Item - 2026.PH32.8

The Deputy City Manager, Development and Growth Services recommends that:  

1. City Council amend the City of Toronto Municipal Code, Chapter 441, Fees and Charges, Appendix C - Schedule 13, effective January 1, 2027, substantially in accordance with the revised fee schedule as found in Attachment 1 to this report.

2. Upon the by-law to amend the City of Toronto Municipal Code, Chapter 441, Fees and Charges, Appendix C - Schedule 13 coming into effect, City Council authorize the repeal City of Toronto By-law 946-2023 to "adopt Amendment 688 of the Official Plan of the City of Toronto respecting adding a new complete application requirement for Site Plan Control." 

3. City Council authorize the City Solicitor to make such stylistic and technical changes to the Bills submitted to Council giving effect to Recommendation 1above, as may be required, and authorize the City Solicitor to submit a Bill to Council to repeal By-law 946-2023 upon the coming into effect of amendments to Chapter 441 as set out in Recommendation 2 above.

This report recommends an updated application fee schedule for Site Plan Control applications (see Attachment 1, reference numbers 80 to 84.1) to reflect service delivery improvements identified through the City's ongoing Site Plan Process Review (see Attachment 2).

This report should be read as an update to the 2024 Development Application Fee Review report (the 2024 Review). Council approved the 2024 Review with a modest fee increase in May 2025 and requested staff to undertake a focused Site Plan Process Review and report back by the third quarter of 2026. Should Council adopt the recommendations of this report, some Site Plan application fees will remain status quo while others will be reduced.

The financial impacts outlined in this report result from recommended changes to the City’s development application fee structure, detailed in Attachment 1. Alignment to the financial implications related to staff resourcing or otherwise will be assessed through the 2027 and 2028 Budget process.

The 2024 Review showed that the City's Site Plan review service does not operate at full cost recovery, producing an under-recovery of approximately $13.7 million annually. To address this, Council requested staff review and report back by the third quarter of 2026 on two key objectives:

- Reduce the City's cost of processing Site Plan applications (i.e., the time, in hours, it takes for staff to review an application).

- Increase cost recovery for the Site Plan service (i.e., how much of the City's costs are recovered from application fees).

Municipal Authority to Collect Fees

Divisional costs to process average annual application volumes are recovered through the fees established under Chapter 441, Fees and Charges, Appendix C - Schedule 13 of the Municipal Code.

The Planning Act enables municipalities to impose fees by by-law for the purpose of processing applications under the Act. Further to this legislated authority, the City's User Fee Policy (2011.EX10.2), identifies four categories of user fee. Most development application fees fall into the "full cost recovery" category. The User Fee Policy requires periodic review of user fees following a Full Costing Model to account for the direct, indirect and capital costs of providing a service.

Within this framework, Council adopted the 2024 Development Application Fee Review (2024 Review) in May 2025. The approved fee schedule, which went into effect on July 1, 2025, applies to all development application types, excluding Committee of Adjustment applications, and generates average annual revenues of $62.8 million against annual average processing costs of $80.1 million. This resulted in an annual average gap in revenue of approximately $17.3 million at the time of the 2024 Review; however, the true gap is determined and reconciled annually based on application volume and fee revenue actuals.

Site Plan Application Review Cost Recovery

To address the gap in revenue associated with the City's Site Plan review service, Council directed staff to leverage a Lean Six Sigma methodology to streamline Site Plan review activities with the twin goal of reducing processing costs and improving cost recovery.

The cost of the review of Site Plan applications represents approximately 48 percent of the City's total cost ($80.1 million) of providing the development application review service. The 2024 Review identified annual Site Plan processing costs of approximately $38.8 million and anticipated annual average revenue of $25.1 million, reflecting approximately 65 percent cost recovery for the existing review service. Approximately $13.7 million (79 percent) of the of the City's total $17.3 million revenue gap is attributable to Site Plan processing.

This report details the findings of the Site Plan Process Review, increases cost recovery from 65 to 73 percent on aggregate. Improved cost recovery is achieved by reducing the cost of processing for Site Plan applications from approximately $38.8 million to $25.7 million annually (a 34 percent reduction). The goals of reducing processing costs, improving cost recovery and continuously improving customer experience are achieved through the introduction of a streamed Site Plan review service, enabling a more proportionate allocation of resources, together with updated application volume assumptions reflecting current development trends.

Recommended Fee Schedule

The recommended fee schedule continues to under-recover the cost of Site Plan review services by approximately $6.3 million per year (down from $13.7 million). This gap in revenue will continue to be recovered from alternative sources of funding, which may include non-application-based revenues, when necessary. Additional adjustments to address the revenue gap may be considered through the 2027 Budget process with follow-up reporting. Table 1 below includes a comparison of 2024 Review and Site Plan Process Review outcomes.

Table 1 - Comparison of 2024 Review and Site Plan Process Review Outcomes

Site Plan application fees are categorized as "full cost recovery" under the City's User Fee Policy and are automatically adjusted for inflation on January 1 of each year.

Should the recommended fee schedule be adopted, the annual cost of living adjustment (COLA) amount will be automatically applied to the dollar values shown in Attachment 1 on January 1, 2027, when the fee schedule comes into effect.

The recommended fee schedule assumes that staff will spend less time than they currently spend processing Site Plan applications. Development application fee revenue allocations will remain proportional to divisional effort; however, overall divisional effort for providing Site Plan review services will decrease. This report does not propose any immediate changes to staff resourcing. Complement management planning will continue through the 2027 and 2028 Budget process. The Chief Financial Officer and Treasurer has reviewed this report and agrees with the information as presented in the Financial Impact section.