Alberta Municipalities ask feds not to impose reductions to off-site levies in housing grant fund

A construction worker works on a house in a new housing development in Oakville, Ont., Friday, April 29. 2011. THE CANADIAN PRESS/Richard Buchan

A group representing 264 municipalities in Alberta is raising concerns about a federal grant that they say could shift costs of development to local tax payers by reducing off-site levies.

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“The federal government’s ‘one-size-fits-all’ approach risks undermining the very infrastructure that enables new housing in Alberta,” said a statement from Alberta Municipalities (ABmunis) on Jan. 2. “Our members use off-site levies responsibly and transparently to ensure growth pays for growth.”

The federal funding in question is the Build Communities Strong Fund (BCSF) and its provincial/territorial funding stream used to build more homes across the country.

“To build homes faster we need to come together as Team Canada,” said a statement from the Housing, Infrastructure and Communities Canada (HICC). “Across the country, we need systems with less red tape, with barriers removed, and that incentivize construction so that homes can get built.”

The provincial and territorial stream of the fund aims to reduce the impact of development charges, known in Alberta as off-site levies, through agreements with provinces and territories.

An off-site levy regime allows a municipality to recover capital costs of certain types of municipal infrastructure based on the degree of benefit the development will receive from the infrastructure. It is often used as a cost-recovery tool for a municipality in constructing new or expanded infrastructure.

“We believe that the BCSF will address housing affordability in other provinces but won’t effectively be deployed in Alberta,” said ABmunis. “This means Albertans could miss out on considerable amounts of much-needed federal government funding.”

ABmunis made several suggestions to Ottawa:

• provide BCSF dollars to municipalities in Alberta without imposing mandatory reductions to development charges/off-site levies or other prescriptive conditions;
• recognize Alberta’s proven offsite levy regime and municipalities’ autonomous decision-making powers;
• prioritize water and wastewater systems, public transit, and recreation facilities that unlock housing supply and improve livability throughout Alberta;
• ensure BCSF allocations reflect Alberta’s rapid growth and the need to keep pace with housing demand; and
• ensure BCSF allocations are delivered efficiently via predictable channels.

HICC said it is listening to feedback from partners and stakeholders, with a view of launching a program reflecting the different realities of municipalities across the country.

“Federal actions on development charges will complement other measures to support housing supply and affordability, including investment in the construction of large-scale affordable housing projects through Build Canada Homes,” said HICC.

Alberta’s ministry of municipal affairs said it is always open to working with Ottawa to build infrastructure to support the housing supply “while respecting municipal and provincial autonomy and fiscal sustainability.

“Alberta Municipal Affairs recognizes municipalities’ legitimate concerns about conditions tied to off-site levies, which play a key role in ensuring growth pays for growth and protecting local taxpayers,” said the ministry in a statement.

On top of the $17.2 billion in federal infrastructure funding over the next decade through the provincial/territorial stream, the BCSF’s direct delivery stream will provide $6 billion to support regionally significant projects, large building retrofits, climate adaptation and community infrastructure. The community stream will provide $27.8 billion directly to municipalities for local roads, bridges, water systems and community centres.