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Financing a Brownfield Project

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There are a number of programs and tools in Ontario that may be used to help encourage brownfield redevelopment:

Many Ontario municipalities use their special financial tools to offer incentives to encourage brownfield redevelopment in their communities. The power to offer incentives is regulated by section 106 of the Municipal Act, 2001.

Community Improvement Plans

Community Improvement Plans are used by municipalities to set out a municipal framework for the rehabilitation of existing built-up areas. They may also include municipal financial incentive programs related to land: for example, grants and loans, which may encourage and stimulate private sector investment in municipal priority areas. For more information, contact your local Municipal Services Office.

What is the Brownfields Financial Tax Incentive Program?

The Brownfields Financial Tax Incentive Program (BFTIP) is an initiative of the government of Ontario to encourage the cleanup and redevelopment of brownfield properties. It allows municipalities to provide property tax assistance to property owners in connection with environmental rehabilitation of brownfields properties within an approved community improvement project area.

It provides provincial education property tax assistance to match municipal property tax assistance for cleanup of eligible brownfield properties. Under the program, the province can cancel all, or a portion of the education property taxes of a property for up to three years. Municipalities can apply for an extension prior to the termination of the tax assistance.

How do I apply?

If you are a brownfield property owner interested in the BFTIP, contact your local municipality. Municipalities apply on behalf of property owners. They must also be qualified under the program before the owner can receive provincial assistance.

A municipality interested in BFTIP must first be offering municipal property tax assistance on the brownfield property located within a Community Improvement Plan project area.

The municipality will need specific information and an authorization from the property owner. These will be sent to MMAH and/or other ministries.

Ministry staff will review applications and will contact the municipality if more information is needed.

Local governments are responsible for their decisions and actions. Legal requirements not mentioned in the application may apply to the provision of BFTIP or a municipal bylaw. Municipalities are encouraged to obtain legal advice in developing or passing any bylaw, including a bylaw under section 365.1 of the Municipal Act, 2001 or where otherwise needed for the purposes of BFTIP.

Overview of Application Requirements

Application Form - The municipality must fill out an application form for each property it proposes to receive education property tax assistance.

Proposed Municipal Tax Assistance Bylaw - The proposed municipal tax assistance bylaw must include the details of the municipal property tax assistance to be offered to brownfield property owner(s) over a given time period.

Community Improvement Plan (CIP) – The municipality must include a copy of the relevant CIP, and the bylaw adopting it, enabling the municipality to provide municipal property tax assistance.

Program Information and Document Requirements – A variety of other information requirements apply such as confirmation of participation by upper-tier municipalities (if applicable), current assessment information, and estimates of the tax assistance to be provided.

Where do I get more information?

The nearest regional Municipal Services Office is your contact for information about the Brownfields Financial Tax Incentive Program. 

Resources and Related Programs

  • Building Canada Fund - On September 12, 2008, Ontario launched the $200 million first intake of the Building Canada Fund-Communities Component program, which provides Ontario’s smaller towns and rural communities (those with population under 100,000 people) increased access to infrastructure funding. Over a six year period, the federal and provincial governments each expect to contribute a total of $362 million to the program for a combined investment of $724 million. Designed as a competitive, application-based program, the fund proposes to finance 17 categories of community-based infrastructure projects of which brownfield redevelopment is one
  • Community Improvement Planning Handbook This handbook is intended to assist municipalities and others interested in community improvement planning under section 28 of the Planning Act

Related Links

  • Canadian Brownfields Network (CBN) is a national voice and an advocacy network for practitioners and stakeholders who want to effect change regarding brownfields redevelopment and urban revitalization in Canada. The CBN facilitates linkages and connectivity within private industry, builds capacity and co-ordinates the exchange of ideas, expertise and success stories. 
  • Canada Mortgage and Housing Corporation (CMHC) showcases various case studies of residential projects that have overcome the barriers to brownfields redevelopment. Despite the numerous obstacles facing brownfields redevelopment, successful redevelopment projects have been built across Canada.
  • Federation of Canadian Municipalities - Green Municipal Fund (GMF) was established to stimulate investment in innovative municipal infrastructure projects. The Fund supports partnerships, leveraging both public and private sector funding to encourage municipal actions in such areas as: sustainable community planning, solid waste management and brownfields redevelopment.

Frequently Asked Question

What is the Brownfields Financial Tax Incentive Program (BFTIP)?

The Brownfields Financial Tax Incentive Program (BFTIP) is a provincial funding program that provides matching education property tax assistance to eligible brownfield property owners under section 365.1 of the Municipal Act, 2001. Assistance provided through BFTIP is conditional upon, and is matched to, brownfield property tax assistance that is provided by a municipality.

Who can apply for matching education property tax assistance through the Brownfields Financial Tax Incentive Program? What properties are eligible?

Municipalities apply to the Ministry of Municipal Affairs and Housing on behalf of a brownfield property owner for this program.

A property owner interested in BFTIP should contact the local municipality or official.

To be eligible for BFTIP, a property must have had a phase two environmental site assessment. The assessment must have determined that the property is in need of environmental remediation (which, in this context, means the property needs action taken to meet appropriate standards under the Environmental Protection Act).

An eligible property must also be included in a community improvement project area for which a Community Improvement Plan, with tax assistance provisions contained in the plan, is in effect.

If a municipality is interested in using BFTIP, what should be included in their Community Improvement Plan (CIP)?

For program purposes, a by-law adopting a CIP must contain a reference to the effect that section 365.1 of the Municipal Act, 2001 enables municipalities to provide municipal property tax assistance in connection with a community improvement plan, and Minister of Finance approval is required before matching education property tax assistance will be provided.

What are eligible costs under BFTIP? Are they the same as municipal eligible costs? Can this affect how I receive my assistance?

As stated in the application form, eligible costs for provincial matching education property tax assistance are:

  • Any action taken to reduce the concentration of contaminants on, in, or under the property to permit a Record of Site Condition (RSC) to be filed;
  • Compliance with any Certificate of Property Use issued under the Environmental Protection Act;
  • Environmental consultant fees; and/or
  • Property insurance during the remediation period.

There can be differences between municipal and provincial programs. A municipality may decide that costs under its tax assistance program are eligible, but those costs may not be considered eligible under BFTIP. Accordingly, the timing of and conditions for municipal and provincial assistance may vary.

How long can matching education property tax assistance be provided to a property owner through the program?

Municipal applications to the Ministry of Municipal Affairs and Housing for matching education property tax assistance are considered on a case-by-case basis. Matching education property tax assistance may be granted for up to three years.

Prior to termination of matching education tax assistance, a municipality may make a case to the Province for an extension.

Under what conditions will matching education property tax assistance (education property tax assistance) end before the date specified in a by-law?

Matching education property tax assistance could end in relation to an eligible property in situations such as:

  • if the eligible property is severed, subdivided, sold or conveyed at any time after the owner makes an application to the municipality; or
  • if the owner of the eligible property fails to meet any legal requirement that applies to the owner or to the property in connection with municipal or matching education property tax assistance.

How is the municipal portion of property taxes matched under BFTIP?

Matching is proportional. For example, if a municipality cancels 50% of municipal property taxes, then the Province, generally, would consider providing tax assistance in the form of a similar 50% cancellation in the education portion of the property tax.

In circumstances where there is an upper-tier municipality, the upper-tier has the option of supporting the lower-tier tax assistance program by cancelling all, or a portion of the taxes levied for upper-tier municipal purposes.

Is it possible to flow assistance under section 365.1 of the Municipal Act, 2001 to the remediating property owner in respect of property that has already been sold?

Section 365.1 of the Municipal Act, 2001 allows for tax assistance in the form of a property tax deferral or cancellation. Under the program a deferral or cancellation of taxes is only provided directly to the original property owner. Accordingly, under the program, matching education property tax assistance will end for an eligible property in cases where the property is severed, subdivided, sold or conveyed.

Can the ‘outstanding balance’ (the maximum amount of matching education property tax assistance that might apply in relation to an eligible property) be converted to a grant in the event that tax assistance is terminated? What if an eligible property is sold before all rehabilitation and development activities have been completed?

There is no provision in the provincial tax assistance program for grants, as the program does not provide for direct payments, only for a cancellation or deferral of municipal and education taxes.

What is the difference between BFTIP education property tax assistance and a Tax Increment Equivalent Grant (TIEG) program?

The difference between tax assistance under BFTIP and a TIEG is that taxes are cancelled or deferred on the tax rolls for BFTIP. TIEG and similar programs are arrangements where an amount equivalent to taxes is granted back to a property owner or other eligible recipient.

There is no provision in the provincial tax assistance program for grants, as the program does not provide for direct payments, only for a cancellation or deferral of municipal and education taxes


 

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