Who will pay for the LRT project’s Stage 2

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The road header, the heavy machine that will excavate the downtown tunnel and stations has started working on the $2.1 billion Confederation Line LRT project. Digging work commenced in October.

         Huge development charge increases expected if city can levy fees based on future transit demand projections

Ottawa Construction News staff writer

If Ottawa municipal officials’ wishes come true, new homeowners will experience a shocking increase in development charges to pay for the light rail transit system expansion.

Currently, municipalities can collect 90 per cent of the costs of the growth related transit infrastructure costs based on existing service levels through development charges.  The city wants this to go to 100 per cent.  The bigger change, advocated by Ata Vista Coun. Peter Hume, chair of the city’s planning committee and others at City Hall, would allow the city to use future transit demand projections, not historical service levels, to calculate the charges.

Rob Pierce, chair of the GOHBA’s builder-developer council, declined to speculate how much these changes would increase development levies, but some industry leaders have indicated they could reach $10,000 or more.

The road header, the heavy machine that will excavate the downtown tunnel and stations has started working on the $2.1 billion Confederation Line LRT project.  Digging work commenced in October.
The road header, the heavy machine that will excavate the downtown tunnel and stations has started working on the $2.1 billion Confederation Line LRT project. Digging work commenced in October.

“The industry recognizes that the transit system will benefit new development, but we need to look at the location of it and the cost,” he said.  “This is a huge city-wide benefit, and it’s not fair to suggest that a disproportionate share should go to new developments only.”

There is also concern that the development charges could increase abruptly, though this is unlikely in the short term.

The city must approve its development levy changes this summer, but the revisions to allow the city to collect 100 per cent of the cost of transit projects, and to calculate future demand, would need new provincial legislation before they could be implemented – an uncertain prospect in the next few months.

However, it is conceivable that the costs may be thrust on home builders in five years, when the next development charge review occurs, or the province might pass special legislation to accelerate the process to permit the increases in the summer of 2014.

“The transportation master plan has huge costs, and the city is putting everything forward as one project, for Stage 2 of the light rail transit project – there’s 19 new stations and 35 kilometres of new track,” Pierce said.  “The cost is huge.  We support rapid transit … it is a key part in future development in the city.  However, we believe the costs should be shared fairly by all residents, and not imposed as a new tax on new home owners, especially those supporting the municipality’s intensification objectives.”

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