A Community Improvement Plan (CIP) is an optional municipal planning tool outlined in Section 28 of Ontario’s Planning Act that enables a municipality to provide subsidies in the form of tax assistance, grants or loans to business owners, land owners and tenants within a specifically defined Community Improvement Project Area (CIPA) to incentivize and stimulate land and building development or redevelopment. The CIPA can include the whole municipality.
“community improvement” means the planning or replanning, design or redesign, resubdivision, clearance, development or redevelopment, construction, reconstruction and rehabilitation, improvement of energy efficiency, or any of them, of a community improvement project area, and the provision of such residential, commercial, industrial, public, recreational, institutional, religious, charitable or other uses, buildings, structures, works, improvements or facilities, or spaces therefor, as may be appropriate or necessary; (“améliorations communautaires”)
“community improvement project area” means a municipality or an area within a municipality, the community improvement of which in the opinion of the council is desirable because of age, dilapidation, overcrowding, faulty arrangement, unsuitability of buildings or for any other environmental, social or community economic development reason.
“community improvement plan” means a plan for the community improvement of a community improvement project area;
Section 28 of the Planning Act
Many municipalities across Ontario have prepared CIPs to achieve community goals:
- Beautification of downtown areas with facade and signage improvements
- Assisting property owners with repair, rehabilitation, and redevelopment projects
- Increase the supply of affordable and/or rental housing units
- Remediate and redevelop brownfield (former industrial or commercial) sites
Funding tools
For the purpose of carrying out a municipality’s community improvement plan that has come into effect, the municipality may make grants or loans, in conformity with the community improvement plan, to registered owners, assessed owners and tenants of lands and buildings within the community improvement project area, and to any person to whom such an owner or tenant has assigned the right to receive a grant or loan, to pay for the whole or any part of the eligible costs of the community improvement plan.
Section 28 (7) of the Planning Act
Tax Increment Equivalent Rebates (TIER)
Tax increment is the difference in property tax owed over the established “base” tax level when the value of a property increases.
Refund the owner a portion of their property taxes equal to the increase resulting from the increase in their property value created by redevelopment for a period of time – typically 10 years. The municipality does not pay any money to the developer or homeowner, but simply foregoes a portion of their property taxes, reducing municipal revenues.
- Up to 50% of the municipal portion of the incremental tax increase or total remediation costs, whichever is less.
- Municipal portion of tax increases which occur as a result of the development of affordable rental unit(s) for 10 years.
Incentive example
The annual municipal tax bill for an undeveloped, contaminated Brownfield property was $13,974, but after remediation and construction, the estimated taxes are $402,257. The total eligible costs to remediate of the property were $473,521.
Using the current tax increment equivalent grant program to fund the eligible costs and incentivize the applicant to remediate and redevelop the property, the City will gain an annual municipal tax increment of approximately $388,283.
There is an expense to recommit part of the initial tax revenue for the property back to the applicant to cover the eligible costs for the project, the increased taxes achieved here may not have been realized without the incentive.
Taxes and fees
- Building permit fees – one-time fees paid by property owners to municipalities to cover the costs of reviewing a project and making sure it meets the Building Code.
- Property taxes – annual tax paid by property owners to municipalities to cover the cost of local programs and services
- Tax increment – difference between the property tax owing
- Development charges – one-time fees paid by developers to municipalities on new units built used to fund infrastructure/services needed to support new growth.
Funding mechanisms
- Reduction – percentage discount on the usual fee or tax.
- Rebate – reimbursing incurred expenses on eligible costs up to a maximum.
- Deferral – extending the payment deadline of a fee or tax.
- Cancellation – applicant does not have to pay for something that they would otherwise pay.
Example programs
CIP initiatives can include affordable housing
Affordable housing
(1.1) Without limiting the generality of the definition of “community improvement” in subsection (1), for greater certainty, it includes the provision of affordable housing.
Section 28 of the Planning Act
Housing and accessibility
- Accessory Dwelling Units – Intended to encourage additional dwelling units (e.g., a second suite basement apartment) that are accessory to a single detached dwelling, semi-detached dwelling, and duplex or townhouse dwelling.
- Building and property renovation – Forgivable loan to encourage the significant renovation of existing commercial and mixed-use buildings in the CIP Priority Area, including upper-floor conversions. This loan may cover 50% up to $25,000 per project, forgivable over five years at an annual rate of 20%.
- Building accessibility improvement – A grant to assist property owners with the financing of accessibility improvements to ground floor or upper storey units. Eligible costs can be covered 50% up to $5,000 per project. Upgrades or improvements to improve barrier-free accessibility or code compliance / performance. These improvements are often necessary where buildings were constructed prior to modern code / accessibility requirements for a given use, wherein upgrades can be costly and even present barriers to revitalizing a building/establishing a business.
Downtown beautification
- Façade and signage improvement – A grant to support aesthetic improvements to the facade and signage of commercial properties in the CIP Priority Area. The Facade Incentive may cover 50% of eligible costs up to a total of $12,500 OR $17,500 for properties with more than one facade. The Signage incentive may cover 50% of eligible signage costs up to $2,500 per property.
- Planning fees and building permits grant – A grant to reduce the cost of eligible Building and Planning Fees. Eligible Planning Fees including Zoning By-law Amendments, Site Plan Approval, Minor Variance, Application for Consent, Part Lot Control Exemption and Subdivision/Condominium Agreement may covered 50% up to $3,000 per property. Building Permit Fees can be covered 50% up to $7,000 per property.
Business creation and expansion
- Business Development Grant Program – Grant equivalent up to 100 percent of the municipal property tax increase created by the project for up to 10 years after project completion. Project must create a minimum of 50 new jobs within the manufacturing sector or more than 20 jobs within any other targeted sector(s).
- Business Retention and Expansion Grant Program – Grant equivalent up to 100 percent of the municipal property tax increase created by the project for up to 10 years after project completion. Project must create or retain a minimum of 50 jobs within the manufacturing sector or create more than 20 jobs or retain a minimum of 35 jobs within any other targeted sector(s).
- Small Business Investment Grant Program – Grant equivalent up to 100 percent of the municipal property tax increase created by the project for up to 10 years after project completion. Business must have less than 50 employees, if in the manufacturing sector, or less than 20 in any other targeted sector(s). Investment must result in a minimum increase of $25,000 in assessed property value.
- Agri-Tourism Grant – Intended to encourage agricultural property owners and tenants to diversify their on-farm offerings and expand into new markets to support the establishment and / or improvement of value- added agricultural businesses, agri-tourism operations, recreational tourism, and related home-based businesses outside of more ‘traditional’ CIP areas. Not intended to fund general ag-uses; livestock operations, dairy farms, horticulture, etc.). Subject to the Council’s approval, the recommended Agri-Tourism Grant would provide up to 50% of the eligible project costs up to a maximum grant of $10,000.
Brownfield remediation
- Brownfield’s Tax Assistance Program – Offers the cancellation of Municipality property taxes for up to three years on a property that needs an environmental site assessment and environmental remediation in order to redevelop the property. For example, up to 50% of the municipal portion of the incremental tax increase or total remediation costs, whichever is less.
- Brownfield Environmental Site Assessment Rebate – Redevlopments requiring a Phase II Environmental Site Assessment are eligible to receive a rebate for fees associated with that Phase II E.S.A. of up to $25,000 per study or 50% of the cost of the E.S.A., whichever is less.
Common programs
Subsidies for property and business owners in downtowns:
- Facade improvements
- Signage
- Accessory dwelling units
Benefits
- Recognized municipal tool (legislative framework under the Ontario Planning Act).
- Long-term stability (embedded in Official Plan/renewed over time).
- Supports physical improvement projects such as façades, accessibility and redevelopment that enhance community aesthetics and tourism appeal.
- Public accountability/decisions made through Council processes with open reporting.
- Aligns with planning and downtown revitalization goals.
Drawbacks
- Less flexibility to making changes to funding program
- Administrative complexity (requires bylaw adoption, public consultation and ongoing City administration).
- Slow to implement or amend (changes require formal Council approval and notice periods).
- Funding tied to municipal levy or reserves, not self-sustaining revenue sources.
Governance
- Quinte West – applications are considered by the Review and Evaluation Committee.
- Belleville – City staff in the Engineering and Development Services Department review the applications, with all final grant decisions subject to the approval of Mayor and City Council.
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