Is it a Good Idea to Pay a Development Charge?

development charge

If you are planning a new development, you may be wondering if it’s a good idea to pay a development charge. This fee is used to cover the initial capital costs of a project. It’s also used to help manage the operating costs that arise from maintaining assets and the construction of capital infrastructure. For more information, contact the Development Charges department.


A development charge is a recurring fee imposed by a city to build or improve public infrastructure. It can be used for a variety of purposes, including financing public infrastructure and private profit generated through public planning regulations and land management. The development charge is either levied on the developer or landowner. The decision on whether to levie a development charge will depend on a variety of factors. One important consideration is the relationship between a development charge and a developer’s fixed costs.

While development charges can help stimulate new housing, they can also slow new development. Higher development charges make building more expensive, which discourages builders to build new homes in that area. Therefore, it is important to consider the implications of increasing development charges before implementing them.


The process of calculating a development charge involves an assessment of the land development proposal. This will include the development plan and any other information related to the proposal. The staff of the Toronto Building then calculates the development charge based on this information, in accordance with policy and rates. If the proposed development is not allowed, then the fee will be reduced accordingly.

The charge is used to recover the capital costs of growth. This is in addition to the cost of subdividing the land. Typically, the process begins with the preparation of a master plan for growth and a capital works program. In addition, land use planning is involved. Significant overruns on projects, as well as a significant decrease in growth projections, can prompt a review of a development charge.

Interest rates

Interest rates on development charges must be approved by the Commissioner of Finance and Corporate Services and the Chief Administrative Officer. This policy should be made clear to the public and developers, and it should not be higher than the Municipal Finance Authority’s debenture rate. In addition, it should be reflected in the local government’s financial plan and annual financial statements.

In Ontario, interest rates on DCs vary widely. Rates vary depending on the type of development and what it is used for. In general, rates are around 5%.