CITY OF GUELPH Brownfield Redevelopment CIP Update

Transcription

1 CITY OF GUELPH Brownfield Redevelopment CIP Update Progress Report #1 Background Report April 2010 SUBMITTED BY: RCI Consulting in association with Stantec Consulting Ltd.

2 Table of Contents Page 1.0 INTRODUCTION Purpose Report Content BROWNFIELD RELATED LEGISLATION, REGULATIONS AND POLICIES History and Context Ontario Regulation 153/ Source Water Protection Promoting Brownfield Redevelopment BACKGROUND POLICY REVIEW Brownfields Strategy Local Growth Management Strategy Official Plan Community Energy Plan Development Charges Study and By-law Employment Lands Strategy Urban Design Action Plan Secondary Plans Downtown Guelph CIP Summary of Recommendations CRITICAL NEEDS ANALYSIS Methodology Results 26 FIGURES 1 Record of Site Condition (RSC) Requirement for Change of Use 5 2 Revised Process for Filing an RSC 8 APPENDICES A Stakeholder Questionnaire 29 RCI Consulting in association with Stantec Consulting Ltd. i

3 1.0 INTRODUCTION 1.1 Purpose RCI Consulting in association with Stantec Consulting Ltd. was retained by the City of Guelph to undertake an update of the City s Brownfield Redevelopment CIP. The purpose of this report is to: a) Provide a review of brownfield related legislation, regulations and policies that impact the City s Brownfield Redevelopment CIP; b) Conduct a critical needs analysis to determine the key impediments to brownfield redevelopment in Guelph and the improvements to the Brownfield Redevelopment CIP required to address these critical needs; c) Act as a reference resource for City staff; and, d) Guide the preparation of future reports, including the Draft and Final Update to the City of Guelph Brownfield Redevelopment CIP. 1.2 Report Content The report is divided into four sections. Section 2.0 of the report provides a review of provincial brownfield related legislation, regulations and provincial policies that will help shape the update of the Brownfield Redevelopment CIP. Section 2.0 of the report also provides a brief description of the Federation of Canadian Municipalities (FCM) Green Municipal Funds available to assist communities with the assessment, cleanup and redevelopment of brownfields. Section 3.0 of the report presents a review of City policies, studies, plans and reports that set the municipal policy framework and direction for the review and update of the Brownfield Redevelopment CIP. Section 4.0 presents the results of the critical needs analysis done to identify key impediments to brownfield redevelopment in Guelph and identify required actions and revisions to the Brownfield Redevelopment Strategy and CIP needed to address these impediments. Section 4.0 includes the summary results of interviews with key stakeholders in the brownfield redevelopment industry and key staff involved in the administration of the Brownfield redevelopment CIP programs. RCI Consulting in association with Stantec Consulting Ltd. 1

4 2.0 BROWNFIELD RELATED LEGISLATION, REGULATIONS AND POLICIES In order to determine the key implications for the Guelph Brownfield Redevelopment CIP Update of provincial legislation, regulations and policies that govern both the regulation and promotion of brownfield redevelopment, it is important to understand the context of the history of brownfield related legislation and regulations. Therefore, Section 2.1 provides a summary of the history of key provincial legislation and regulations that regulate brownfield redevelopment and impact upon the ability of municipalities in Ontario to promote brownfield redevelopment. Section 2.2 focuses on the key regulatory aspects of provincial legislation and regulations in particular, the implications for the update of the Guelph Brownfield Redevelopment CIP of the most recent amendments to Ontario Regulation 153/04 (O. Reg 153/04). Section 2.3 highlights the impacts on source water protection of the Clean Water Act, Section 2.4 summarizes various pieces of legislation, provincial policies and federal initiatives that can be used by municipalities to promote the remediation and redevelopment of brownfield sites. 2.1 History and Context The Province of Ontario has introduced a number of legislative amendments (and associated regulations) since 2001 designed to promote brownfield redevelopment. In November of 2001, stand alone legislation known as the Brownfields Statute Law Amendment Act (BFSLAA) received Royal Assent. The purpose of the BFSLAA was to encourage the revitalization of contaminated land (brownfields) by way of limiting liability and providing financial assistance. The BFSLAA is a complex piece of legislation that amended several Provincial Acts, including the Environmental Protection Act (EPA), Municipal Act, Municipal Tax Sales Act, Planning Act, Pesticides Act, Ontario Water Resources Act and the Education Act. The BFSLAA was implemented in phases between 2002 and 2009 through the periodic passing of regulations by the Province. The first regulation (Ontario Regulation 298/02), passed on December 1, 2002, governs protected municipal actions under the EPA and changes to the Municipal Tax Sales Act and the Planning Act to make it easier for municipalities to deal with tax delinquent brownfield properties and provide grants and loans to promote brownfield redevelopment. Municipalities were provided with the option of vesting (taking ownership) of a property after it failed tax sale rather than the property automatically vesting with the municipalities after a failed tax sale, as was previously the case. Furthermore, municipalities were provide with the ability to enter into and conduct environmental investigations on failed tax sale properties prior to making a decision regarding vesting within a one year timeframe. Finally, a change to the Planning Act allowed municipalities to designate a community improvement project area and prepare community improvement plans on a municipality wide basis rather than for a sub-area. This enhanced the municipal ability to deal with brownfields no matter where located within the municipality or urban area. A second regulation (Ontario Regulation 153/04), known as the Record of Site Condition (RSC) regulation took effect under the EPA on October 1, This regulation provides limited regulatory protection to property owners, developers, lenders and receivers who file a RSC (voluntarily or if required by a change of property use) in the Environmental Site Registry. O. Reg 153/04 also: RCI Consulting in association with Stantec Consulting Ltd. 2

5 a) Established the soil and groundwater criteria contained in the MOE Guideline for Use at Contaminated Sites in Ontario as site condition standards; b) Defined the requirements for Phase I and Phase II Environmental Site Assessments (ESAs) and risk assessments; c) Defined three (3) approaches to site restoration (background, generic, risk assessment); d) Established the publicly accessible Environmental Site Registry; and defined the requirements for a Qualified Person (QP). Part IV of O. Reg 153/04 (Change of Property Use) governs the mandatory requirement for an RSC when there is a change to a sensitive land use. Part X of O. Reg 153/04 (Certificates of Property Use) governs the use of certificates that can be registered on title when a risk assessment is done. Both Parts IV and X of O. Reg 153/04 came into effect on October 1, A minor housekeeping amendment to O. Reg 153/04 (O. Reg 366/05) was filed in June of Under the BFSLAA, amendments were made to the Municipal Act, 2001 to allow municipalities to offer both municipal and education property tax assistance for environmental remediation costs on brownfield sites being remediated such that a RSC can be filed for the proposed use. The education property tax assistance component was announced in the 2004 Ontario Budget and is known as the Brownfields Financial Tax Incentive Program (BFTIP). The Province allocated up to $5 million annually in matching education property tax assistance. The Budget Measures Act, 2005 (No. 2), which received Royal Assent in December of 2005, streamlined and improved the BFTIP. In May of 2007, the Province passed the Budget Measures and Interim Appropriation Act, This Act clarified regulatory liability protection, introduced a new process for filing RSCs (subject to the passing of implementing regulations), provides municipalities with protection from inaccuracies in an RSC, and eliminates the option of addressing contamination by means of horizontal severances. In April of 2008, O. Reg 153/04 was amended to change the provisions in Part II, Section 5 that govern qualified persons who conduct or supervise environmental site assessments and who make certifications in RSCs filed to the Environmental Site Registry. The requirements for a qualified person were made more stringent and this amendment to O. Reg 153/04 took effect on October 1, The Ministry of Environment also introduced new proposed soil and groundwater standards in 2007 and the Ministry is currently reviewing comments received on the proposed new standards. Finally, O. Reg 511/09 was passed on December 29, O Reg 511/09 amended O. Reg 153/04 by introducing a number of key provisions, including: a) New definitions and required procedures for Phase I and Phase II ESAs; b) Strengthened soil and groundwater standards; c) Revised RSC filing process; d) Streamlined Risk Assessment; e) Complementary amendments; and f) Implementation and Transition. RCI Consulting in association with Stantec Consulting Ltd. 3

6 The key implications for the Update of the Guelph Brownfield Redevelopment CIP of these most recent amendments to O. Reg 153/04 are in Section 2.2 below. As well, the impact of the Clean Water Act on source water protection planning is discussed in Section 2.2 below. A number of other pieces of legislation have also resulted in legislative amendments designed to enhance the tools available to municipalities to promote brownfield redevelopment. For example, the Budget Measures Act, 2006 (No. 2), which received Royal Assent in December of 2006 introduced the Tax Increment Financing (TIF) Act, The TIF Act introduces the ability for Ontario municipalities to utilize true U.S. style tax-increment financing to construct municipal infrastructure or amenities, to assist in the environmental remediation of land in a previously developed area and the construction of municipal public transit facilities. The TIF Act authorizes the Province to assist in funding these designated municipal projects. To date, only two pilot projects have been authorized by the Province to use TIF and both of these projects are in Toronto. These are the subway expansion involving York Region and the City of Toronto, and the West Don Lands brownfield redevelopment initiative, which is part of the revitalization of Toronto's waterfront. In order for other municipalities to utilize TIF, the Province must pass regulations under the TIF Act and this has yet to happen. The Planning and Conservation Land Statute Law Amendment Act received Royal Assent on January 1, Resulting changes to Section 28 of the Planning Act enhanced the ability of Ontario municipalities to provide incentives to promote brownfield redevelopment. For example, the definition of eligible costs that can be included in grants and loans now includes the costs of new construction for rehabilitation purposes and the provision of energy efficient buildings, structures and works. A further notable change includes the ability to register community improvement grant or loan agreements against the land to which the grant or loan applies (S. 28(11)). The Municipal Statute Law Amendment Act also received Royal Assent on January 1, This Act introduced reforms to the Municipal Act that: a) allow the removal of provincial Crown liens where a municipality chooses to vest (assume ownership of) a property that has failed a tax sale; b) extend the time municipalities have to make a decision to vest a property that has failed a tax sale from one to two years; and, c) provide for a revenue sharing agreement between the municipality and the province where a municipality sells a property that it has vested as the result of a failed tax sale. The key implications for the Update of the Guelph Brownfield Redevelopment CIP of legislation designed to enhance the tools available to municipalities to promote brownfield redevelopment are discussed in Section Ontario Regulation 153/ What is an RSC? The management of environmental issues associated with brownfield redevelopment in the Province of Ontario is governed by Ontario Regulation (O.Reg.) 153/04 Records of Site Condition made under the Environmental Protection Act. The Record of Site Condition (RSC) is a MOE form which documents and summarizes the environmental condition of a site. An RSC for RCI Consulting in association with Stantec Consulting Ltd. 4

7 a property can be filed in the Environmental Site Registry either voluntarily, or as a required condition of building permit issuance where there is a change in use as specified in O. Reg 153/04. A change in land use from industrial, commercial, or community use to residential, institutional, parkland, agricultural or other use requires an RSC, as summarized in Figure 1. Figure 1 Record of Site Condition (RSC) Requirement for Change of Use Current Use Proposed Use Industrial Commercial Community Residential Institutional Parkland Agricultural Other Industrial X X X X X Commercial X X X X X Community X X X X X Residential Institutional Parkland Agricultural Other Where an RSC has been filed in the Environmental Site Registry for a property, the owner of that property acquires limited protection against regulatory liability on that property, i.e., the MOE cannot issue an order in relation to that property against the owner, any subsequent owner, or any occupants or tenants. Exceptions to this rule, known as reopeners exist in instances of environmental emergencies or where there is danger to the health or safety of a person. The regulatory liability protection for owners filing a RSC provides greater protection to developers and owners who clean up contaminated sites. This should act as an incentive for increased brownfield redevelopment. While this presents an opportunity, the lack of protection to developers and owners who clean up contaminated sites from civil or tort liability is still a constraint to brownfield redevelopment. Consequently, the City of Guelph should ensure that it makes developers and property owners aware of: a) the regulatory liability protection afforded by an RSC; and, b) that there are also mechanisms available to reduce and manage civil liability such as contractual allocation of liability and environmental insurance How are RSCs Used by Municipalities in the Planning Process? The Provincial Policy Statement (PPS) requires that contaminated sites be remediated as necessary prior to any activity on the site associated with the proposed use such that there will be no adverse effect (as defined in the EPA). Therefore, there is clearly support in provincial policy for municipal planning policies that ensures contaminated sites are properly remediated prior to being developed. Since 1996 when the Province downloaded the responsibility for environmental review to municipalities, numerous municipalities have relied on the filing and acknowledgement of RSC s by the MOE in order to make land use planning decisions on contaminated and potentially contaminated sites. An MOE acknowledged RSC is regarded by many municipalities as a proxy RCI Consulting in association with Stantec Consulting Ltd. 5

8 sign-off that a site has been assessed and remediated in accordance with MOE standards. This system of reliance on the RSC has worked well and continues to be used by many Ontario municipalities today. While many municipalities in Ontario, including the City of Guelph, rely on the RSC in their planning approvals process, a municipality should have a strong foundation of planning policies in place to ensure that contaminated and potentially contaminated sites have been adequately identified, assessed and remediated prior to being developed. This includes clearly worded Official Plan policies on potentially contaminated sites and a document and consistent internal environmental plan review procedure to ensure that this policy is properly implemented. Such policies and procedures clarify for developers and owners of brownfield sites when an RSC will be required as condition of planning approval. They also reduce the municipality s liability risk and demonstrate due diligence in its role as a plan review and approval authority under the Planning Act. Finally, they form the basis for any program of financial incentives to promote brownfield redevelopment. The types of conditions that can be attached to various planning applications are determined through the Planning Act and reference within the Planning Act to the PPS. This means that conditional approvals that include the verification that a site is clean for the proposed use are only permitted for certain types of planning applications. Strictly speaking, based on the Planning Act, an RSC can be attached as a condition of approval only to the following types of planning applications: Plan of Subdivision/Condominium Zoning By-law amendment (only through the use of a holding provision); Consent (Severance) As a result, municipalities requested from the Province a way to require RSCs for development on contaminated and potentially contaminated properties in as-of-right zoning situations to ensure that these properties had been appropriately cleaned up. In response, the Province added Section to the EPA to introduce the mandatory change of use requirement for the RSC in situations where there is a change in land use to a more sensitive use. Part IV of Ontario Regulation 153/04 came into effect on October 1, 2005 to implement this change What are the Implications for Municipalities of Recent Amendments to O. Reg 153/04? O. Reg 511/09 was passed on December 29, 2009 to amend O. Reg 153/04 by introducing a number of key provisions. This section of the report summarizes the key amendments to O. Reg 153/04 that will have implications for the City of Guelph s Brownfield Redevelopment CIP, including: a) New definitions and required procedures for Phase I and Phase II ESAs; b) Strengthened soil and groundwater standards; c) Revised RSC filing process; d) Streamlined Risk Assessment; e) More stringent technical requirements; and, f) Implementation and Transition. RCI Consulting in association with Stantec Consulting Ltd. 6

9 While a number of minor administrative amendments came into force on December 29, 2009, most of the amendments to O. Reg 153/04, including those noted in a) to e) above and described in further detail below, do not come into force until July 1, New Requirements for Phase I and Phase II ESAs O. Reg 511/09 introduces a complete rewrite of the minimum requirements for conducting a Phase I ESA and a Phase II ESA. For a Phase I ESA, this includes more detailed site enquiry and reporting, development of a conceptual site model, and mandatory use of a list of Potentially Contaminated Activities. If a Phase I Environmental Site Assessment (ESA) identifies a Potentially Contaminating Activity on a property, a Phase II ESA will be mandatory. It will no longer be possible for the Qualified Person to use professional judgement as to whether a Phase II ESA will be required. The revisions to the Phase II ESA minimum requirements include use of the conceptual site model developed in Phase I to determine the scope of the site investigation in Phase II, detailed specifications for sampling, analysis, and the requirement to prepare a Phase II conceptual site model. The result of these enhanced minimum requirements for Phase I and II ESAs is that the cost of these studies will increase significantly. This will likely result in pressure to increase the maximum $10,000 grant funding available under the City s Environmental Study Grant Program as well as the total annual budget for this program. While all Phase I and II ESAs do not have to meet the new requirements until after July 1, 2011, there is anecdotal evidence that some financial institutions are already requiring environmental site assessments submitted in support of applications for financing and RSCs to meet the new requirements Strengthened Soil and Groundwater Standards The Soil, Groundwater and Sediment Standards for Use Under Part XV.1 of the EPA, March 9, 2004 were based on science available prior to The Ministry of Environment (MOE) felt that these standards required updating based on the most recent science. As such, the MOE drafted updated standards and posted these to the Environmental Registry in March of After review and comment on the draft standards by an expert review panel and brownfield stakeholders, revised standards were posted in October of The applicable Site Condition Standards for the City of Guelph are the Table 2 (potable) Site Condition Standards. The new standards include revisions to approximately 120 soil, groundwater, and sediment Site Condition Standards (SCS). The Table 2 Site Condition Standards for a number of common industrial contaminants will become more stringent (although the Site Condition Standards for some contaminants will stay the same or become less stringent). It is anticipated that this will significantly increase the number of properties in Guelph that do not meet the standards, i.e., an increase in the number of properties in Guelph that are considered brownfields. This will increase the number of properties in Guelph that will require remediation, the costs required to remediate sites and obtain an RSC, and the number of properties for which a risk assessment will be required to support the filing of a RSC. These impacts will all tend to may increase the demand for the City s Tax Assistance Program and the Tax Increment Based Grant Program. RCI Consulting in association with Stantec Consulting Ltd. 7

10 Revised RSC Filing Process Under the current RSC filing process, once a completed RSC is submitted to the MOE for filing, the MOE will either provide an acknowledgement of the RSC or return the RSC as incomplete or deficient. The owner filing the RSC and the municipality where the property is located is not necessarily advised in the MOE acknowledgement letter whether or not the MOE is going to conduct a review of the RSC, and if so, within what timeframe the review will be conducted. This creates a problem for the municipality relying on the RSC to issue a planning approval or building permit because it is put in a position of approving a planning application or building permit for a site based on an RSC that may subsequently be reviewed by the MOE, and possibly fail that review. This problem will be rectified when the new process for filing an RSC comes into force on July 1, As shown in Figure 2, under the new process, when an RSC is submitted, the MOE will issue a notice of receipt for the RSC. Once a notice of receipt has been issued, the MOE has 30 days within which it must provide the owner with written notice that: i) the RSC cannot be filed because it was not completed in accordance with the regulation; ii) the Ministry intends to conduct a review of the RSC; iii) the RSC has been acknowledged and filed in the Registry. In the case of i) or ii) above, the municipality should withhold any planning and building permit approvals based on the RSC requirement until the RSC had been acknowledged by the MOE. Figure 2 Revised Process for Filing an RSC 30 DAYS Streamlined Risk Assessment A new streamlined risk assessment process known as the modified generic risk assessment process will be in place as of July 1, The modified generic risk assessment process provides an alternative to the traditional risk assessment process that allows a qualified person to prepare a risk assessment using a web based approved model. This model will allow for convenient and controlled modification of the Ministry s generic site condition standards. The model can be RCI Consulting in association with Stantec Consulting Ltd. 8

11 adjusted to match an applicant s site specific conditions, supported by site specific data. The regulated MOE review timeline for a modified generic risk assessment is eight weeks while it is typically sixteen weeks for a traditional risk assessment. Therefore, the modified generic risk assessment process may offer a more time and cost effective option than a full risk assessment. However, this benefit will likely be at least partially offset by additional Phase II ESA requirements for modified generic risk assessments completed in support of a modified generic risk assessment. The implication for the City of Guelph is that while the cost and timeline associated with some risk assessments may come down, the cost of Phase II ESAs done to support modified generic risk assessments will increase, possibly adding to demand for the Environmental Study Grant Program. Also, it is our understanding that the MOE will start requiring consultants to use the new site condition standards in risk assessments effective immediately. This will result in additional costs for risk assessment studies More Stringent Technical Requirements The amendment to O. Reg 153/04 also introduces several more stringent technical requirements for environmental site assessments and remediation. For example, as of July 1, 2011 there will be stringent requirements for testing soil imported to backfill remedial investigations. There will also be stringent requirements for verification sampling of soil and groundwater: For example, quarterly post-remediation groundwater sampling will be required for a minimum of one year following the completion of in situ remediation. An RSC cannot be filed until the postremediation monitoring is completed. These stringent requirements will result in increased costs for sample collection and analysis. Again, this may put more pressure on the City s Brownfield Redevelopment CIP incentive programs for environmental studies and environmental remediation Implementation and Transition The change in standards does not affect RSCs that have already been filed and those that will be filed prior to July 1, 2011, i.e., these RSCs will continue to provide owners the same immunity from certain MOE orders as they currently do. However, after July 1, 2011, the new standards will be in effect. The Province has provided transition provisions for those remediation projects that are underway but that are not in a position to submit an RSC prior to July 1, For these projects, a property owner can obtain an 18 month extension to file an RSC under the current standards until January 1, 2013, rather than the new standards, if the owner submits a notice to the MOE between July 1, 2010 and December 31, This notice must certify that: remediation has begun; or a completed risk assessment has been submitted to the ministry; or both, and a Phase I ESA has been completed. However, while owners can extend the time for meeting the current cleanup standards, they cannot extend the time for using their existing environmental reports. After July 1, 2011, every Phase I and Phase II ESA that is used to support a record of site condition must meet stringent new standards for such reports. Few existing reports will meet these standards. Accordingly, there may be a significant additional cost to allowing any cleanup to extend past June 30, Furthermore, it is very likely that purchasers and lenders will view the new standards as the definition of clean soil and groundwater and therefore want sites to meet the new standards in advance of July 1, RCI Consulting in association with Stantec Consulting Ltd. 9

12 2011. The implication is that not only will the number of properties in Guelph requiring remediation and the cost of remediation increase, this will happen much sooner than July 1, 2011 and will put immediate pressure on the City s Brownfield Redevelopment CIP incentive programs. 2.3 Source Water Protection Summary The intent of the Clean Water Act (2006) and the accompanying technical documents, regulations and rules are to protect potable water supplies at the source. The first stage of this is to complete an Assessment Report for each Source Water Protection Area as per the Ontario Ministry of the Environment (MOE) Technical Rules (MOE, 2009) through: completion of an assessment of the vulnerability of the water sources; determination of current water quality issues at water sources and any potential future issues; determination of the threats that may have resulted in the issues at the water sources from current, on-going activities as well as past activities (referred to as conditions ). The City of Guelph falls under the jurisdiction of the Grand River Conservation Authority and the Lake Erie Source Protection Committee for this task. The City, with assistance from Stantec and AquaResource Inc., is currently preparing an Assessment Report to set a framework and context for developing the future Source Water Protection Plan required under the Clean Water Act. The Ground Water Vulnerability Analysis establishes wellhead protection areas, which will be useful in determining brownfield sites which pose the greatest threat to groundwater quality and could be used to prioritize City-funded clean-ups. This work also impacts the update to the City of Guelph Brownfield CIP in the context of the conditions (i.e., brownfield sites) that will be identified through the Assessment Report Future Requirements and Implications The proposal posted by MOE on the Environmental Bill of Rights website (EBR # ) on January 25, 2010 entitled Regulatory components to support the development and implementation of source protection plan under the Clean Water Act, 2006 indicated the following regarding addressing conditions: 19.3 (2) If a source protection plan sets out policies relating to conditions resulting from past activities, the plan shall set out that an objective of the plan is to ensure that for every area identified in the assessment report as an area where a condition that results from a past activity is a significant drinking water threat, the condition ceases to be a significant drinking water threat. To this end, brownfield sites identified as significant threats-conditions within the Assessment Report will have to cease to be a significant drinking water threat. A Source Water Protection Plan to be drafted by the Lake Erie Source Water Protection Committee and Grand River Conservation Authority in cooperation with the City of Guelph will put policy in place to act on these conditions. For landowners, this will mean that sites with contamination from past activities with on-site and off-site impacts will have to be managed. Furthermore, land owners will have to comply with the Source Water Protection Plans and their requirements (which have yet to be determined) or face fines and/or legal action. RCI Consulting in association with Stantec Consulting Ltd. 10

13 Currently, the risk management framework has not been established under the Clean Water Act in the context of Source Water Protection Planning or Policy. However, our current understanding is that there will be a system in place for monitoring and tracking remediated brownfield sites as managed sites. 2.4 Promoting Brownfield Redevelopment Planning Act Section 28 of the Planning Act is the key section in the Act that provides a municipality with powers to promote brownfield redevelopment. Section 28(1) of the Planning Act defines community improvement as the planning or replanning, design or redesign, resubdivision, clearance, development or redevelopment, construction, reconstruction and rehabilitation, improvement of energy efficiency, or any of them, of a community improvement project area, and the provision of such residential, commercial, industrial, public, recreational, institutional, religious, charitable, or other uses, buildings, structures, works, improvements or facilities, or spaces therefore, as may be appropriate or necessary. This represents a wide range of municipal actions that a municipality can take. Therefore, it is important for the City of Guelph to ensure that the enabling community improvement policies it its Official Plan allow it to take full advantage of this wide range of actions. Once a CIP has come into effect, the municipality may: i) acquire, hold, clear, grade or otherwise prepare land for community improvement (Section 28 (3) of the Planning Act); ii) construct, repair, rehabilitate or improve buildings on land acquired or held by it in conformity with the community improvement plan (Section 28 (6)); iii) sell, lease, or otherwise dispose of any land and buildings acquired or held by it in conformity with the community improvement plan (Section 28 (6)); and iv) make grants or loans, in conformity with the community improvement plan, to registered owners, assessed owners and tenants of land and buildings within the community improvement project area, and to any person to whom such an owner or tenant has assigned the right to receive a grant or loan, to pay for the whole or any part of the eligible costs of the community improvement plan (Section 28 (7)). Section 28 (7.1) of the Planning Act specifies that the eligible costs of a community improvement plan for the purposes of Subsection 28 (7) may include costs related to environmental site assessment, environmental remediation, development, redevelopment, construction and reconstruction of lands and buildings for rehabilitation purposes or for the provision of energy efficient uses, buildings, structures, works, improvements or facilities. Section 28 (7.3) of the Planning Act specifies that the total of all grants and loans made in respect of particular lands and buildings under Section 28 (7) and (7.2) of the Planning Act and tax assistance provided under Section of the Municipal Act, 2001 in respect of the land and buildings shall not exceed the eligible cost of the community improvement plan with respect to those lands and buildings. Therefore, it is important to ensure that the Guelph Brownfield Redevelopment CIP includes eligibility criteria and financial assistance capping safeguards that ensure this legislative requirement is met. RCI Consulting in association with Stantec Consulting Ltd. 11

14 Other sections of the Planning Act also provide opportunities to promote brownfield redevelopment through a range of planning and financial incentives. These are briefly described below. Section 37 of the Planning Act allows the council of a local municipality to authorize by way of a zoning by-law, increases in the height and density of development that will be permitted in return for the provision of such facilities, services or matters as are set out in the zoning by-law. These matters could conceivably include brownfield redevelopment. However, Section 37 is usually used to obtain public amenities such as park space in return for increased densities. This section of the Planning Act has not been extensively used to provide density or height increases in return for brownfield redevelopment. Section 69 of the Planning Act allows municipalities to reduce or waive the amount of a fee in respect of a planning application where it feels payment is unreasonable. Municipalities can use this tool to waive all matter of planning application fees to promote community improvement without inclusion in a CIP. Alternatively, a municipality can collect fees and then provide a partial or total rebate of fees in the form of a grant, but this must be done within a CIP. The waiving of planning applications fees, either by way of a fee reduction/waiver outside of a CIP or a fee equivalent grant within a CIP, has been used by a number of Ontario municipalities to promote brownfield redevelopment Municipal Act Section of the Municipal Act allows municipalities with enabling provisions in an approved CIP to offer both municipal and education property tax assistance for environmental remediation costs on brownfield sites being remediated such that a RSC can be filed. This augments the ability of municipalities to offer municipal grants and loans under Section 28 of the Planning Act. Under Section of the Municipal Act, a municipality can pass a by-law to provide tax assistance, i.e., the deferral or cancellation of part or all of taxes levied on that property for municipal and education purposes during the rehabilitation period and development period of the property, both as defined in Section 365.1(1) of the Municipal Act, An eligible property is one where a Phase II environmental site assessment (ESA) shows that the property does not meet the standards that must be met under the EPA to permit a RSC to be filed. The municipality must apply to the Province for matching education property tax assistance through the Province s Brownfields Financial Tax Incentive Program (BFTIP). Under the program, the province can cancel all, or a proportion of the education property taxes of a property for up to three years. Municipalities can apply for an extension to the three year period. Costs eligible for tax assistance include only the costs of environmental remediation, i.e., the costs of any action taken to reduce the concentration of contaminants on, in or under an eligible property to permit a RSC to be filed. A municipal by-law must be passed for properties where this tax assistance is to be provided. The Province may match the municipal property tax assistance with education property tax assistance, but the Province must approve the municipal by-law in writing, prior to passing of the by-law. Also, education property tax assistance may be delivered on a different timetable from municipal property tax assistance. RCI Consulting in association with Stantec Consulting Ltd. 12

15 Amendments to Section of the Municipal Act were made in 2005 to improve the BFTIP. The definition of rehabilitation period was changed to clarify that the rehabilitation period for purposes of tax assistance starts on the date that the by-law passes. The timing of the tax assistance was changed so that municipalities could provide tax assistance during both the rehabilitation and development periods. These changes allow the tax assistance, including the BFTIP matching education tax assistance, to start later in the process, e.g., after redevelopment is complete, when the property generates a much higher assessment value and therefore a much higher level of tax assistance. However, there are some significant limitations to tax assistance. First, the Province has indicated that the education property tax assistance can be provided only to the owner of the property and it will be suspended at the time of sale or conveyance of a property. Therefore, the education property tax assistance is not assignable like grants and loans under Section 28 of the Planning Act. This creates serious difficulties for municipalities and developers wishing to take advantage of the education tax assistance component whenever there is a change in property ownership. For example, there would be no way to collect increased education property taxes from new owners of residential units created on former brownfield sites so that this tax assistance could be transferred to the developer that cleaned up and redeveloped the brownfield site. The same holds true for industrial and commercial development if there is a change in ownership. The Province also will normally end its matching education tax assistance after it has been paid for three years, unless an acceptable business case is made by the municipality for its extension. Combined with the lack of assignability, this limits the usefulness of the education property tax assistance. The Province has set aside $5 million per annum to match property tax assistance contributions from municipalities with the education property tax assistance, but has never come close to using this money in any given year as there have been few applications for education tax assistance. These factors appear to have combined to limit the potential attractiveness and positive impact of the BFTIP Ontario Heritage Act Section 39 of the Ontario Heritage Act allows a municipal Council to pass a by-law providing for a grant or loan to the owner of a property designated under Part IV of the Act for the purpose of paying for the whole or any part of the cost of alteration of such designated property on such terms and conditions as the council may prescribe. The amount of the loan together with interest may be added to the property tax roll and collected as municipal taxes over a fixed period, not to exceed five years, and such amount can be registered as a lien or charge upon the land until payment in full is made. Furthermore, one of the key administrative advantages of Section 39 of the Ontario Heritage Act is that the provision of grants and loans under this section of the Act does not require a formal public meeting as does a CIP. Use of this section of the Ontario Heritage Act would allow municipalities to augment any funding provided under a CIP to a brownfield property that is also designated under Part IV of the Ontario Heritage Act Development Charges Act Section 5 of the Development Charges Act allows a municipality to exempt a type(s) of development from a development charge, but any resulting shortfall cannot be made up through higher development charges for other types of development. This allows municipalities to offer partial or total exemption from municipal development charges in order to promote community RCI Consulting in association with Stantec Consulting Ltd. 13

16 improvement such as brownfield redevelopment. Because this financial incentive is normally offered before construction, i.e., at the time of building permit issuance, it is a very attractive incentives for brownfield developers. The exemption from development charges and reduction of development charges has been used by a number of Ontario municipalities as a key incentive to promote brownfield redevelopment Tax Increment Financing Act Tax increment financing (TIF) is a financing tool that has been successfully used in many U.S. states to promote urban revitalization and economic development. TIF allows a municipality to raise funds for major urban regeneration project(s) within a TIF district. These TIF districts must meet clearly defined and legislated criteria. The municipality (or a TIF administrative authority) then invests in improvements in the TIF district that will spur redevelopment of the district, and/or the municipality provides direct funding to individual projects in the TIF district such a brownfield site remediation and redevelopment projects. The funds provided by the municipality or TIF administrative authority for projects in the TIF district are debt financed (usually through the issuance of municipal bonds). Part or all of the growth in property taxes (municipal and education), i.e., the tax increment within the TIF district, is then directed to pay off the debt financing, e.g., the municipal bond. The TIF district generally remains in place for a specific period of time, often 20 years or more. While tax increment based grants are based on a similar concept, i.e., using the future property tax increase generated by a project to help pay for the costs of the project, tax increment based grants are different from TIF. Tax increment based grants simply use part or all of the municipal property tax increase generated by an individual brownfield redevelopment project to repay part or all of the eligible costs of that project on a pay-as-you-go basis. With a tax increment based grant, the developer pays for the eligible costs of the project upfront and is then reimbursed in the form of an annual grant paid over a period of time once the project is complete and property taxes increase. TIF provides upfront funding that is financed through the issuance of debt, with that debt repaid using the increased property taxes (both municipal and education) generated by the projects in the TIF district. TIF is able to tap into both the municipal and education portion of the tax increment to finance projects while tax increment based grants use only the municipal tax increment. But, there is greater risk involved in the use of TIF if the property tax increment generated within the TIF district is not enough to repay the debt. The Tax Increment Finance Act, 2006 was passed in Ontario as Schedule Z.7 of the Budget Measures Act. The Tax Increment Financing Act allows Ontario municipalities to utilize true U.S. style tax-increment financing to: a) construct municipal infrastructure or amenities to assist in the redevelopment or intensification of previously developed areas or the development of an urban growth centre identified in a growth plan under the Places to Grow Act, 2005; b) undertake environmental remediation of land in a previously developed area; or, c) construct a municipal public transit facility. Downtown Guelph is identified as an urban growth centre in the Growth Plan for the Greater Golden Horseshoe, RCI Consulting in association with Stantec Consulting Ltd. 14

17 The TIF Act allows a municipality to act as a financing authority for the proposed project, presumably through the issuance of a TIF bond, however the TIF Act does not explicitly outline the type of TIF bonds that can be issued. A municipality may apply to receive funding for a proposed project from the Province that is based on the education tax increments expected to occur as a result of the project. This application must be accompanied by a study submitted to the Minister of Finance that examines the feasibility of the project, the proposed TIF district, and an analysis of any new development that could reasonably be expected to occur in the TIF district in the absence of the proposed project. The Minister would then enter into a funding agreement with the municipality. To date, only two pilot projects have been authorized by the province to use TIF and both of these projects are in Toronto. These are the subway expansion involving York Region and the City of Toronto, and the West Don Lands brownfield redevelopment initiative, which is part of the revitalization of Toronto's waterfront. In order for other municipalities to utilize TIF, the Province must pass regulations under the TIF Act. The province is hoping to inform these regulations with what it learns from the two pilot projects, but regulations have not yet been prepared. There are a number of restrictions in the TIF Act which may limit the use of TIF by many municipalities in Ontario. First, the amount of the municipal tax increment that the municipality expects to use in any given year to finance designated projects in the TIF district cannot exceed 1% of all property taxes that are expected to be raised in the municipality that year. This restriction will significantly limit the ability of TIF to raise funds in all but the largest municipalities. The TIF Act in Ontario also restricts the use of TIF only to projects that are approved by the Province for provincial participation. Municipal only TIFs are not permitted. Finally, while the TIF Act includes brownfield site remediation as an eligible project, it would appear that the TIF Act is intended more for large infrastructure projects and large area brownfield redevelopment projects such as the remediation and redevelopment of the West Don Lands on Toronto s waterfront. Therefore, TIF may play a role in funding brownfield redevelopment in some municipalities in the future, say for a large brownfield site or area. But for the smaller brownfield sites, financial tools such as grants, loans and development charge reductions will provide more appropriate and accessible financial tools to promote brownfield redevelopment Provincial Policy Statement (PPS 2005) The Provincial Policy Statement (PPS) is issued under Section 3 of the Planning Act and is intended to guide municipalities as they make planning decisions. The Planning Act requires that municipal decisions in respect of the exercise of any authority that affects a planning matter shall be consistent with the PPS. The Province of Ontario adopted a new Provincial Policy Statement in 2005 (PPS 2005). PPS 2005 is premised on sustainability principles and the stated vision of PPS 2005 is the wise management of growth. PPS 2005 is organized into three principal policy sections including Building Strong Communities, Wise Use and Management of Resources, and Protecting Public Health and Safety. Within these sections, the Province outlines the guiding policy framework for land use decisions made by upper and lower-tier municipalities. Municipal official plans are required to be consistent with all applicable Provincial policies by adopting appropriate land use designations and policies. As well, community improvement plans should be consistent with the PPS. RCI Consulting in association with Stantec Consulting Ltd. 15

18 The PPS supports the remediation and redevelopment of brownfield sites. For example, section c) of the PPS states that long-term economic prosperity should be supported by promoting the redevelopment of brownfield sites. Brownfields are defined in the PPS as undeveloped or previously developed properties that may be contaminated. They are usually, but not exclusively, former industrial or commercial properties that may be underutilized, derelict or vacant. The PPS also supports Smart Growth through urban growth management. For example, section of the PPS states planning authorities shall identify and promote opportunities for intensification and redevelopment where this can be accommodated taking into account existing building stock or areas, including brownfield sites, and the availability of suitable existing or planned infrastructure and public service facilities required to accommodate projected needs. Therefore, the PPS supports brownfield redevelopment as a way to achieve the goal of promoting intensification and redevelopment. Other policies in the PPS (sections a), g) and 1.6.2) support the management of growth to achieve efficient development and land use patterns which sustain the financial well-being of the Province and municipalities over the long term. The redevelopment of brownfields has a role to play in this regard. Finally, section of the PPS states that Contaminated sites shall be remediated as necessary prior to any activity on the site associated with the proposed use such that there will be no adverse effects (as defined in the EPA). Therefore, there is support in provincial policy for municipal planning policies that ensure contaminated sites are properly remediated prior to being developed. This policy directs municipalities to make planning decisions that ensure identified contaminated sites are assessed and remediated to an appropriate level prior to use or reuse Places to Grow - Growth Plan for the Greater Golden Horseshoe Places to Grow, the Growth Plan for the Greater Golden Horseshoe (GGH), is a Provincial initiative to manage growth across the GGH, including the City of Guelph, to ensure that planning decisions are coordinated with strategic investments in community infrastructure. This plan provides a framework to build stronger and more prosperous communities through the better management of growth to The Growth Plan provides policy directions that: Direct growth to built-up areas where the capacity exists to best accommodate the expected population, household and employment growth while providing strict criteria for settlement area boundary expansion; By the year 2015 and every year thereafter, require at least 40% of all residential development occurring annually within a municipality to be in the built up area; Require municipalities to establish intensification targets; Promote transit-supportive densities and healthy mix of residential and employment uses; Preserve employment lands for future economic opportunities; Identify and support a transportation network that links urban growth centers through an extensive multi-modal system anchored by efficient public transit and highway systems for moving people and goods; Plan for community infrastructure to support growth; Ensure suitable water and wastewater services are available to support future growth; and, Identify a natural system and prime agricultural areas, and enhance the conservation of these valuable resources. RCI Consulting in association with Stantec Consulting Ltd. 16