WATERLOO REGION — The chair of the region’s finance committee says developers won Tuesday in a vote on development charges that could cost taxpayers millions.

“Those exemptions are certainly going to be picked up by taxpayers, and what happened yesterday, really, developers won and taxpayers lost,” Coun. Sean Strickland said.

Development charges are fees developers pay for growth. The developers pay the fees so it isn’t a charge to the municipalities.

The region reviewed its development charge bylaw after changes to provincial rules were made at the end of 2015. The region can now calculate the charges for future transit and use development charges for waste management — excluding landfills and incineration.

As part of the new bylaw, politicians opted to grant exemptions from transit and waste charges for developers in the city cores until Feb. 28, 2019. An existing exemption program for other development charges continues until 2019.

Staff recommended exempting transit and waste charges until Jan. 1, 2018, for Cambridge and Kitchener only.

That’s because the region matches cities’ development charge exemptions. Waterloo chose not to have a core exemption program but council also voted to include the city.

Now, the region will have to pay the development charges it would normally collect from developers for those projects because by law the charges must be paid. The cities will do the same.

Kitchener Mayor Berry Vrbanovic led the charge Tuesday on extending the exemptions.

“All three urban mayors felt equally strong on this issue, and the importance of it for downtown cores,” he said in response to Strickland’s comments.

Vrbanovic argued that not providing the exemption through to 2019 could harm projects already in the works, and said if those projects didn’t go ahead, the region would miss out on the development charges and increased property taxes.

“The reality is we want some momentum to continue in terms of new projects because those new projects generate tax revenue for the region which allows us to ultimately not have to put a higher burden on taxpayers,” he said.

Waterloo Mayor Dave Jaworsky said it’s good for the entire region when city cores thrive. He said council made the right decision.

“If we want our region to be strong, we need our city centres to be healthy, filled with jobs and people, not empty doughnut holes as you see in some other struggling areas, so for me it was very important that we continue to strengthen our urban cores,” he said.

In 2014, it cost the region $4.9 million to cover the fees related to the core exemption program. That’s about the equivalent of a one-per-cent regional tax increase.

In 2015, staff estimated the program would cost $11.1 million by 2019. That was not including exempting transit and waste development charges in cities.

“Where that is financed from, it’ll be a combination of user rates for sewer and water and from property tax money,” Regional Chair Ken Seiling said.

Council will have to craft a plan to cover the costs, he said.

Seiling supported exempting transit and waste charges in all three cities until 2018, but said 2019 extended it too far.

“I felt one year was more than sufficient based on what I heard from some developers, and I don’t think we had any concrete evidence from developers any development was at risk,” he said.

One of the main goals of the region’s rapid transit project was to encourage intensification in city cores.

Some councillors argued developers are benefitting most from the system because the project is spurring interest in those projects and property values are rising.

“We’re asking other development and taxpayers to pay for it so the people that are benefitting most are getting the greatest benefit … I just think it’s poor public policy,” Strickland said.

Here’s how councillors voted:

To exempt cores to 2019:

Yes: Wilmot Mayor Les Armstrong, North Dumfries Mayor Sue Foxton, Waterloo Mayor Dave Jaworsky, Coun. Helen Jowett, Coun. Karl Kiefer, Coun. Jane Mitchell, Wellesley Mayor Joe Nowak, Coun. Karen Redman, Woolwich Mayor Sandy Shantz, and Kitchener Mayor Berry Vrbanovic.

No: Coun. Elizabeth Clarke, Coun. Tom Galloway, Coun. Geoff Lorentz, Regional Chair Ken Seiling, and Coun. Sean Strickland.

To include Waterloo: Unanimous.

Cambridge Mayor Doug Craig was absent.