Creating Jobs Through Remediating and Redeveloping Brownfields
IT IS THEREFORE RESOLVED THAT the AUMA call on the Government of Alberta to immediately implement all recommendations from the 2011 Brownfield Redevelopment Working Group. The first priority is to provide financial incentives to support municipalities in conducting environmental site assessments.
FURTHER BE IT RESOLVED THAT the AUMA ask the Government of Alberta create a red tape reduction task force making recommendations on removing barriers for local government and the private sector to discover, investigate, remediate, and redevelop brownfields.
FURTHER BE IT RESOLVED THAT the AUMA advocate the Government of Alberta develop a policy to manage old reclamation certificates deemed null and void and re-define the Orphan Well Association mandate to support legacy sites.
FURTHER BE IT RESOLVED THAT the AUMA call for a provincial brownfield tax incentive program that matches the province’s education tax with municipal property tax to encourage eligible property owners to clean up brownfield properties.
WHEREAS the Alberta government has not provided support and funding to local governments to remediate brownfields;
WHEREAS the current process to discover, investigate, remediate, and redevelop brownfields is onerous, costly, and frustrating for local governments and does not encourage and incentivize the private sector to redevelop brownfields;
WHEREAS Alberta’s Municipal Government Act enables local government to cancel, defer, or reduce the municipal taxes on brownfields through a property tax bylaw. However, the province portion of education taxes remain on property; and
WHEREAS Legislation and regulations for remediation and reclamation changes over time. Old reclamation certificates are deemed null and void because they do not meet the current requirements. The change of standards creates significant barriers for brownfield redevelopment.
More than 1,700 brownfields sit abandoned on main streets and in neighbourhoods in almost every municipality across Alberta. The cost to remediate brownfields is quite onerous, often costing more than the property's value, resulting in private property owners choosing to leave brownfields vacant/dormant to avoid these costs, leaving brownfields and contaminated sites a detriment to business development, community growth and aesthetics in many communities.
At a time of economic uncertainty and increased concern about the state of the environment and our economy, brownfield redevelopment provides a business opportunity for Alberta. Municipalities, the province, and the private sector need to collaborate on solutions that promote economic development, protect the environment, and improve Alberta's reputation as a responsible steward of natural resources.
In 2011, Alberta Environment and Parks (AEP) established a working group to identify required actions to encourage brownfield redevelopment. AUMA participated in this working group along with Municipal Affairs, the Cities of Edmonton and Calgary, Rural Municipalities of Alberta, the Federation of Canadian Municipalities, and industry stakeholders such as the Canadian Fuels Association and BILD. The group's final report, which included recommendations relating to financial tools, liability closure and educational programs, was submitted to responsible Ministers in April 2012.
Since the final report, AEP has implemented several recommendations but not all of them. A successful example coming from the report is enabling Municipal Government Act (MGA) to grant municipalities to offer multi-year property tax exemptions for brownfields. However, the province’s education tax portion remains despite that municipal property tax exemption, and municipalities will continue to collect the education tax on behalf of the provincial government.
The provincial government also has not enacted several important recommendations, including, recommendations on providing financial offsets to support local governments for environmental site assessment or financial incentive for the private sector to redevelop brownfields.
Financial incentive and support are especially important for smaller rural communities, who do not have the knowledge, engineering expertise and resources to investigate, reclaim and reuse contaminated sites. An example of this is Calmar, a small rural community home to 2,300 people, 100 local businesses and a robust oil and gas industry. There are 13 oil sites defined as legacy sites in Calmar. Many of the recertified sites have certificates from the 1950s-1970s, which according to the Alberta Energy Regulator, these certificates are not valid today.
Calmar has been working with a business looking to relocate to the town. According to the business plan, the company plans to relocate and create upwards of 300 jobs and several of their subsidiary companies to the community. The business is experiencing challenges through this process because the land it is interested in has six legacy oil well sites. This parcel of land has direct access to highway and rail, and it is suitable for highway commercial and light industrial development.
Many years ago, these six oil wells were abandoned, and the property eventually went into receivership due to tax forfeiture for years. Through exhausting and frustrating two- year-long research, it was discovered that three of six oil sites are in the final remediation phase. The other three have unknown liabilities, and they would require a Phase 1 and 2 Environmental Site Assessment. The estimated cost of both assessments is approximately $25,000 - $50,000 per site not including reclamation costs. An amount that many communities cannot afford.
Alberta needs a better system to allow local governments and businesses to discover, investigate, remediate, and redevelop brownfields, and we need the provincial government to be a partner in this. Brownfields are barriers to job creation, local investment, tax revenue generation, sustainability of communities, and entrepreneurs to start new businesses. Today's regulatory system is burdensome, red-tape-ridden, slow and confusing. Streamlining the system is equally important as having financial incentives for local government and businesses to redevelop brownfields. Reclaim brownfields are more than just about protecting our environment. It is also about job creation and viability of our communities.
As noted, this resolution builds on Alberta Municipalities' previous work and advocacy on brownfield redevelopment, further background can be found on its Brownfield Redevelopment Hub. Alberta Municipalities will pursue implementation of its recommendations within the context of our red tape reduction, economic development and assessment and taxation related initiatives.