Section 37 of the Planning Act allows developers to exceed some zoning regulations in return for cash or in-kind benefits. Benefits or cash are negotiated between a developer and local city councillor.
Bercy Park, costing about $8-million, was partially paid for with Section 37 funds thus allowing developers to exceed height and density zoning regulations.
Since the early 1980s Section 37 money has been used to pay for community centres, playgrounds, splash pads, and even affordable housing. In each case money has been required to be spent in the same ward as the development making the payment. Funds are intended to compensate for the local impact of allowing developments that fail to comply with height and density zoning regulations.
Concentration of high-rise tower development is primarily in four city wards. Totals for areas receiving the largest amount of Section 37 funding as of May 2018:
- Ward 27, Toronto Centre – Rosedale, has received $89 million (includes the former Ward 28, where Bercy Park is located)
- Ward 20, Trinity-Spadina, has received $34 million
- Ward 23, Willowdale, has received $24.4 million
- Ward 22, St. Paul, has received $17.9 million
Three of these top four wards are downtown.
Section 37 has given locally elected councillors considerable and unintended control over local development with no accountability or oversight. There are few guidelines or restrictions on what these funds can be spent on. Some feel there is a lack of transparency around how these agreements are made, amounts calculated and funds used.
Developers are also required to provide parkland, or cash to pay for parks, under Section 42 of the Planning Act.