HomeMy WebLinkAboutFIN 07-26
Report to
Council
Report Number: FIN 07-26
Date: May 25, 2026
From: Sta Karwowski
Director, Finance & Treasurer
Subject:
2025 Building Permit Stabilization Reserve Fund
File: F 4910-01
Recommendation:
1. That Report FIN 07-26 regarding the 2025 Building Permit Stabilization Reserve Fund be
received; and,
2. That the appropriate officials of the City of Pickering be authorized to take the actions
necessary to implement the recommendations in this report.
1.0 Executive Summary:
The purpose of this report is to fulfill Section 7(4) of the Building Code Act (the “Act”) which
requires the City to prepare an annual report of building permit, inspection fees, related
administrative and enforcement costs.
2.0 Relationship to the Pickering Strategic Plan:
The recommendations in this report respond to the Pickering Strategic Plan Priority 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:
This report contains information pertaining to the financial status of the Building Permit
Stabilization Reserve Fund as of December 31,2025.
FIN 07-26 May 25, 2026
Page 2
4.0 Discussion:
The purpose of this report is to fulfill Section 7(4) of the Building Code Act (the “Act”) which
requires the City to prepare an annual report of building permit, inspection fees, related
administrative and enforcement costs.
In December 2005, Council approved Report PD 41-05, which enacted a new building permit
process and fees under the Act. The Act requires permit fees to be accounted for and not used
to subsidize City functions other than the administration and enforcement of the Act and the
Ontario Building Code.
The purpose of the Building Permit Stabilization Reserve Fund is to provide a source of funds
for current operating budget costs during an economic downturn to offset lower building permit
revenues. Without such a reserve fund, reduced growth and permit volumes during a downturn
could result in severe budgetary pressures which could impair the City’s ability to enforce the
Act and the Ontario Building Code.
The Act requires that an annual report be prepared that includes the total Building Permit fees
collected in the previous 12-month period and a summary of directly and indirectly related
administrative costs.
As approved by Council (Resolution #665/25), Watson & Associates Economists Ltd. was
retained to undertake a review of the development application process encompassing their
planning, building permit, and engineering fees. The ultimate objective of the fee review project
was to develop user fee structures to recover a reasonable share of the cost of services
provided to the public and to provide financial stability for the delivery of these services
(including the evaluation of building permit reserve fund levels for the sustainable
administration and enforcement of the Act).
Subsequent to Council’s direction, Watson & Associates completed the review and provided
recommendations intended to improve cost recovery and align the City’s fee structure with
applicable legislative requirements and industry best practices. As part of the review, it was
recommended that the allocation of indirect costs recoverable through development-related
fees increase from 17% to 21% on a go-forward basis. The recommended adjustment is
intended to improve cost recovery and help reduce reliance on the municipal tax base in
funding development review services.
Building permit revenues are inherently sensitive to economic conditions and development
cycles, whereas staffing and regulatory obligations under the Act remain relatively fixed.
Accordingly, reserve balances are intended to provide financial continuity through cyclical
fluctuations in permit activity. The City’s current reserve balance continues to support this
objective and broader long-term financial sustainability goals.
The Building Permit Stabilization Reserve Fund has a 2025 year-end balance of $5,802,335
which can be used as a possible funding source for future Building Services operating and
capital budget costs in the event of slower growth to offset lower building permit fee revenues.
FIN 07-26 May 25, 2026
Page 3
Annual Report – Building Permit Fees
for the year ended December 31, 2025
Building Permit Revenue $4,754,067
Costs:
Direct Costs (3,801,837)
Indirect Costs (646,312)
(4,448,149)
Excess/(Shortfall) revenue Over Costs $305,918
Building Permit Stabilization Reserve Fund
Opening Balance, January 1, 2025 $5,312,868
Add: 2025 Contribution 305,918
Add: 2025 Interest Income 265,069
Less: Development Applications Approval Process update (81,520)
Closing Balance, December 31, 2025 $5,802,335
Attachment: None
Prepared By: Raghu Kumar, Senior Financial Analyst, Development Charges & Capital
Management
Approved/Endorsed By: James Halsall, Division Head, Finance
Approved/Endorsed By: Stan Karwowski, Director, Finance & Treasurer
SK:rk
Recommended for the consideration of Pickering City Council By:
Marisa Carpino, M.A.
Chief Administrative Officer