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Albion Rd. is the road curving through the photo as seen looking south. View of Ontario as seen from a Super King Air 350 on a flight back from northern Ontario July 17 2013.

Fred Lum/The Globe and Mail

Ontario's environment watchdog is calling on the government to stop "penalizing" public transit through a development fee regime that favours funding new roads.

In cities and towns across the province, developers pay fees to the local council to fund infrastructure. If municipalities want to use this money to extend public transit to new developments, that transit can only run at current service levels elsewhere in the city. As a result, environmental commissioner Gord Miller said, development fees cannot be used to build better transit, only to maintain the status quo.

What's more, municipalities get less development money for transit than they do for building roads.

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Mr. Miller said this practice must stop.

"The current development charge policy interferes with transit growth," he said Tuesday at Queen's Park. "A system that penalizes transit over roads so efficiently is not fair and not desirable."

He argued the rules are especially arcane at a time when the Ontario government ostensibly wants people to take transit more and drive less. In some cases – including the construction of the Spadina subway extension to York University – the province waived the rules, which Mr. Miller took as a tacit admission that they are not working.

"It seems to obviously be an obstruction," he said.

Municipal Affairs Minister Linda Jeffrey was non-committal when asked if she would make Mr. Miller's demand a reality. The entire development charge system is currently under review, she said, and she would consider Mr. Miller's report.

"It's time for a refresh [of development fee rules], so I welcome all advice and I look forward to reading the advice and see how it might influence future policies," she said.

Ms. Jeffrey suggested that the review would also hear from developers who want tighter rules around how municipalities spend their money.

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"I think the accountability and the transparency is something that the development community has brought to me as being an issue for them," she said. "How you collect the money and what you spend it on needs to be accountable and transparent."

Mr. Miller also said the province did little last year to help conserve energy, and that most of the work was done by municipalities instead.

He advised the government to change other cumbersome regulations that make it harder for local councils to undertake environmental initiatives. For instance, he said, Queen's Park should endorse the use of district heating so municipalities can more easily make developers build it.

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