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Town of Canmore asks tribunal to direct removal of more than $30 million in off-site levy bylaw

More than $30 million was incorrectly added to the Town of Canmore’s off-site levy bylaw, a provincial tribunal heard from the Town in closing arguments for an appeal brought forward by developers.
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Construction at The Gateway in Three Sisters continues to be under construction. GREG COLGAN RMO PHOTO

CANMORE – More than $30 million was incorrectly added to the Town of Canmore’s off-site levy bylaw, a provincial tribunal heard from the Town in closing arguments for an appeal brought forward by developers.

The Town’s legal representation, Gavin Fitch, asked the three-person Land and Property Rights Tribunal (LPRT) to direct the municipality to remove several projects from the bylaw.

But lawyers for developers asked for the entirety of the bylaw to be invalidated and that conceded projects to immediately be removed in what will likely be a precedent-setting case in Alberta for the development industry and municipalities.

“We don’t want this to drag out for two years,” said Kathleen Elhatton-Lake, a legal representative for developers, noting they wanted clear direction for all involved.

“The reason we think it should be declared invalid is there are so many issues. There are issues with specific projects, there are issues that are overarching, issues of inconsistency of information. … The Town has had, for now, months, it is collecting money it is not entitled to. That should be fixed immediately.”

Gwendolyn Stewart-Palmer, a lawyer for appellants, made several asks of the tribunal ranging from publishing all required information as outlined in the Municipal Government Act (MGA), changes to specific projects, consultation and revision of levies to better reflect cost allocation of benefit between the Town, new development and Dead Man’s Flats.

“We want the board to provide direction to the date of completion for the purposes of clarity and certainty amongst all of us, so we understand what has to be done,” she said, adding developers wanted a definitive date to have the requests completed for specific clarity.

Fitch took issue with the requests, saying they were “breathtaking”, and they were attempting to make it as confusing as possible.

He said it was the “icing on the cake” and the appellants’ continued attempt throughout the hearing has been to make it overly complicated, “detailed and confusing, to be frank, as possible”. Fitch added in his experience as a lawyer, particularly at administrative tribunals such as the LPRT, he’d never seen requests made as they were.

Elhatton-Lake said the appellants were looking for “very specific directions” in moving forward rather than attempting to confuse or complicate.

“We’ve now said, ‘here’s what you need to direct on that’. … I don’t think this is the appellants trying to make things more complicated than they are. I recognize this is a complicated issue, but part of that is the evidence from the Town they’ve done in preparing their off-site levy bylaw. … We are trying to make it as clear as possible what you need to do as a panel.”

Fitch said it would be a “draconian remedy” to invalidate the entire bylaw and “not in the public interest.”

If the bylaw were invalidated, it would return to the 2020 off-site levy bylaw and cost the Town $1 million to $2 million a year in collections.

Off-site levies are development charges made by municipalities on new development to help cover infrastructure needs such as water, wastewater, roads and stormwater. The costs are designed to be split between municipalities and developers in a cost allocation scheme, where growth pays for growth and infrastructure that benefits existing residents is split between developers and a municipality.

“There would be no merit in declaring the entire bylaw invalid and basically telling the Town and BOWDA (Bow Valley Builders and Developers Association) to go back to the table and start talking again,” Fitch said. “Unfortunately, sometimes people just don’t agree. It’s clear the Town and BOWDA fundamentally disagree.”

Fitch said the Town felt it had extensive consultation, but “sometimes people just don’t agree,” leading to the appeal. He argued several projects were modified by the Town when developers brought forward concerns in consultation.

“The record is clear. Where BOWDA drew to the attention of the Town and CIMA+ (the Town’s main consultant on projected infrastructure needs in the Utility Master Plan) a reasonable argument where there should be no allocation of growth or a smaller allocation, the Town and CIMA+ responded reasonably and fairly to change cost allocation in developers favour,” he said.

He said the developers’ position was “fundamentally wrong” and evidence from Arcadis, developers’ expert witness, was “weak and unpersuasive”.

Fitch asked the tribunal to have the bylaw remain valid and enforceable until amendments are ordered by the tribunal and the Town can fix the errors.

He said it would be “ridiculous” to have the tribunal direct the Town to consult with BOWDA, nor would it have jurisdiction to do so.

Elhatton-Lake said the ask for direction on consultation was necessary to avoid further dispute between the two parties. She noted developers submitted an expedited timeline for discussions last March, which was rejected by the Town and Canmore council, with developers eager to move forward with a resolution.

“We shouldn’t have to come here to appeal to identify mistakes that should’ve been raised and identified in consultation,” Elhatton-Lake said. “They couldn’t if no one gave you the documents.

“BOWDA wants to have a positive relationship with the Town. They’re with each other for the remainder of time, but that doesn’t mean BOWDA has to agree with everything the Town puts forward. Where there appears to be a significant error and you’re charging millions of dollars to people, it’s entirely valid to put your position out there and stand up and say this isn’t a fair charge. … The parties need to be able to have discussions about these issues and accept they may have different positions. You don’t get to walk away from consultation because someone disagrees with you.”

Fitch argued developers’ intent was to have the LPRT force the Town back to the negotiating table “in a significantly diminished and weakened negotiating position” and continue consultation on cost allocation.

He said when developers brought up case law starting in September 2023, it was unlikely to have a “fruitful or insightful consultation on an ongoing basis.”

However, Elhatton-Lake countered that consultation was inadequate, particularly when it came to discussions on determining costs.

“When the rubber hit the road on cost allocation, the Town stopped consulting,” Elhatton-Lake said, noting it wasn’t a statement on individuals, but the process followed by the Town.

She pointed to developers not receiving necessary and legislatively required information such as the Town’s servicing agreement for Dead Man’s Flats, little to no information on costs associated with roughly $71 million for the wastewater treatment plant, technology assessment and cost breakdown between the Town, developers and Dead Man’s Flats.

Elhatton-Lake added all information to replicate the off-site levy rates, which are required under provincial legislation, and were only provided after the appeal. The annual off-site levy report, also required under the MGA, hadn’t been released for 2023, which would have additional financial figures.

She stated Town staff didn’t provide information because they felt it was “too technical for BOWDA” on information about the wastewater treatment plant costs and technical assessments. She added a schedule of cost breakdowns wasn’t given to BOWDA after Andreas Comeau, the Town’s manager of public works, emailed them to the Town’s general manager of municipal infrastructure Whitney Smithers, saying they were ready to be shared with developers.

“A municipality has to make those public when it passes the bylaw. The direction we want isn’t just for the Town of Canmore or individual developers, it is important direction for the development community and municipalities as a whole to say ‘you do need to show these calculations’ that’s what the law says. … It wasn’t done here … It’s an obligation for a municipality to meet its transparency obligations.”

Before the start of the appeal hearing, the Town asked the LPRT to direct it to remove $14.5 million from the bylaw. In closing arguments, Fitch said the specific zone is large, encompassing The Gateway, Smith Creek and Stewart Creek and the biggest in Canmore’s bylaw. He said all development in an off-site levy zone is required to be levied.

Fitch also asked the tribunal to order the Town to reallocate costs for the wastewater treatment plant projects.

In legal submissions from the Town, it admitted cost allocation involving Dead Man’s Flats and the wastewater treatment plant was inconsistent and about $4.5 million is being incurred by the Town when it should be Dead Man’s Flats.

He said the Town acknowledged under the MGA it can’t levy a cost unless development benefits, meaning the zone would be made into multiple new zones and until then four projects comprising $16.36 million should be removed from the bylaw.

“This is an area of the town that’s partly developed. There’s a lot of raw land that’s still to be developed. … Because it’s so large, some planned development, like The Gateway, will not actually connect to some of the water and wastewater infrastructure that are required to service the entire zone,” he said.

He said developers didn’t raise it as a concern during consultation, but Elhatton-Lake provided evidence in the closing arguments rebuttal it had been an issue raised Jan. 10, 2023, in a meeting between the Town and developers.

“It is entirely inaccurate to say BOWDA didn’t raise this before,” she said, adding it could’ve been avoided if rates had been shared before the bylaw was passed.

She said transparency is an overarching principle when looking at the MGA and off-site regulations, but “when you spend someone else’s money you need to be transparent and clear about how you’re spending it.”

“We want the panel to make it clear for both parties. … We want to eliminate ambiguity.”

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