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What are Community Benefits?

In exchange for permitted increases to height in density, the City secures capital funds tied to zoning by-law approvals. Prior to 2019, these funds were often referred to as section 37, after the section of the same number in the provincial Planning Act. In 2019, the province amended the Planning Act to change how these funds were collected, and renamed them to “Community Benefit Charges.”

Since 2022, all development now uses the new CBC rather than the former section 37. The information on this page primarily concerns funds collected under the former section 37 although projects that are funded by the new CBC will be added. For information about CBCs, please visit my resource page.

Community Benefits Charges Bylaw

Ontario Planning Act

Securing Community Benefits - Section 37

Prior to 2022, when a zoning by-law was to be brought forward to City Council for approval, the applicant and the local councillor would negotiate what section 37 would be paid, generally upon application for the first above-grade building permit. These values would typically be between 10-15% of the property land valley.

The language used when the monies are secured helps focus where it can be spent. Councillors would frequently either direct the money broadly–such as to streetscape improvements, park improvements, affordable housing, etc.--but could direct the money be very used for very specific projects. In some cases, the section 37 collected is in the form of a non-monetary payment. For example, the City secured 1,300 sq m of community space at 200 Dundas Street East that was provided to the City in lieu of a cash payment.

As they are secured as part of the zoning by-law approval, current and future applicants are bound to pay the section 37 despite the introduction of the CBC. In many cases, the payments were indexed, so that interest would be added to the total after the payment was made.

Securing Community Benefits - CBCs

Under the current regime, when a developer draws a building permit, they are required to pay 4% of their land value when a building permit is drawn. While an in-kind benefit(s) can be secured, this 4% figure represents a maximum value that the developer is permitted to pay. Unlike CBCs, the 4% figure isn’t calculated until a building permit is drawn, so determining an exact dollar value will always be premature until then.

While Councillors can make suggestions about how CBCs are spent, these monies are spent through the City budget process. Under provincial law, the budget decisions are the purview of the Mayor, and they have the authority to ultimately choose how CBCs are spent.

Unlike section 37, the City cannot indefinitely hold onto this money; the City is required to assign CBCs to future projects to ensure it is spent.

The Appropriateness of Using Community Benefits

In general, there are three pieces that guide the spending of community benefits.

The first is that the project must be for capital expenses, not operating. You can use community benefits to build a library, but you can’t use them to maintain the library or pay workers.

The second is based on the language of the zoning bylaw where the funds were secured. The language can be specific about where the money goes, but also could be specific about the geography of where it is spent. As an example, the section 37 in the case of 219-231 Dundas Street East set aside $500,000 for “park improvements of streetscape improvement,” $500,000 for “community, recreation and/or cultural space improvements” and $500,000 for “ land for purpose built rental housing with mid-range or affordable rents and/or land for affordable housing and/or affordable ownership housing.” For CBCs, councillors can request where money is directed, but as above the decision is ultimately up to the Mayor.

The third broad restriction is that capital projects that receive the funding must have some sort of geographic relationship to where the money is generated, and capital projects must be for public, not private, benefit. This ensures the residents in the new building, as well as the general public, can “enjoy” a benefit.

Frequently Asked Questions

Why is "Received" sometimes more than "Secured"?

In cases where the City received more dollars than were originally secured it is because the amount originally agreed upon was indexed to the rate of inflation at the time the funds were received, which could be several years after the development was approved.

Why do some developments have a negative balance?

In cases like these, it means that either the funds were secured for a specific project or city staff/my office have earmarked these anticipated funds for future projects and makes an assumption that the funds will be available at the time the project begins. These are typically for major capital projects such as the reconstruction of John Innes Community Centre, YongeTOmorrow, or the First Parliament Site community space.

Why do some developments have $0 secured?

Developments that have $0 secured but are listed on the map and/or are attached to projects means the City secured in-kind community benefits such as an on-site daycare or community space. It could also mean that the development falls under the new 4% CBC limit imposed by the Provincial Government and the value has not yet been determined. The amount will be updated once City Planning determines what the value of the contribution should be based on when the above-grade building permits are issued.

What is the difference between "Planned" and "Allocated"?

Planned means the funds have either been earmarked or were secured for a specific project that has not yet started or been approved.

Allocated means the funds have been released by City Council to a City division/agency or a community not-for-profit organization but have not been spent yet.

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