Bracebridge General Committee approved the updated draft Development Charges Interest Rate Policy, in the September 3, 2024, meeting.

According to a report by Director of Finance/Treasurer, Paul Judson, the Town is revising the current Development Charges (DC) policy to align with the province’s prime interest rate plus 1%.

The report indicates, “With the passage of Bill 23, the province amended Section 26.3 of the Act to limit the interest rate that may be charged to the average prime rate plus 1%. Currently this rate is 7.95%.”

Judson also indicates that the passing of Bill 185, Cutting Red Tape to Build More Homes Act, last June, received Royal Assent. He added, “Through Bill 23, the province reduced the length of time that a DC Rate Freeze may occur from 2 years to 18 months.”

The report continues that the additional 1% supports costs associated with issuing DC Payment Deferrals and Rate Freezes. It adds, “If appropriate, staff may recommend revising this premium over time, as the budget impact of the DC Deferral and DC Rate Freeze provisions become better understood.”

According to Judson, DC Deferrals and Rate Freezes have a negative impact on municipal revenues, therefore, under the Act they are permitted to charge interest on them “at whatever rate they deemed appropriate.”

His report continues that the Town’s Interest Rate Policy represents the updated freeze period and maximum interest rate. This change will compensate the Town for investment income that it would have earned upon collecting DCs sooner.

It adds that in addition to updating the Policy to reflect the province’s legislation modifications, it also reflects changes to the Town’s new DC By-law.

It continues that the Town’s updated By-law includes the removal of references for non-profit housing developments and universities and colleges because they’re now exempt from DCs, and adding Section 29 to confirm that interest rates won’t be charged on DC Rate Freezes or Deferrals for Attainable Housing.