (%)
Development Charge
Reduction Program
(DCRP)
Fire Station #3
(Seaton) $13,649,402 90%
Development Charge
Reduction Program
(DCRP)
William Jackson Road
Reconstruction and
Culvert Replacement
$12,899,933 90%
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FIN 09-26 June 17, 2026
Page 4
Audley Road
Reconstruction and
Culvert Replacement
Total DCRP Grant
Funding $26,549,335 90%
Additional
Assessment Growth
Fire Station #3
(Seaton)
$1,516,600 10%
Additional
Assessment Growth
William Jackson Road
Reconstruction and
Culvert Replacement
Audley Road
Reconstruction and
Culvert Replacement
$1,433,326 10%
Total Municipal
Funding $2,949,926 10%
Total Project Budget
$29,499,261 100%
*Costs in DC Study indexed to 2030 dollars
As shown in the table above, the City’s commitment to the two projects is $2.9 million. The
additional cost will be funded from additional assessment growth, which is estimated to be
$3,930,000.
Current year building permit activity levels indicate a possible deficit in the Building Services
Cost centre at year’s end, which could potentially be reduced if the projected uptake in housing
units occurs.
The other factors to consider are, that the reduction in DC’s should increase housing sales that
in-turn would result in an increase in housing construction activity creating more direct and
indirect jobs. An average residential home usually consists of a high content of Canadian
construction materials such as lumber, bricks and concrete. In addition, the labour component
is usually based on the local area population.
3.1 Impact on Development Charge Revenue Fees
To qualify for DCRP , a municipality must agree to reduce their current DC rates by at least
30%. DCRP guidelines suggest a reduction in DC rates between 30 to 50%, and it is
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FIN 09-26 June 17, 2026
Page 5
suggested that higher discounts would be considered to be advantageous and beneficial when
the Province evaluates Pickering’s request.
Chart One provides a high-level comparison of the DC (fee) rates in the GTA area.
Chart One
As shown above, Pickering is slightly below the middle mark. From a historical basis,
Pickering’s DC rates were in the lowest quartile for comparison purposes for at least twenty
plus years. Chart Two below compares Pickering’s current lower tier DC fees with those
municipalities that border the City of Toronto.
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FIN 09-26 June 17, 2026
Page 6
Chart Two
As shown above, Pickering has the lowest current DC fees among the municipalities bordering
Toronto. The other municipalities would have to reduce their DC fees just to obtain the current
Pickering DC rate. Therefore, it is recommended that the 30% DC reduction (lowest permitted
reduction in order to qualify for the DCRP) is justified for the City of Pickering.
Table Three below, outlines the City’s current residential DC rates (Seaton) and (Rest of
Pickering) and the in-principle rates with a 30% reduction applied.
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FIN 09-26 June 17, 2026
Page 7
Table Three
Recommended Draft DC Rates (30%) Vs Current
The final rates will be calculated based on the Council approved Transfer Payment Agreement.
4.0 Discussion:
On June 1, the Province announced the DCRP under the Canada-Ontario Partnership to Build,
which allows municipalities to apply for $8.8 billion in province-wide funding for growth
infrastructure if they commit to reducing residential DC rates by at least 30 to 50%.
The Provincial and Federal governments created the DCRP to support economic growth by
accelerating housing-enabling infrastructure and directly boosting housing development
through lower costs. DCRP was introduced as part of a broader federal-provincial housing
affordability initiative that also included enhanced HST relief on new homes, with both
measures intended to reduce the cost of new housing and stimulate construction.
The purpose of this report is to update Council on the recently announced DCRP and to seek
Council approval to submit an application to the program. The details of the program are
outlined in Table Four below:
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FIN 09-26 June 17, 2026
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Table Four
Summary of DCRP Program Requirements
Area Key Details
Eligible Services Water, wastewater, stormwater, roads, transit, police, paramedics,
fire, and community infrastructure (e.g., libraries, recreation
centres)
Project Timing
Must not be currently under construction
Must start no later than July 31, 2030, and be completed no later
than October 31, 2035
Must be “shovel-ready”
Costs
Eligible: Only in-period growth related costs in a municipality’s
most recent DC background study and capital plan
Ineligible: Overhead costs (e.g., staff salaries), operating and
maintenance, taxes, non-essential furnishings, “soft” costs (e.g.,
design, engineering, legal fees, etc.)
Ineligible post-period costs (e.g., costs beyond the 2051
planning horizon of the 2026 Bylaw), costs that benefit existing
development
Reporting
Annual reporting detailing actual and forecasted expenditures,
project progress, actual DC relief provided in each year of
reduction period, new housing supported through the funded
projects
Other Requirements
Project must be shown to be financially sustainable and, where
applicable, municipalities must show they have consulted with
Indigenous communities and completed environmental
assessments
Projects that previously received housing enabling infrastructure
funding are ineligible
Municipalities must comply with the municipal Buy Canada or Buy
Ontario Procurement Directive.
The guideline for the DCRP indicates the program could provide grants of up to 90% of the
DC-eligible costs for housing-enabling infrastructure projects. Municipalities levying DCs are
encouraged to submit up to five ‘shovel ready’ projects per application. Individual projects may
be bundled.
Applications will be prioritized for higher funding based on deeper DC rate reductions beyond
30%, greater housing impact (through both DC relief to builders and project-enabled housing
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FIN 09-26 June 17, 2026
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capacity), and higher municipal contributions above the 10% minimum. Applications including
a 30% DC rate reduction are not expected to receive the maximum 90% Provincial contribution
towards eligible project costs. Table Four summarizes program requirements.
4.1 Description of Projects Selected
a. Fire Hall #3 (Seaton)
Fire Station #3, also referred to as station ‘Seaton B’, is a Fire Master Plan recommended
proposed 2-bay facility with sufficient space for tandem interior vehicle staging, including
required living and support spaces. The station is to be sized for staffing by up to two
operational 4-person crews. Overall, the building size is estimated at ~12,000 gross square
feet, to be co-located with Fire Master Plan recommended fire training tower and associated
training facilities on a 3-acre site. The site supports municipal residential growth and enhances
emergency service response times within the Seaton area.
b. William Jackson Road Reconstruction and Culvert Replacement
This project includes the reconstruction of approximately 1 km of William Jackson Drive from
Urfe Creek to Taunton Road (RR 4) in the Duffin Heights Neighbourhood. The reconstruction
includes:
• full depth road reconstruction;
• drainage improvements;
• roadside safety improvements; and,
• extension of pedestrian trail as part of the City’s active transportation network.
This project also includes the replacement of a 3800 mm diameter CSP culvert crossing Urfe
Creek that has reached end of life. The culvert will be replaced with an improved concrete box
culvert to meet current standards and improve capacity therefore reducing flood risk.
This project supports the Avonmore Ventures site plan development directly west of William
Jackson Drive by providing a reliable and safe road network for residents and emergency
access. The site plan includes the construction of approximately 170 residential units.
c. Audley Road Reconstruction and Culvert Replacement
This project consists of the reconstruction of 2 km of Audley Road from Fifth Concession Road
to Highway 7 in northern Pickering. The project scope includes:
• full depth rural road reconstruction;
• drainage improvements; and,
• replacement of 1800 x 1200mm concrete box culvert.
Audley Road has reached end of life and requires reconstruction to provide a safe and reliable
road network in northern Pickering. Audley Road is a main north-south corridor connecting
both southern Pickering and Ajax directly to the newly approved Northeast Pickering
Secondary Plan area which will unlock growth in population by approximately 72,000.
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FIN 09-26 June 17, 2026
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4.2 Growth Forecast and DC Revenues Forgone Over Three (3) Years
Forecasting growth over the next three years is a challenging exercise. There are many factors
to consider, including, but not limited to:
• economic uncertainty and evolving geopolitical considerations;
• current housing demand for the various residential unit types being offered locally and
within the Greater Toronto Area;
• readiness for developers to proceed with approved construction;
• capacity of City resources to accommodate the accelerated volume of building permit
applications;
• growth forecasts established through Envision Durham; and,
• intensity and frequency of Provincial legislative changes.
To assess the potential impact of the required rate reduction, City Development staff reviewed
the status of various residential development applications in Seaton and throughout the rest of
Pickering to determine:
• whether the subject lands are appropriately zoned for the proposed development;
• the status of site plan applications, including whether site plan approval has been
granted or is nearing completion;
• whether plans of subdivision have been registered, or are expected to be registered
within the next six months;
• whether building permit applications are supported by all applicable law approvals; and,
• the track record of developers in advancing development projects and delivering new
housing in a timely manner in the City.
4.3 Consultation with the Building Industry and Land Development Association
Staff also spoke with officials from the Building Industry and Land Development Association
(“BILD”) to discuss the DCRP. BILD noted that:
• DCRP would result in some stalled residential projects becoming more financially
feasible, so there will be an increase in residential development;
• BILD commissioned a report by Norman Consultation (formerly Altus Group) and
Finnegan Marshall Inc. to project growth (e.g. residential units) that would result from a
50% Development Charge Reduction Program and the temporary removal of HST on
home sales (until March 2027).
o Based on the BILD projections, incremental units that will proceed due to these
programs total 69,000 (=23,000/year * 3 years) for Ontario, of which Pickering’s
share is projected to be 1,890 units over the three years.
• BILD noted that there have been considerable fluctuations in Pickering’s condo
numbers over the years, and that their condo estimates should be viewed with caution,
with a potential variance of +/- 10%.
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FIN 09-26 June 17, 2026
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BILD projections are based on a 50% DC rate reduction. Staff inquired about the projections
based on a 30% DC rate reduction and understand that such information was not developed.
However, to put the City’s projections into context:
• The City estimates 2,198 residential units could be developed over the next three years
(see Table 5 below);
• 308 (= 2,198 – 1,890) residential units of the City’s projection are deemed to have
proceeded without DCRP; and,
• 1,890 (maximum) additional units, over the three years, would not have proceeded
without the DCRP and HST reductions (based on BILD projections).
The City projections are based on the following assumptions:
• The City would reduce residential DCs by 30%;
• The Region of Durham would be reducing their DCs by at least 30%;
• DCs would continue to be paid at the time of applicable First Occupancies;
• That the Fiscal Impact Assessment (FIA) associated with Seaton development remains
applicable;
• Estimates are based on data collected on June 10, 2026; and,
• No Minister Zoning Orders were considered.
Table Five below outlines forecast development activity based on three scenarios.
Table 5
Three (3) Year Development Activity Forecast
3-Year Development Forecast (Number of Units)
Unit Type BILD Forecast
Scenario *
City Forecast
Scenario
Median Forecast
Scenario
Singles /
Semis/
Townhouse
1,380 816 1,098
Small Apts
(1 Bedroom)
330 856 615
Large Apts (2+
Bedroom)
180 526 331
Multiple 0 0 0
Total 1,890 2,198 2,044
*Based on 50% reduction
Using the median development forecast scenario, the projected forgone DC revenues
associated with 30% residential DC rate reductions are summarized in Table 6 below.
Table 6
Forecast of Residential DC Revenues Forgone Over Three (3) Years
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FIN 09-26 June 17, 2026
Page 12
Unit Type 100% DC Rates 70% DC Rates Forgone DC Amount
Singles /
Semis/Townhouse
$47,007,576.00 $32,905,303.20 $14,102,272.80
Small Apartments
(1 Bedroom)
$10,252,050.00 $7,176,435.00 $3,075,615.00
Large Apartments
(2+ Bedroom)
$8,785,733.00 $6,150,013.10 $2,635,719.90
Multiple $ - $ - $ -
Total $66,045,359.00 $46,231,751.30 $19,813,607.70
Note: estimated forgone DC revenue is dependent on the timing of DC reductions taking effect
but is assumed to apply to building permits issued on a go-forward basis (i.e. this program
would not retroactively apply to already issued permits).
It is important to note that the City has some control over DC rates but no control over
development activity (e.g. the number and type of building permits pulled by developers). In
consideration of the above analysis and working assumptions, the City is projected to forego
approximately $19.8 million in residential DCs over the next three years by participating in the
DCRP. As DCs are used to pay for infrastructure projects to support growth, a key
consideration is the potential growth-related infrastructure projects the City could apply for and
receive grant funding for.
4.4 DC Indexing Continues on July 1, 2026
Pursuant to the City’s Development Charges By-law, residential and non-residential
development charges will be indexed effective July 1, 2026.
Based on the prescribed index, development charge rates are anticipated to increase by 2.9%.
If the City’s DCRP application is successful, residential development charge rates would be
reset to March 30, 2026 rates and frozen for a period of three years, with no further indexing
applied during the freeze period.
Process Summary
• The City submits a DCRP application to the Province;
• The Province reviews the application and issues a draft Transfer Payment Agreement
(TPA);
• Staff undertake a financial review of the draft TPA and negotiate any required
amendments or clarifications with Provincial staff;
• A report outlining the proposed agreement, financial implications, and recommended
participation will be presented to Council for consideration;
• Subject to Council approval and execution of the agreement, revised development
charge rates would be implemented in accordance with the terms of the DCRP
program.
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FIN 09-26 June 17, 2026
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4.5 The Fine Print
• Without the opportunity to index residential DC fees during the three-year freeze, this
will result in an additional reduction in DC fees. If you assume a 3% construction
inflation cost factor over three years, this will create a further “stealth” reduction of
9.27% in the DC fee rate. In other words, capital construction costs would have
increased but Pickering’s DC rates have remained frozen resulting in fewer dollars
collected.
• Approval of the City’s application is at the sole discretion of the Province and funding is
not guaranteed if the application is not successful.
• Final program terms, eligible costs, reporting requirements, and funding conditions may
differ from current assumptions.
• The TPA could include municipality-specific claw back provisions. This is a major
concern. In other words, if the City does not hit the housing units target, as reflected in
the City’s application, the Province, may have the right to claw back its funding. At this
current time, there is no additional information to reflect how the claw back would be
calculated. You could argue that there are two possible types of claw back scenarios:
a) Province wide recession results in the large majority of municipalities not hitting
their housing target;
b) Aggressive or overly optimistic high growth scenario fails to materialize resulting
in the municipality not hitting their housing target.
• Any project cost overruns, scope changes, or expenditures exceeding approved funding
limits will remain the responsibility of the City. This is a major concern due to the fact
that cost overruns haven’t been clearly defined or identified. For example: if the DCRP
submission is $100 for a project and when the project is tendered in year X, it is now
$110 – is this considered a cost overrun? Finance staff have asked the Province to
provide clarification on this issue and have not yet received an answer. In addition, it
should be noted that there are recent examples where municipalities have experienced
uncontrollable cost events overruns, such as tariffs that have had an impact on
municipal budgets. Currently, uncontrollable expenses under the TPA would be a
responsibility of the municipality.
• Participation in the program will require ongoing monitoring, reporting, and compliance
obligations throughout the funding period.
Next Steps
City staff are working on the detailed and complex DCRP application with a hard deadline date
of June 19,2026 by 10:00 am.
Should the City receive the draft TPA from the Province, Finance staff will analyze the draft
agreement to ensure that it represents a positive outcome and/or corresponding benefit for the
City. If the opportunity presents itself and if required, the CAO & Director, Finance & Treasurer
will try to negotiate more favorable terms. At the end of day, a report will be prepared for
Council’s review and consideration of the TPA.
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FIN 09-26 June 17, 2026
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Attachment: None
Prepared By: Raghu Kumar, Senior Financial Analyst, Development Finance & Capital
Management
Prepared By: James Halsall, Division Head, Finance
Approved/Endorsed By: Kyle Bentley, City Development & CBO
Approved/Endorsed By: Stan Karwowksi, Director, Finance & Treasurer
SK:KB:rk:jh
Recommended for the consideration of Pickering City Council By:
Marisa Carpino, M.A.
Chief Administrative Officer
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