Ottawa's Build Communities Strong Fund is making $51 billion available over the next 10 years and $3 billion annually after that. But the federal funding boost comes with conditions that include slashing off-site levies, which provide capital municipalities drawn on to expand critical infrastructure needed for housing growth.-NEWS FILE PHOTO
zmason@medicinehatnews.com
Alberta Municipalities is concerned that the federal government infrastructure revitalization program unveiled in Budget 2025 won’t be effective in Alberta.
The Build Communities Strong Fund will invest $51 billion over 10 years to support infrastructure projects like hospitals, universities, roads, water systems and transit across the country in an effort to stimulate housing construction.
Alberta Municipalities, an association representing 264 municipalities across the province including Medicine Hat, argues that the program as proposed would undermine the infrastructure that enables new housing in Alberta.
The BCSF requires supported municipalities to reduce development charges – called “offsite levies” in Alberta – in order to qualify for funding.
When new areas of a city are developed, new off-site infrastructure is required to support them, including roads, water and sewer mains, and municipal facilities. Off-site levies are a tool used by cities to help pay for the construction of that infrastructure and facilitate growth.
Off-site levies relocate some of that cost off taxpayers and back on to the developers.
President of Alberta Municipalities Dylan Bressey says the revenues from off-site levies are restricted in this province.
“I just think the really important thing for people to understand is these off-site levies aren’t used for general revenue in Alberta. They truly are going towards the roads and pipes that new housing developments require,” he said in an interview with the News on Wednesday.
In Medicine Hat, the city plans, constructs and pays for off-site infrastructure upfront and recovers a portion of those costs from the developer using off-site levies. Private developers are currently on the hook for levies on infrastructure like major roadways, water lines, sanitary sewers and storm sewers.
If the city wanted to apply for funding under the BCSF, it would need to reduce these charges in order to qualify.
Bressey said those costs will end up back on the taxpayer.
He says the province is leading the country in housing starts, and while the reduction of development fees may improve housing affordability in other provinces, he fears it could slow the pace of development here in Alberta.
“If we tell municipalities they can no longer use the fiscal tools available to them to fund new pipes and roads, they’re not going to be able to support more housing growth here in Alberta.”
The condition was designed, he says, to address parts of the country where off-site levies are imposing fees that reach six figures and obstructing the ability for housing developers to turn a profit.
“That’s not happening here in Alberta,” said Bressey.
Bressey says developments are profitable in Alberta even before the fees are slashed.
“We really think it’s important for us to be given support, not direction, because what’s needed in every community truly is different, and the people who are best able to figure out the best way to finance growth in their community is the local councillors who are living it every day.”
Despite the considerable pace of housing starts in the province, Bressey says with a rising population, there is still demand for more, and the federal funding would go a long way.
Bressey says Alberta Municipalities is engaged with a dialogue with the federal government. The association sent a letter to Ottawa along with other provincial and municipal associations in Western Canada, and it’s been in communication with the minister’s office.
Bressey urged the government to consider altering the program to enable BCSF dollars to reach municipalities in Alberta without imposing mandatory reductions to off-site levies.
As the City of Medicine Hat is currently in the process of updating its off-site levy bylaw, officials declined comment on the federal program, but reiterated a general support for the Alberta Municipalities’ statement.
