The Nova Scotia government says it will not stand in the way of Halifax’s hopes to increase development fees, a move councillors say is needed to help pay for the city’s rapid growth.
On Tuesday, Halifax council agreed to have municipal staff ask the provincial government to consider increasing the city’s development-related fees, which have been frozen since 2023.
If the province agreed, staff would come back to council with a report recommending options for possible increases to those fees.
“We set our fees at a time when Halifax was not growing at all, and we’re just in a totally different context now,” said Coun. Laura White, who made the initial motion.
A note from Halifax staff examined how the city’s current fee structure stacks up against the rest of the country.
While it is difficult to directly compare cities with various fee structures, a 2024 study from the Canadian Homebuilders’ Association said Halifax fees were only $4,400 per unit for high-rise developments — far below the national average of $35,000.
That put Halifax as the second-lowest in Canada for that category, cheaper than Charlottetown and St. John’s.
Halifax fees were about $30,500 per unit for low-rise development, less than half the national average of $82,600.
“There’s plenty of room to move here,” said Coun. Kathryn Morse.
“I’m just really concerned that we’re missing out on the housing boom that’s happening. We could have an increase in fees that would really help us with our budget.”
Deputy Mayor Patty Cuttell said it is obvious that the city’s current system is not working, and growth does not pay for growth.
Property tax revenue from new buildings only brought in about $9 million for this year’s upcoming budget, Cuttell said, while the current development fees do not even cover the cost to process new development applications.
“The cost of development should be paid for by the people who are capitalizing on that effort,” Cuttell said.
The fees were frozen in 2023 by the provincial government, and extended again until November 2026 as a condition under Nova Scotia’s multi-million agreement through the Canada Housing Infrastructure Fund.
On Wednesday, Municipal Affairs Minister John A. Macdonald was asked if the province planned to extend the freeze again.
“Not at this time,” MacDonald said.
Coun. Shawn Cleary said any changes to the fees would be done thoughtfully and in consultation with the housing industry
“So that we can more appropriately and justifiably increase, so that growth starts to pay for growth,” Cleary said.
Mayor Andy Fillmore was the only vote against the motion.
Some of the current fees which have been frozen include Halifax Water’s regional development charge and municipal solid waste charges.
The Halifax staff note said creating a regional development charge like many other cities — which could help pay for libraries, fire and transit services needed to support new development — could generate millions of dollars a year.
Council also directed Halifax staff to ask the province to change legislation that would require Nova Scotia Power to pay property tax on its properties within Halifax.
Morse said the $6.5-million annual grant the utility pays Halifax in lieu of taxes falls about $1.1 million below what it would pay under the city’s normal commercial property tax structure.
MacDonald said Wednesday that consultation with the Nova Scotia Federation of Municipalities would likely be needed on that kind of change, but as with anything brought up by municipalities, “we always look at it.”
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