Waterloo Region and Amazon developer reach agreement on $13.7M discount dispute

The Region of Waterloo and the developer behind an Amazon project have reached an agreement on a discount dispute. CTV’s Krista Simpson explains.

The Region of Waterloo has reached a settlement with the developer of Amazon’s fulfillment centre in Cambridge after the project was mistakenly given a $13.7 million discount.

The region said both parties agreed to resolve the matter to “avoid the costs of further litigation.”

As part of the agreement, the developer will pay more than 75 per cent of the $13,719,572 requested by the region.

“The region is pleased that the developer will pay the majority of the development charges,” Coun. Michael Harris, chair of the Region’s Strategic Planning and Budget Committee, said in a media release. “This is a good deal for residents and for the Region of Waterloo. It will ensure additional funding for major infrastructure, helping us achieve our strategic objectives as the region continues to grow.”

The region also withdrew its motion for leave to appeal with the Ontario Divisional Court.

“No doubt council was frustrated with the issue from the very beginning," Harris said in an interview with CTV News on Tuesday. "I would say we’re close to $18 million that the taxpayers will have recovered. Charges that will go to the much needed infrastructure investments that we need to make here.”

Harris said it is also likely council will take a closer look at the Development Charge discount involved in the case.

“We’re definitely going to be reviewing that DC [Development Charge] bylaw in the next little while. It’s definitely going to be on the radar to make sure that we are crystal clear if we’re to continue with that industrial discount it’s got to be abundantly clear that warehousing is not industrial use.”

History of the dispute

The discrepancy dated back to 2022.

The Region of Waterloo collects a development charge on new construction projects to help cover the costs of necessary infrastructure upgrades.

Warehouses, however, get a 60 per cent discount.

In July 2022, the developer was quoted $9,082,948.59 in development charges for the property at 140 Old Mill Road in Blair. That amount was paid to the region on Aug. 18, 2022.

The region later claimed they were not aware an Amazon fulfillment centre would be built there at the time the discounted rate was calculated. They also told the Ontario Land Tribunal it did not qualify as an “industrial building” as defined in the regional bylaw.

A Notice of Re-assessment for the additional $13,719,572 was sent out on Nov. 8, 2022.

In response, the developer went to the Ontario Land Tribunal. They argued they should not have to pay the extra money as the development charge had already been assessed, issued and paid, and the building permit was approved.

The tribunal ended up siding with the developer.

“The tribunal finds the [Development Charge Act] or the [Development Charge] Bylaw does not permit a municipality to impose an additional development charge, or a corrected amount, after a development charge has already been assessed, collected, and certified, and a building permit issued for the development,” they stated in their decision.