Alberta developers and builders concerned with city charters

Calgary and Edmonton have yet to write up city charters, but already developers are concerned about how much power Alberta's two major cities will receive. A charter could result in new taxes, fees and rules for both business and individuals.

The mayors of Calgary and Edmonton have pushed for a charter in order to generate more revenue. The charters are currently being written up.

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For many years, Alberta's two biggest cities have wanted to operate under new rules, different from the ones under which every community in Alberta currently must follow. 

Will we end up with new revenue sources? I can't say for certain because I don't know.- Brenda King, City of Calgary

Developers in both Calgary and Edmonton are wary of what is to come. They fear the two cities will use the charters to tap the construction and development industry for more money.

"Of course there could be additional fees and levies that we might end up paying and that's really our concern going forward," says Guy Huntingford, CEO of Calgary's Urban Development Institute, which represents nearly 200 members of the development industry.

Municipalities already charge developers off-site levies to help pay for infrastructure such as roads, water and sewer pipes that connect the development site or subdivision.

Industry is also concerned about more red tape. Specifically, the approval process for development permits could include additional rules and thus, take more time to complete.

What exactly will be included in each city's charter is unknown. Developers want transparency because they feel the two cities are writing up their charters behind closed doors.

"From business and industry's standpoint, that has been a concern and we've expressed that to the city," said Huntingford.

The Alberta government recently passed Bill 20, which specifies that before a charter is introduced or changed, it must be published on the government's web site for at least 60 days. Cities also need to hold public hearings when introducing new bylaws.

Municipal affairs minister Diana McQueen admitted in the legislature on March 23 that her department was hearing complaints. "Specifically, we heard concerns about the transparency of the development of charters and the ability for municipal bylaws in a charter to take precedence over other provincial enactments."

Industry says that doesn't go far enough.

"We're still not sure if that is sufficient," says Huntingford. "We're concerned that is a very short period of time for not only fair and reasonable public consultation, but also intervention if necessary."

Calgary city officials say the process to create a charter has has only recently begun and there will be consultation with industry and the public. So far, officials say they have only discussed policy areas such as energy and transportation, and will only talk about potential new taxes and fees in early 2016.

"Will we end up with new revenue sources? I can't say for certain because I don't know," says Brenda King, manager of corporate strategy. "We're not even having those conversations yet."

Officials describe the charter as a way of sorting out responsibilities between the city and the province and figuring out how to best provide services. 

Inclusionary zoning

Some industry members believe city officials in Calgary could be interested in introducing inclusionary zoning. That's when a city makes it mandatory for private developers to provide a portion of affordable housing within their projects. For example, a developer with a 100 home subdivision might have to make 10 of those units affordable housing.

It's a different approach from the current practice of governments paying money to subsidize projects for affordable housing. Vancouver is one of the Canadian cities already implementing the practice.

"It's proven to raise the cost of all housing, not just in that unit," says Jim Rivait, CEO of the Canadian Home Builders' Association in Alberta. "Before you know it, you have more people needing assistance to get into housing because it does raise the price."

Since Toronto passed its own charter in 2007, the city has introduced a city land transfer tax and a personal vehicle tax. The vehicle tax was later rescinded. It considered other taxes, including on alcohol sales.

Details of the Calgary and Edmonton city charters are expected to be worked out by spring 2016.