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Education Minister Liz Sandals said the changes to the regulation will level the playing field, and boards will still have first dibs on properties.Frank Gunn/The Canadian Press

Ontario school boards wanting to buy properties from other boards will be forced to pay as much as private developers do in some areas under new provincial rules that are causing divisions in the education sector.

The Globe and Mail has learned that a change to a regulation will be brought in on Friday that will make a big difference to boards in places where public land is scarce, such as Toronto and Ottawa, and to a lesser extent Hamilton, London and Kitchener-Waterloo.

Boards, mainly Catholic and French, in these areas have been paying a heavily discounted rate to buy land from another board. The change, which will take effect in September, means they may no longer be able to afford the properties, which could give greater access to public, often green, space to private developers.

"It's obviously not a good thing for our school board," said Jean-François L'Heureux, the chair of the Conseil Scolaire Viamonde, Toronto's French-language school board. "This was protecting us ... but the bigger thing here is, why should taxpayers pay twice for the same building?"

The quickly expanding French board needs four or five new pieces of land in the GTA, he said.

The Toronto Catholic District School Board also wants to move and expand several of its schools, including some near railroads or highways, said Angelo Sangiorgio, the board's associate director of planning and facilities.

"What it's going to do is it's going to drive up the cost of board-to-board purchases," he said. "There are school sites that we would be interested in that are better than the ones that we have, including the buildings, that are going to be out of reach."

But Carla Kisko, the Toronto District School Board's associate director of finance and operations, dismissed the charge that it would make public property unattainable, saying the Catholic board has money in reserves for acquiring land.

"They're very keen on buying what they can because there is no availability of open green spaces," Ms. Kisko said.

The TDSB is under pressure to sell schools to raise funds for its repair backlog, which stands at $3-billion.

Under the current regulation, school boards must offer properties deemed surplus to other boards for whichever price is lower: fair market value, or a rate calculated using a formula based on school capacity and square metres (known as the replacement value). The intent is to keep the assets in public hands, but it also means a loss of revenue for the seller board.

In Toronto, with its sky-high real-estate prices, properties are being sold in some cases for a half or a third of their market value to French and Catholic school boards.

The government currently sets aside $60-million a year to help with school land purchases, and will now add $30-million. Boards use their own funds to buy schools, but if they do not have enough, the government will cover the shortfall when possible. It is unclear how far the province's money will stretch now that Catholic and French boards have to pay fair market value.

Mr. Sangiorgio said the Catholic board is able to draw on funds levied from developers when they build new projects. But that money can be used in only some areas of the Greater Toronto Area, he said. Recently, when the Catholic board needed to expand a school in Scarborough, those developer funds were not available, so the province paid for the $16-million new lot, bought from a private owner.

Michael Barrett, president of the Ontario Public School Boards' Association, said the province is putting pressure on several other public boards to sell underused properties. His organization lobbied for the changes to the regulation, arguing that the extra money was needed to fix schools.

"What was occurring is sometimes [other school boards] could be given that property for nothing," Mr. Barrett said. "It made sense for us to have fair market value so that the host board has an opportunity to recoup those funds."

Education Minister Liz Sandals said the changes to the regulation will level the playing field, and boards will still have first dibs on properties. The current system "serves as a disincentive to selling to other boards" in urban areas, Ms. Sandals said in a statement.

Ms. Kisko said sellers had been trying to avoid school-to-school sales.

"This does makes it more attractive for boards to question their assets and determine, really truly, what they need to do as a next step," she said.