City Council Brief

Proposed 19% Building Permit Fee Hike

The Town of Grimsby held a public meeting to discuss a proposed 19% increase in building permit fees to achieve full cost recovery for the building department. The department currently faces a $138,000 annual shortfall between operating costs and fee revenue, with its reserve fund declining. Industry representatives requested a one-year deferral citing the worst housing downturn in a generation, while staff emphasized that building departments cannot be funded through the tax levy under provincial law. Council deferred the decision to allow further consultation between staff and industry representatives.

Building Permit Fee Increase to Address Shortfall

The building department's annual operating costs of $865,000 exceed current fee revenue averaging $727,000 per year, creating a $138,000 shortfall. Paul from staff clarified: "The building code statute act is clear across the province...building departments across Ontario should not be funded through the tax levy at all. So any of our expenses, our salaries, our vehicles, everything is not does not affect the tax levy."

The department's reserve fund currently stands at $1.5 million but is projected to drop to approximately $1 million by the end of 2026, with an annual draw of $472,000 anticipated. Staff indicated the target reserve fund should be $1.4-1.5 million, requiring annual transfers of $63,000 over the next five years, representing 11% of the proposed increase.

Industry Opposition Citing Economic Downturn

Mike Collins Williams, CEO of West End Homebuilders Association, noted the industry is experiencing "the worst sharpest downturn in a generation and some would say that this is even worse than the 1990s." He emphasized that the fee increase would primarily affect everyday homeowners building porches, decks, pools or renovating homes, stating: "This increase is falling overwhelmingly on regular everyday taxpayers, not developers, and it's happening at a time when affordability is already a major concern."

Chuck McShane, CEO of Niagara Home Builders Association, questioned the timing: "If new residential activity has decreased by approximately 85%, how is it that the cost to administer and enforce building permits have increased to the point where a 19% hike is being proposed?" He recommended "that the town of Grimby follow the example set by the city of Thoro just a couple of weeks ago and pause the proposed fee increase for one year, giving the industry time to regain stability."

Permit Statistics and Methodology Change

A significant clarification emerged regarding the claimed 85% reduction in construction activity. Staff explained that between 2016-2019, the town issued individual building permits for each apartment unit, meaning a 207-unit building generated 207 separate permits. Since 2020, the system changed to issue one permit per building regardless of unit count. This accounting change creates the appearance of a dramatic decrease in permit activity when actual construction levels may not have declined as severely.

Fee Comparison and Impact on Homeowners

According to the benchmarking study, Grimsby's current fees are among the lowest of comparable municipalities. The proposed fees with the 19% increase would place the town close to the median. For residents, the increase would mean approximately $40 more for minimum permits (decks, sheds), $200-$300 additional for condos, and $500-$560 more for single-family homes. Staff downplayed the impact, stating: "Would $500 turn someone away from a house? I think we're already at a point where these concerns are already existing... I don't think it's going to make or break the $900,000 average sale price in Grimsby."

Council Deliberation on Implementation Approach

Councilor Vardy questioned whether the 19% increase was too steep and suggested "sort of ramping up just sort of do an incremental fee charge sort of, you know, start off with 5% and then kind of bring it up there over the next 5 years." Councilor Bye opposed deferral, calling it "disingenuous" and "kicking the problem down the road to a new council," noting that nothing will change in 7-8 months regarding the shortfall.

Motions

No motions were formally passed. Council deferred the decision to the next meeting and requested that staff bring a report after ensuring consultant and building industry representatives are "on the same page" with numbers.

Attendees

The transcript does not provide a complete list of councillors present. Councillors and presenters mentioned by name include:

- Councilor Vardy
- Councilor Freight
- Councilor Frank
- Councilor Bye
- Paul (Staff)
- Victoria (Staff)
- Stefan Jeternovich (Hemson Consulting)
- Mike Collins Williams (West End Homebuilders Association)
- Chuck McShane (Niagara Home Builders Association)