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'No longer required': Development charge moratorium to expire

City waived $1.4 million in industrial development charges since 2010, which helped to bring in over $150 million in local growth, say staff

After more than a decade in effect, the City of Orillia’s moratorium on industrial development charges (DC) is set to expire at the end of December.

In place since 2010, the city has waived approximately $1.4 million in industrial DCs since the moratorium was put into effect, which brought $150 million in industrial development into the city over that time period, city staff said.

Meant to stimulate local industrial development, the moratorium was “instrumental” to bringing such development to the city through a period of economic growth, stimulating the local economy through both job creation and an increase in the tax base, staff explained.

“Among the local companies to take advantage of the moratorium in Orillia were three of the city’s largest employers and manufacturers, Hydro One, Kubota Metal Products and CCI Thermal Inc.,” Michael Ladouceur, the city's interim director of business development, culture and tourism, said in a statement to OrilliaMatters.

“Hydro One has cited the moratorium on industrial DCs as one of the factors leading to its investment in Orillia as the site for its grid control centre within the Horne Business Park,” Ladouceur said.

The city currently has the fourth lowest non-residential development charge rates in Simcoe County, but with employment lands in high demand locally and provincially, the moratorium is no longer required to encourage development, Ladouceur said.

“With employment lands in high demand, and the current status of the DC Reserve, the moratorium is no longer required to serve as an incentive to stimulate development within the manufacturing sector,” Ladouceur said. 

At Horne Business park, the “largest source of fully serviced employment lands” in Orillia, roughly 80 per cent have either been sold or are currently in an agreement of sale.

“Province wide, employment lands are highly sought after and in high demand with very low inventory. The (city's) business development division will continue to market and meet with potential investors and developers regarding the remaining lands available,” Ladouceur said.

Although it delivered industrial growth to the city, the moratorium has led to a “substantially negative” position for its development charge reserve fund through 2028, with deficits projected in the millions over that time.

The reserve fund's balance was negative $11.1 million at the end of 2021, with a negative balance projected until 2030.

Staff said the reserves will be replenished through future growth, and that an upcoming DC background study will provide further information on the financial impacts of DCs.

“Negative balances are considered in the upcoming background study calculations and recovered through future growth. In the interim, these balance as internally temporarily financed,” said John Henry, the city's CFO/treasurer. 

Since being put into effect for a three-year period in 2010, the industrial DC moratorium was extended three times.


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Greg McGrath-Goudie

About the Author: Greg McGrath-Goudie

Greg has been with Village Media since 2021, where he has worked as an LJI reporter for CollingwoodToday, and now as a city hall/general assignment reporter for OrilliaMatters
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