A development charge background study by Hemson Consulting Ltd. predicts that Dufferin County's population will reach 66,019 by the year 2017, an increase of 10,626 from the present 55,393.

At the same time, the number of dwellings in the county is expected to grow by 4,852 units - to 25,036 from the present 20,184.

Interestingly, by 2017, the population in those same 20,184 homes will have declined to 50,755 - a drop of 4,638 persons.

But the study predicts that decline will be more than offset by 15,264 new faces in 4,638 new homes, for the net population increase of 10,626.

The population in new units "determines the need for additional facilities and provides the foundation for development of the growth-related capital forecast," says the Hemson study.

Even so, the charges must be set such that "growth" is not paying the capital costs of things that benefit the existing population. Nor may the municipality take advantage of the charges in such a way as to pay for increases in the historical per capita level of service.

Service levels are calculated on both quantitative and qualitative factors. Hemson describes the quantitative as the number and size of existing buildings, and qualitative as the actual dollar value of the space.

On the bases of the historical review and the population and employment projections, eligible capital costs are considered as being of a 76% value to the existing population, and 24% to the new.

(Historical data were based on Statistics Canada figures for 1998-2007 population, households and employment levels. Annual future estimates were based on Places to Grow: Growth Plan for the Greater Golden Horseshoe.)

The South Arterial Road (the southern Orangeville bypass) is a good example of how the development charges (DCs) actually apply. The capital cost of the roadway was about $14 million, of which Dufferin was responsible for half. The county was entitled to apply $1.7 million of its DC roads reserve, covering only a portion of the capital cost.

In its calculation of DCs, Hemson indicated the following eligible services: land ambulance; children's services; social housing; long term care; public health; public works, buildings and fleet; general government; and roads and related.

Non-residential (commercial/ industrial) growth does not place a burden on children's services, social housing and long-term care, and hence is partially exempt from DCs.

Industry, however, does require roads. Of a $6.07 per square metre DC for non-residential, $5.77 is designated for roads and related.

Residential growth, by comparison, stresses all services, and is assessed at $1,848 per unit. Interestingly, for county purposes, about half of that is for future roads.

When collected, the DC income must be set aside as a reserve for the specific purposes it is intended to cover. Under the 10- year-old Act (The Development Charges Act of 1997, which replaced the previous "lot levies") the municipality must account in finite detail how it applied the reserves. Lot levies had not been regulated in the same fashion.

The DCs are to cover only growth-related capital costs, to the extent only that the costs are incurred because of growth.

They are levied "on new development to recover the growth-related capital costs associated with meeting (the demands arising from growth) ... so that development continues to be serviced in a fiscally responsible manner," Hemson says.

DCs are generally due at the time a building permit is issued. In practice, this means that the developer pays the charge and, presumably, recovers from the ultimate purchaser. But in reality, speculative property sales are subject to fluctuations in the housing market.