Item - 2025.PH21.3

The Planning and Housing Committee recommends that:

1. City Council amend the City of Toronto Municipal Code, Chapter 441, Fees and Charges, Appendix C - Schedule 13, effective July 1, 2025, substantially in accordance with the revised fee schedule as found in Attachment 1 to the report (April 24, 2025) from the Deputy City Manager, Development and Growth Services, with the following additional amendment:

a. Delete the dollar value of “$186,822.48” in Ref No. 4 – Application Fee for Holding By-law Amendment –  and replacing it with the following dollar value: “$48,898.28”.

2. City Council request the Chief Planner and Executive Director, City Planning, in consultation with the Executive Director, Development Review Division, to include any recommendations related to Minor Variance and Consent application fees, in accordance with the approach identified in the 2024 Operating Budget for City Planning, in a report on the Committee of Adjustment Service Delivery Model Review in the third quarter of 2025.   

3. City Council request the Executive Director, Development Review Division, to undertake a comprehensive review of the Site Plan Control application review process and report back to Council by the third quarter of 2026 with an updated service standard and fee schedule for Site Plan Control applications. 

4. City Council authorize the Executive Director, Development Review Division, to implement an Application Fee Policy, effective July 1, 2025, substantially in accordance with Attachment 10 to the report (April 24, 2025) from the Deputy City Manager, Development and Growth Services.

5. City Council authorize the City Solicitor to introduce the necessary Bills to give effect to City Council’s decision.

6. City Council authorize the City Solicitor to make such stylistic and technical changes to the amendment to the City of Toronto Municipal Code as may be required.

7. City Council authorize the Deputy City Manager, Development and Growth Services to take all necessary actions to implement Council’s decision.

8. City Council direct the Deputy City Manager, Development and Growth Services to undertake a comprehensive development application fee review and report back to Council on a regular four-year cycle, in accordance with the City's User Fee Policy.

Through the processing of development applications, the City's development review service shapes how the city grows and delivers services necessary to successfully promote and manage growth. This service is critical in maintaining Toronto's position as a world-class city by supporting the delivery of new housing supply; transit projects; healthcare facilities; innovation, manufacturing and industrial facilities; landmark projects; and critical infrastructure that support our social and economic prosperity, growth and cohesion.

The City of Toronto's development review service continues to navigate significant legislative change as well as market and geopolitical uncertainty. To address resultant changes in development and application processing trends, the City is focused on transforming its organizational structure and processes, with the goal of expediting the review of all development projects, especially those that deliver new affordable and purpose-built rental homes and support economic growth and job creation.

Municipal Code Chapter 441, Fees and Charges, Appendix C, Schedule 13 sets out the City's fees for processing development applications. Fees are intended to recover the cost of services provided by all divisions engaged in the development review process. The current development application fee schedule came into effect on September 1, 2022.

As directed by Council and in accordance with the City's User Fee Policy, City staff (together with consultants KPMG and Watson and Associates Economists) undertook the 2024 Development Application Fee Review (the 2024 Review). Detailed findings of this review are provided as Attachments 2 -10. Subject to Council approval, the recommended fee schedule included in Attachment 1 to this report will come into effect on July 1, 2025.

The recommended fee schedule enables full cost recovery for the processing of development applications, except for Site Plan Control, Minor Variance, and Consent applications, which account for approximately 60 percent of the estimated cost increase. Additionally, it streamlines and simplifies development application fees, reduces cost for many major application types, and makes fees more predictable. For applicants, this means that some fees will decrease, some will not change, and some will increase. Specifically, new proposed fee structures will, among other things:

- Simplify the calculation method for Official Plan Amendment/Zoning By-law Amendment, Zoning By-law Amendment, and Site Plan Control applications by introducing a single, uniform multiplier that applies to both residential and non-residential gross floor area;

- Reduce Zoning By-law Amendment application fees for most scales of mixed-use development and set a maximum cap of $715,000 ($743,600 including the 2025 Cost of Living Adjustment) for all Zoning By-law Amendment applications;

- Support housing development by reducing combined Official Plan Amendment/Zoning By-law Amendment application fees for most scales of mixed-use development and setting a maximum cap of $800,000 ($832,000 including the 2025 Cost of Living Adjustment) for all combined Official Plan Amendment/Zoning By-law Amendment applications;

- Support all scales of housing development with the City shouldering the majority of the cost increase for Site Plan Control applications while the Site Plan process is re-engineered in 2025 (i.e., staff recommend only 25 percent of the estimated cost increase be passed on to applicants); and

- Implement a new Plan of Condominium process and application fees which remove an estimated $800,000 of annual processing costs associated with application circulation and review, with savings to be passed on to applicants.

In addition to the above, the City of Toronto is committed to continuous improvement and has already seen significant improvement in the development review process as a result of ongoing organizational and process improvements. Notably, for all major development application types (including combined Official Plan Amendment/Zoning By-law Amendment, Zoning By-law Amendment and Site Plan Control applications), review times have improved by over 80 percent when compared to the previous 5-year average.

Over the course of 2025 and as outlined in this report, the Development Review Division, working with internal and external partners, will continue to focus on systemic improvements to the development review process. This includes:

- Developing standard operating procedures (SOPs) and clearly identifying application requirements for each application type to enhance predictability, reduce cost for applicants and improve efficiency in the process leveraging a Lean Six Sigma methodology;

- Providing staff with training and tools (including a library of standardized comments) to ensure more consistent and timely interpretation and application of regulatory frameworks;

- Developing new service standards to provide predictability and improve service delivery for all stakeholders in the development review process;

- Improving communication between the City and all parties involved in the development review process through both digital and analog methods;

- Developing consistent streaming and prioritization criteria to expedite applications that propose significant new affordable and purpose-built rental housing and support economic growth and job creation such as new industrial and manufacturing facilities;

- Introducing new technology tools and enhancing existing tools to support improved workflows, efficiencies and performance tracking between City staff and applicants;

- Establishing Key Performance Indicators (KPIs) to measure performance and publicly track and report on performance; and

- Improving complement management to ensure a dynamic allocation of staff resources across community planning districts to address fluctuations in application volumes as they arise.

In tandem with these tangible actions to streamline processes and expedite development approvals, the City of Toronto continues to make significant financial investments to stimulate housing development. This includes City Council's approval of the Rental Housing Supply Program and its various streams which provide:

- Capital funding and an exemption from development charges, parkland dedication fees, community benefits charges and the waiver of planning application and building permit fees for eligible affordable rental projects;

- Deferral of development charges payable for up to 5,600 purpose-built rental units for as long as they remain rental;

- Implementation of a new Multi-Residential Property Tax subclass which provides a 15 percent property tax reduction for new purpose-built rental developments for a 35-year period; and

- Deferral of development charges for eligible multi-unit ownership/condominium projects with a minimum of 5 percent units as affordable rental or ownership (interest free and at June 2024 rates for four years).

As the City advances policy and program initiatives to address the housing crisis, including new or expanded incentive programs, findings from the 2024 Review illustrate a need to further investigate and evolve how the City funds the development review service in ways that recognize and balance the inherent tension between the provision of a critical public service and provision of service for a fee.

Following implementation of the recommended fee schedule, staff recommend returning to a four-year cycle for the next comprehensive review, as supported by the City's User Fee Policy.