Community Building – Offsite Levies and Shared Benefits
UPDATE-August 19/’24-BOWDA standing is confirmed by the Land & Property Rights Tribunal (LPRT)
Read the full decision:
A common question we often hear is - WHAT IS AN OFFSITE LEVY?
Offsite Levies (OSL) are development charges levied by municipalities on new developments which help fund key infrastructure for water, sanitary sewer, roads and stormwater and from fire halls to libraries. OSLs assist in funding what both new and existing residents expect to be in place over time. Frequently, both new and existing residents use and receive benefit from this new infrastructure on a daily basis. OSLs are generally associated with, and driven by, the growth of the community.
An important requirement associate with OSLs is transparency in how benefits and costs are shared between new residents, new businesses and existing infrastructure users. In 2017, the Province of Alberta updated legislation regarding offsite levies requiring that municipalities cannot compel new residents and businesses, through developers, to contribute to infrastructure beyond their proportional benefit. The update stipulated that there must be clear a correlation between OSLs and benefits to new development. This update in 2017, after years of review and consultation, was enacted as prior legislation utilizing a methodology where the allocation of costs were, more often than not, disconnected from shared benefit and shared costs, resulting in a disproportionate share of costs are being downloaded onto new buyers, thereby layering on of additional costs, inflating pricing and impacting affordability.
This is why it is important to clearly identify “shared benefit” to fairly allocated shared costs. Shared benefit and costs are commonly determined by measures like the spilt between existing population and new population, or the number of homes/businesses that benefit from new infrastructure, with the costs split proportionally on that basis. In some circumstances, there is infrastructure that only benefits new users, such as a key road or larger watermain into a new area where none currently exists; accordingly, new users pay for the entirety that infrastructure.
Frequently though, there can be new infrastructure that provides benefits to both new and existing users. An upgraded or additional waterline can provide improved fire flow and/or more reliable service or redundancy to existing users, while adding capacity for new users - an example of shared benefits where shared costs need to be addressed.
It is important that the methodology associated with determining shared benefit is fair and transparent with a direct correlation to benefitting parties, where the allocation of shared costs flows accordingly. This is a requirement of the Alberta’s legislation contained within the Municipal Government Act and associated Off-Site Levies Regulations.
The Bow Valley Builders and Developers Association (BOWDA) recognizes that infrastructure projects are critical to the planned and expected growth of our communities; we support transparency and fairly determined shared benefits and shared costs based on the actual use by users (and not age) of that infrastructure.
A good OSL outcome is an important part of the provision of housing, including affordable housing, as well as building resilience into our community infrastructure for unexpected service disruptions and major events.
The graphic below demonstrates the pieces needed for a good OSL outcome expressed as a bylaw.
BOWDA is concerned that the current draft of the OSL Bylaw before Town of Canmore Council is not based on shared benefit (based on the benefit by users) which is required under the existing legislation. BOWDA believes that the proposed OSL Bylaw can be modified in a timely basis to ensure fairness for everyone involved.
We welcome the continued opportunity to work with the Town of Canmore to accomplish this as quickly as possible in order to provide clarity for existing residents and new neighbours to come.
At the end of the day, it’s about fairness and community building.
You can view a copy of Off-Site Bylaw Amendment 2024-01 here:
OSL Bylaw Passed Potentially Heading to Appeal
RMO - March 7, 2024
Off-site levy talks between Canmore, area developers remain contentious
RMO - February 29, 2024
Canmore proposed off-site levy potential legal battle between Town, developers
RMO - February 15, 2024