Issue

In 2011, Development & Infrastructure Division Fees and Charges were proposed to increase by as much as 185%. At that time the Chamber put forward recommendations to re-evaluate the increases and subsequent changes and concerns were addressed. On December 16, 2024, City Council approved planning and development services fees and charges for 2025 and 2026 with limited feedback from the development community, resulting in concerns once the fees and charges were implemented. Details of the fee increases can be found in Appendix A.

Executive Summary

Similar to what was experienced in 2011, the new fees adopted in December 2024 for 2025 and 2026 have resulted in some significant increases in several fees and charges. The proposed increases are in an attempt to recover costs of the Planning & Development Services department. While many of the development fees see modest to moderate increases, the significant variances were most notable in the business license fee changes with increases ranging up to over 600% for some of the new tiered classifications With many of the challenges our businesses are facing with increased costs and declining business activity, the Southeast Alberta Chamber of Commerce recommends that the City of Medicine Hat re-evaluate options for implementing the new tiered business licenses structure and consult with industry, key stakeholders and organizations for implementation of the fee structures that can be more reasonably implemented over a period of time. As previously recommended, any fees and charges should be based on a baseline structure, with incremental percentage increases over a period of time, taking into consideration cost of service delivery and taking into consideration natural inflationary costs. 

Background

On review of the 2025-2026 fees and charges schedule for 2025 and 2026, Medicine Hat remains higher than comparable sized Cities in Alberta. We recognize that the fees were set taking into consideration inflation, cost recovery, time required for public engagement and appeals, as well as enforcement expectations and costs. We also appreciate that the fees and charges table has been simplified, that some fees have been consolidated and that the e-permitting charge has been eliminated. 

The Southeast Alberta Chamber of Commerce noted improvements in the new 3-year license option, a reduced not for profit rate and the elimination of an additional home-based business ‘surcharge’ that previously had been charged and added as an additional fee to the business license category classification.

Medicine Hat is lagging behind other communities in Alberta in building permits construction and business growth. In addition, within the 2023 Development Statistics, we have continued to see declining trends since 2019 with some growth in 2021 and current development permits trending lower than those in 2019. Similarly we have seen a decline in the number of businesses and building permits since our peak in 2006. Fee increases only serve as an additional deterrent to investment in our community. The Chamber is very cognizant of the business climate and in turn has also been very conservative when evaluating rates and fees. 

With City Council’s focused 2-year strategic plan, which highlights a priority of fostering a dynamic and thriving community economy, further stipulating a desire to create opportunities to incentivize business and reduce barriers, imposing significant fee increases well above inflation and even well above a 10-20% increase does not align with the direction from Council, nor the leadership needed to support our business community.

If Planning and Development evaluated fees charged by comparable-sized cities, reflecting local market conditions and unit cost for service, excluding public engagement and appeal requirements, it would provide a better idea of reasonability on fee structures. 

To prevent “rate shock” and to create a structure that is more reasonable and justifiable to the end user, rate reviews should be conducted each year. If rates are reviewed on a regular basis and are in line with the rate structures of similar sized municipalities and local economic conditions, while not significantly increasing in any given year, then an environment is created that is more manageable and palatable to the business community. 

During these slow and volatile economic times Medicine Hat businesses are cutting back, watching expenses and reducing profit margins. Our municipality should be no different and should be charged with evaluating cost structures and expenses to become more efficient and seek ways to further promote growth and development.

Recommendations

The Southeast Alberta Chamber of Commerce recommends that the City of Medicine Hat:

1. Re-evaluate the increases in fees and charges and consult with industry, key stakeholders and organizations for reasonable fee structures that are implemented over a period of time.
2. Base any fees and charges on the current baseline structure, with incremental percentage increases over a period of time, in line with the cost of service delivery and taking into consideration natural inflationary costs. 
3. Revert back to the 2024 fee structure until more research and municipal comparisons can be gathered and referred back to the Development & Infrastructure committee for reconsideration, evaluation, consultation and resubmission.
4. Communicate the justified “Fee for Service” per unit cost, including distinction between one off services, such as: open houses, bylaw enforcement, and formal appeals.
5. Compare fees with other comparable-sized cities for reference for research purposes to align with other fee structures charged.
6. Ensure any future fee proposals include the percentage increase comparable to prior years.
7. Ensure that public engagement and appeals do not adversely impact the cost of fees to develop. 

Resources

• City of Medicine Hat Strategic Plan 2024-2026: /https://www.medicinehat.ca/en/government-and-city-hall/resources/Documents/Plans-Reports-and-Studies/24-26-Strategic-Plan_web.pdf 
• Economic Regional Dashboard: https://regionaldashboard.alberta.ca/region/medicine-hat/number-of-businesses/#/?from=2019&to=2023 
• City of Medicine Hat Fees and Charges 2025-2026: https://www.medicinehat.ca/en/business-and-development/building-development-and-business-fees.aspx#General-business-fees
• City of Medicine Hat City Council meeting package December 16, 2024: https://docs.medicinehat.ca/OnBaseAgendaOnline/Documents/ViewDocument/REGULAR_MEDICINE_HAT_CITY_COUNCIL_5768_Agenda_Packet_12_16_2024_6_30_00_PM.pdf?meetingId=5768&documentType=AgendaPacket&itemId=0&publishId=0&isSection=false  
• City of Medicine Hat Development Statistics 2023: https://www.medicinehat.ca/en/business-and-development/resources/Documents/Reports-Statistics/2023-Development-Statistics.pdf   
• Chamber of Commerce policy: 2011: https://chamber.southeastalbertachamber.ca/policy-wins/Details/development-and-infrastructure-division-fees-and-charges-122409 
• Publications from similar sized cities: 2025:
• https://www.airdrie.ca 
• https://cityofgp.com 
• https://www.lethbridge.ca 
• https://www.reddeer.ca 
• https://stalbert.ca/

Appendix A: Comparison of Development & Infrastructure Division Fees and Charges (2023-2026)

Date Approved: December 21, 2011
Date Completed: 2012

Date Renewed and approved: March 19, 2025