Blue Box and Diversion Costs Now Eligible Under Development Charges

Under recent changes to the Development Charges Act, development-related waste management capital costs for Blue Box and other diversion programs may now be eligible to be included in the calculations for determining municipal development charges (DCs). Landfill sites and services, and incineration of waste and services remain ineligible.

In general, when a new home or commercial development is constructed, the municipality recovers a predetermined amount from the developer as a DC to fund future development-related capital costs. A development-related capital program sets out the projects required to service anticipated development over the following 10-year period.

Development-related capital costs for land, buildings, equipment and vehicles for blue box, green bin and other municipal collection and diversion programs can now be included in the Background Study required by legislation in order to update a DC by-law and amend the associated charges. The Background Study estimates future community growth and then specifies which capital costs, or share of capital costs are to be included in the DC calculation. The Background Study must also include an asset management plan that details ongoing operational costs for the new capital asset to ensure costs are sustainable over the life of the new asset. Mandatory notice periods and other requirements still apply to new Background Studies before DC by-laws can be amended. Several municipalities have already begun the process to update their DC by-laws to include Blue Box and diversion programs by completing Background Studies. Suitable examples of completed studies can be obtained by contacting CIF staff.

Municipalities anticipating high residential and/or ICI growth rates over the next 10 years have the greatest potential to benefit from recovering a portion of their waste management capital costs through newly eligible charges. Likewise, municipalities with little or no growth, or very low waste management capital costs over the next 10 years may find that the cost of the required Background Study exceeds future recoveries.

Municipalities are encouraged to contact their respective development charges consultant to determine whether updating of their local DC by-law would be beneficial given the recent legislative changes.

This blog was prepared for general information purposes by Archibald Engineering and provided to share with CIF stakeholders via CIF Connections Blog. It does not represent a legal opinion, or other professional advice related to development charges or legislative changes.