Issue

The Municipal Government Act is one of Alberta’s largest pieces of legislation, containing 18 parts and more than 650 sections. There has been an overarching concern as to the application and interpretation of the Municipal Government Act in the different municipalities. This extensive document is in need of updates and provisions in order to ensure that it is transparent, fair, effective, appropriate and predictable and can be applied consistently across municipalities to ensure good governance and equity is applied across the province. 

Executive Summary

The Municipal Government Act (MGA) is the legislative framework in which all municipalities and municipal entities across the Province of Alberta operate. The MGA has and will continue to have significant implications for all business and industry members, the citizens of Alberta, and the competitiveness of Alberta Municipalities relative to other jurisdictions. With 18 parts and over 650 sections, the MGA continues to be one of Alberta’s largest pieces of legislation, with an over 20 year lifespan. The Medicine Hat & District Chamber of Commerce has focused on the three primary areas including governance, planning and development and assessment and taxation, all of which have been raised as concerns on various levels municipally, particularly in relation to the application and interpretation of the MGA. The Medicine Hat & District Chamber of Commerce has several recommendations in order to work towards achieving a more fair and equitable application of rules and procedures, more transparent processes, more efficient review processes, more appropriate guidelines, a more consistent slate of rules and procedures, and greater predictability and certainty for business and industry. 

Background

The Municipal Government Act (MGA) is the legislative framework in which all municipalities and municipal entities across the Province of Alberta operate. The MGA has and will continue to have significant implications for all business and industry members, the citizens of Alberta, and the competitiveness of Alberta Municipalities relative to other jurisdictions. 

The MGA is one of Alberta’s largest pieces of legislation, containing 18 parts and more than 650 sections. The MGA provides the governance model for cities, towns, villages, municipal districts, specialized municipalities, and other forms of local government. It lays the foundation for how municipalities operate, how municipal councils function, and how citizens can work with their municipalities. 

The MGA contains three major “themes” or areas of focus: 

• governance; 
• planning and development; and 
• assessment and taxation.

The MGA should ensure that modern, effective and leading-edge legislation is in place for the municipalities, citizens, and businesses of Alberta for future generations. As such, the Province and its Municipalities should play a fundamental role in building the platform to accommodate growth and securing the strength of our province by investing in infrastructure, providing services, stewarding communities and providing a competitive advantage in the global economy. 

The Province can also help ensure that Alberta is a strong choice for locating businesses by ensuring the competitiveness of municipal jurisdictions in Alberta in terms of regulation and taxation and that rate-paying stakeholders, like electoral stakeholders, have a vested interest in the future of our Province. 

We recognize that the business community in Alberta contributes to the well-being of our province and our citizens by creating and sustaining vibrant communities. As such, business and industry must work in partnership with the Province and municipalities to ensure future success in business and within our communities.

Through the Municipal Government Act review, the recommendations in Taxation, Municipal Planning, and Regional Planning, the Chamber is seeking to: 

1. Establish clear direction on priorities and interests of business and industry; 
2. Identify and clarify key issues, directions and recommendations regarding current activities related to policies and practices within municipalities and the Government of Alberta (GoA); 
3. Provide coherent, consistent and meaningful input as part of the MGA review process; 
4. Establish broad enough principles so as to attract broad business based support;

Analysis

The Medicine Hat & District Chamber of Commerce recognizes that the legislation we establish today will set the groundwork for the growth and development of our province for future generations. It is essential that the MGA works in the best interests of all stakeholders and that the principles of fairness, transparency, efficiency, appropriateness, competitiveness, consistency, and predictability are reinforced and enshrined in the legislation and subsequent regulations. 

As part of assessing the current legislation and processes, the MGA should consider the following criteria with the overarching theme of equity:

1.  Fair & Equitable – rules and procedures should be fair and equitable within and across jurisdictions and applied equally. 
2. Transparent – processes and evaluation metrics should be clear and defined. 
3. Efficient – processes should be streamlined wherever possible and timelines should be abided with consequences for inaction. 
4. Appropriate – guidelines or codes of practice should be established to ensure responsibility and accountability. 
5. Competitive – jurisdictions need to remain competitive in attracting new businesses. 
6. Consistent – rules and procedures should be consistent within and across jurisdictions. 
7. Predictable – assessments and decisions should be consistent over time, replicable, and provide certainty. 
8. Competence – deciding authorities should maintain independence and professionalism in adjudicating planning and assessment matters. 

Recommendations

The Medicine Hat & District Chamber of Commerce recommends the Government of Alberta amend the Municipal Government Act to:

1. Clearly define the Powers of the Municipality to ensure that municipalities have a clear understanding, interpretation and application of municipal powers. Municipalities, both the governing bodies and the administrators, have different interpretations and applications for the Municipal Government Act and what decisions a municipality can undertake. There needs to be a clear understanding and a resource for municipal elected officials to adhere to, rather than taking the interpretation of municipal administrators. There needs to be a pathway that provides a clear, consistent application and interpretation of the MGA by municipalities. 
2. Implement regular interpretation bulletin in conjunction with the Municipal Government Act Legislation. There have been circumstances where municipalities interpret the MGA in different manners. An interpretation bulletin and guiding documents would ensure consistent interpretation and application of the legislation in the future and would provide guidance on the intent of the Act. 
3. Ensure that the criteria for municipal structures are defined not only by population, but also by the financial status and infrastructure assets. 
4. Implement regularly scheduled reviews, inspections and/or audits of municipalities to promote good governance amongst municipalities. A regular inspection would include review of major bylaw documents as well as reviews of processes and implementation of the legislation to ensure compliance and consistent application of the MGA. 
5. Clearly define the intent and use of in camera and closed council meetings. There are several circumstances of inconsistent and possible misuse of in camera sessions amongst municipalities. Legislation should define when closed or in camera sessions can be held i.e. After an open council meeting, rather than before and implement a requirement to define the purpose for in camera by means of a motion. Additionally, the MGA should more clearly define what in camera or closed sessions can be used for (land, labour, legal) as well as a release of an in camera agenda, the category and the number of items to be discussed.
6. Implement an ombudsman’s office for municipal purposes, similar to the Provincial Ombudsman. Currently there is no office or mechanism to specifically assist a municipality or industry issues related to municipal legislation. Since every Albertan has the right to be treated fairly in the provision of public services, there should be an ombudsman to protect this right on a municipal level to ensure standards of fairness are upheld. A municipal ombudsman would also have the authority to make recommendations if investigation reveals unfairness. This would not only assist in providing information to municipal elected officials, but also provide for an ombudsman for individuals and industry to have a mechanism to respond to unfair treatment by municipal government authorities and municipal regulation, as well as to gain clarity and information on issues related to application of the MGA. 
7. Define how municipalities set up for-profit industries that compete with private sector. When a municipality sets up a business entity that competes with private business there needs to be regulatory standards implemented in order to guide how that business is governed. This will ensure a corporate municipal entity is set up fairly and transparently, that it has a different governance model and ensures clear accounting procedures and transparency. 
8. Ensure that municipalities are required to incorporate policy for Local Government Public Engagement. A policy for local government public engagement would serve to guide trusted, high-quality and effective public engagement efforts that are sponsored, designed, convened, and/or facilitated by local officials. The Principles of Local Government Public Engagement includes the following ten elements: 
   1. Inclusive Planning: The planning and design of a public engagement process includes input from appropriate local officials as well as from members of intended participant communities. 
   2. Transparency: There is clarity and transparency about public engagement process sponsorship, purpose, design, and how decision makers will use the process results. 
   3. Authentic Intent: A primary purpose of the public engagement process is to generate public views and ideas to help shape local government action or policy, rather than persuade residents to accept a decision that has already been made. 
   4. Breadth of Participation: The public engagement process includes people and viewpoints that are broadly reflective of the municipality’s population of affected residents. 
   5. Informed Participation: Participants in the public engagement process have information and/or access to expertise consistent with the work that sponsors and conveners ask them to do. 
   6. Accessible Participation: Public engagement processes are broadly accessible in terms of location, time, and language, and support the engagement of residents with disabilities. 
   7. Appropriate Process: The public engagement process utilizes one or more discussion formats that are responsive to the needs of identified participant groups, and encourages full, authentic, effective and equitable participation consistent with process purposes. This may include relationships with existing community forums. 
   8. Authentic Use of Information Received: The ideas, preferences, and/or recommendations contributed by the public are documented and seriously considered by decision makers. 
   9. Feedback to Participants: Local officials communicate ultimate decisions back to process participants and the broader public, with a description of how the public input was considered and used. 
   10. Evaluation: Sponsors and participants evaluate each public engagement process with the collected feedback and learning shared broadly and applied to future engagement efforts 
9. Implement a regular compliance inspection process for municipal bylaws that are governed by the Municipal Government Act. Hire trained and knowledgeable personnel within Municipal Affairs that would be responsible for reviewing and inspecting items such as land use bylaws and off-site levy bylaws for compliance within the Act. Many municipalities interpret the MGA differently and there are concerns amongst industry with application of the MGA within their municipalities and the inconsistencies that are prevalent in comparison to other municipalities when it comes to compliance. One recommendation to address this would be to provide standardized bylaws that can be used as a template by municipalities so that municipalities are compliant. A standardized document would provide a model that could be applied, but also modified to the municipalities’ specific requirements. This would provide for consistent definitions for zoning, standardized signage requirements, etc. This would be similar to what is applied through the National Building Codes of Canada and modified to provincially based standards.
10. Ensure that the current system of Municipal Planning is better integrated with Regional Planning. A strong regional planning structure would be well positioned to manage growth and limit regional disputes. Regional Planning should identify growth corridors and better plan regional infrastructure networks including shared public transit, sanitation system, and potable water distribution across municipalities. Planning in a regional context would also support collaboration among municipalities and a sharing of benefits resulting from joint service structures and regional tax arrangements. The implementation of a Regional Planning framework would work to balance the interests between large and small municipalities, including the equitable and fair division of natural resources. A new Regional Planning framework should provide alternatives to annexation and veto powers for settling regional disputes. A new Regional Planning framework would also define the clear limitations of municipal powers and recognize that patterns of development do not follow the historical boundaries of municipalities. A regional planning framework would also define the method of cost sharing and long term planning for fair and consistent allocation of resources. This would include equitable share of risk and contributions. An example of this may reflect the authorities and responsibilities previously under Regional Planning Commissions.
11. Provide access to services and resources that are fair, equitable, and transparent. Access to major infrastructure, such as transportation corridors, water, utilities and sanitary sewer should be fair, equitable, efficient and transparent within and across municipalities. Potable water, as an example, is a resource shared by all Albertans and should not be used as a negotiating tool among municipalities, particularly in the establishment of development and growth patterns. 
12. Incorporate a section on Sustainability & Environmental Stewardship that encourages innovative solutions to address existing land use issues. Environmental stewardship has become an increasingly important part of the public conversation and the MGA should be updated to accommodate innovative solutions to environmental problems. For example, Industry currently faces challenges in adapting older non-conforming buildings for reuse as the existing land use regulations make no provision for Adaptive Reuse. Industry believes an opportunity exists to provide for legal non-conforming properties to be adapted for reuse without applying modern land use bylaw restrictions that would force the closure of the property. The reuse of the properties would have environmental benefits in the avoidance of demolition and reconstruction. 
13. Establish an Alternative Dispute Resolution (ADR) mechanism and/or quasi-judicial process under the MGA to resolve disputes between developers and/or ratepayers and municipalities. The goals for establishing this type of process, mechanism or model would be to: 
    1. Reduce the volume of appeals currently burdening the system; 
    2. Improve appeal board independence and objectivity; 
    3. Reduce the adversarial nature of appeal board hearings; and 
    4. Reduce dependency on an already overburdened court system. The dispute resolution program would be designed to facilitate a shift from adversarial, win-lose thinking, towards cooperative problem solving that favours flexible, personalized and durable outcomes. Parties would be encouraged to use mediation as the primary way to resolve disputes rather than being required to enter into the appeals process as a first step. It would also provide full disclosure so parties fully understand the case being made. Unlike a formal hearing, the parties would have control over the outcome and therefore would likely be more satisfied with mediated results than with decisions imposed by the appeal boards. Pre-hearing dispute mediation conferences should be a pre-requisite to certain types of appeals and would help ensure that the parties have the assistance of highly qualified representatives when discussing their dispute and exploring how best it may be resolved. Business believes that an ADR process would substantially reduce the number of appeals and reduce the number of court proceedings that follow unsuccessful appeals; reducing the burden on the system and ultimately costs to taxpayers. 
14. Revise and specify a valid definition for land that is to be used for municipal purposes. In order to expropriate land, a council needs to define land as being required for municipal purposes, but the definition of municipal purposes is not clearly defined. i.e. Expropriating land for building a berm would be acceptable, but there is cause for concern when a municipality is expropriating land at the detriment of another for purposes of private development or something that should not qualify as a ‘required’ municipal purpose. This uncertainty and a lack of transparency in relation to the use of these types of lands can be addressed by legislating clear and easily interpreted definitions for the expropriation of land, the powers of municipalities to expropriate land and land that is to be used for municipal purposes.
15. Establish and define which lands that are not intended for occupancy such as reserve lands/ pipelines/ transportation utility corridors, and agricultural lands, linear parks and exempt such lands from any levies. Those who benefit from growth should pay for the infrastructure required, but only to the degree in which they benefit. If lands are not intended for occupancy – such as reserve lands or corridors, a developer should not be subject to levies on that land. Treatment facilities, roadway improvements exceeding four lanes, overpasses and bridges, and general maintenance should be defined as lands not intended for occupancy and excluded from off-site levies. Walkways should be considered as linear parks and linear parks around storm water management facilities should be designated as municipal reserve lands. 
16. Provide greater clarity on where and how levy funding is allocated. Industry generally believes that levies collected in respect of a development should directly benefit that development. Currently no assurance is given that the money sourced from developers and earmarked for particular improvements is actually spent on the earmarked improvement within the timelines agreed. Funds for improvements are often placed in general reserves to be allocated at the municipality’s discretion with minimal consideration of the original intent of the funds. In the interest of efficiency, municipalities could grant developers the ability to implement the improvements independent of the municipality based on a prescribed funding arrangement, ensuring the improvements are developed on pace with the rest of the development. It is important to emphasize that leading and lagging infrastructure are different, and that some improvements require greater predictability (e.g. sewers) while others do not require the same level of predictability (e.g. schools). However, a process should be in place to ensure both predictability and accountability of all parties. Pooling of levy funds should not be permitted and off-site improvements should be identified at the Area Structure Plan Stage with levies payable at the Building Permit stage. 
17. Clearly define how brownfield development should be treated under offsite levies and ensure that offsite levies are only charged based on use and degree of benefit. Brownfield development should be treated in a different manner than a Greenfield development and there should be provision for an exemption for brownfield development to spur smart growth, re-use and infield development. There should be a separation between the application of levies on brownfield and Greenfield development and allow a municipality to clearly determine the degree of benefit based on actual use and development and not as a lump sum amount. 
18. Provide for the ability for municipalities to create development benefits, incentives of development assists within offsite levy bylaws. A reduction in off-site levies can be viewed as a means to stimulate development, increase the tax base and create job opportunities. Municipalities should have the ability to provide for a development benefit or reduction in offsite levies under the MGA. 
19. Ensure that municipalities advise and document development application deficiencies within 14 days of application and provide a further 60 days after notification of deficiencies to review and approve a development application that is deemed a complete application. Often a developer is waiting on approvals, absorbing cost and time associated with delays. It is prudent that a municipality be required to advise of deficiencies in an application, so that a developer can address deficiencies and continue to move the application forward. If a municipality is non-compliant with the timelines and regulations, there should be a permitted refund or remuneration to the applicant if the legislated timelines are not met. 
20. Ensure that legislation regulates and defines alignment within statutory plans and bylaws. There is a requirement for plans to align in a hierarchy; however municipalities are not always compliant in the application of this hierarchy. Therefore when there is non compliance, there needs to be a process whereby an audit or inspection process can be requested and that alignment of planning tools follows the statutory plans and bylaws i.e. The MSSM needs to follow the land use bylaw and the land use bylaw should follow a Municipal Development Plan. There also needs to be more accountability on area structure plans, but with area structure plans being less prescription so that it doesn’t require a council decision to make changes.
21. Allow for an exemption to advertising and public hearing requirements on rezoning applications. When rezoning to a less intensive use, consistent with the statutory plans and permitted uses that will not materially affect the amenities of the neighbourhood or the use, enjoyment or value of neighbouring lands, exemptions to advertising and public hearings should be provided. 
22. Impose caps to fees and taxes Imposing percentage caps to municipal fees and mill rates would provide certainty and predictability to business and industry. By not only limiting the ratio of non-residential to residential taxes on mill rates, but also capping the allowable percentage increase that a municipality can impose in its fees year over year, provides a more predictable and sustainable business environment, ensuring greater consistency and competitiveness across jurisdictions. The differential between residential and non-residential could be a cap of no greater than 2% or 3% and additionally fee increases should be capped at no greater than 3 or 5%, unless there are justified reasons for greater increases. 
23. Provide for the ability for a municipality to cancel, refund or defer taxes and clearly define and provide clarity on the municipal powers of Council to implement policies for this purpose. Currently not all municipalities have a clear understanding of their ability to implement policies, standards or bylaws related to taxation for the purpose of tax relief or tax incentives. The MGA needs to clearly define what a municipality can impose for tax relief purposes whether for flood relief, business incentive programs or for circumstances whereby a tax will impose significant business hardship on a property owner. 
24. Establish a requirement for municipalities to implement multi-year levy and acreage assessment rate structures to give greater predictability to the industry for investment decisions. Business currently operates on multi-year and long-term planning horizons, but is subject to uncertainty in terms of shorter term assessments and levies. Greater predictability would encourage greater competitiveness and the recommendation to ensure that there are multi-year rates that are sustainable and predictable. 
25. Ensure that all businesses receive fair levels of service relative to the taxes they pay in comparison to residential services and residential taxes. Businesses generally bear the greatest municipal tax burden, however it is yet to be determined if the taxes paid are reflective of the degree in which a business utilizes the municipal services provided. By imposing caps and legislating a requirement to ensure that taxes are relative to the degree in which a ratepayer benefits will provide greater clarity and transparency the taxation process. 
26. Ensure that a municipality is required to provide greater access to property assessment data, including the coefficients utilized in the assessment calculations, to property owners, at no cost, in order to increase predictability and ensure consistency. Currently property owners are not given access to the fundamentals of the calculations that determine the assessed value of their properties. This information gap puts the onus on the property owner to identify in what way they believe the assessment is incorrect, without access to the tools and information that was used to create the assessment. Access to data such as the coefficients would allow property owners to engage in meaningful discussion with municipalities on the nature of their concerns and allow accurate prediction of assessments year-to-year. 
27. Shift the onus of defending the property assessment to the municipality, rather than the property owner in an appeal hearing and ensure that hearings are based on the property being appealed and the evidence related to that property and not the mass appraisal assessment. There is an unfair advantage when burden of proof must be provided by the property owner, rather than the municipality. The municipality should be required to present comparable data to the property owner and explain the reasons for the assessed value in order to justify a reasonable assessment. There should be an equal role by both a property owner and the municipality to justify and explain their analysis of a property’s assessed value and the assessed value should be based on that property when being analyzed and discussed in an appeal hearing. By implement legislation that regulates the appeal process and that when a property goes to a hearing that the hearing is based on the property itself and the value of the property, not the basis of the mass appraisal process ensure that there is a more consistent and fair application when a property is appealed.
28. Harmonize the date for valuation assessments and assessment of conditions to a single date of January 1st. By harmonizing the date for valuation assessments, preliminary assessments would then be made available to the owner on July 1st with taxation statements being mailed on January 1st of the following year when the tax roll is set and finalized. Harmonizing the dates allows a model such as an Alternative Dispute Resolution (ADR) process and much of the appeal process to be completed prior to the finalization of the municipal tax roll; effectively mitigating the municipal revenue risk associated with tax appeals. Removing revenue risk implications from the process will also reduce the adversarial nature of the appeals process and allow a more productive mediation process. The increased time between notification and appeal deadlines would allow municipalities and property owners greater time to come to an agreement prior to entering the appeals process, reducing any burden on the court system and ultimately saving taxpayer dollars. Date harmonization would also allow property owners to more accurately predict tax implications and plan accordingly. In an effort to further remove the financial risk of appeals to municipalities and enhance the property owners ability to appropriately budget for property tax levies, a lag of one year could be inserted between the assessment valuation and appeal year, and the year in which that value is taxed. Tax would then be levied on the value of two years prior, rather than the current one year prior. Any changes made during the review and appeal period would have no impact on municipal tax revenue as the mill rate will not be set until the appeal period is complete. This alternation would remove the financial risk to the municipalities if corrections result in material assessment adjustments. The focus would be on getting values right absent the influence of revenue loss. In addition, Industry would know their assessment value well in advance, allowing them to better budget and plan for shifts within assessment classes. 
29. Replace the Composite Assessment Review Board (CARB) with a new provincial adjudication body. This new adjudication body would ensure a fair, consistent, and transparent process for appeals. This provincial appeal board should be competent (i.e. conversant in valuation matters), neutral, and independent of local influence. Consistent with these principles, membership on the appeal board should preclude elected officials and former assessors and should provide for a consistent number of representatives on the review panel (no less than three to be present at any given hearing). Industry feels that the current process is challenging in that the adjudication of appeals are being heard by the same municipalities that were involved in the assessment process, which leads inherently to a conflict and also to potential and perceived questions of the impartiality of the appeals process. Additionally, industry has experienced an unfair and inconsistent representation on the Composite Assessment Review Board with, in some cases, a case being heard by only two individuals on the Board. Essential to the fair and consistent rendering of decisions is the notion of independence and fair representation; a notion that would be supported by institutional arrangements protecting the Board and its members from any real or perceived pressure to make adjudicative decisions that are not based on merit. It is felt that a new body should be competent in taxation matters and constituted by members who view their roles within the context of public service and decide matters without prejudice, and that these principles be codified in the legislative mandate that enables this new appeal body. Industry members agree that Appeal Board membership should consist of Albertans who are knowledgeable and educated individuals with expertise in the area of real estate fundamentals. Decisions relating to assessments can be highly technical in nature and require relevant experience and an understanding of the industry and other stakeholders that are affected by the decisions of the Appeal process. The education process should be further enhanced to ensure competent adjudication. Improved education and adjudication combined with enhanced impartiality should result in decisions of the appeal board that are fair and consistent to allow predictability of decisions for all parties. 
30. Revise the guidelines for assessment and taxation to provide a consistent methodology for calculations of capitalization rates, use types/segmentation and disclosure of information. Clearly defined processes will ensure that all municipalities are following the same process, that guidelines to assessment processes can be interpreted in the same manner and that there are policies in place that ensure that taxes remain predictable, that they can be proven and that regulation provides for a consistent, fair and transparent practices and methodologies. 
31. Require that an assessment department must provide proof of receipt of information. Industry has indicated that there are inconsistencies related to receipt of information and being denied opportunities to be heard or to appeal because an application or information was not received by a specified or prescribed date. This could be alleviated through the requirement of receipting or confirming receipt of information such as request for information forms and appeal documents. 
32. Ensure that the MGA does not relinquish a property owner’s right to appeal if a request for information was not submitted within the specified timeframe. Currently under section 295 of the MGA a property owner is not able to appeal if they did not submit their request for information. Instead of removing a property owner’s right to appeal, the alternative could be a penalty fee associated with an appeal application if they had not submitted the request for information in the specified timeframe. This not only provides an incentive for property owners to submit their request for information forms, but also does not remove their right to appeal 
33. Require the tax roll to be defined in industry sectors i.e. residential versus non-residential as opposed to one sequential roll. It is reasonable to have separate tax roll listing for the different categories of properties that a municipality imposes and it provides for more a more clear and transparent comparison of properties on any given tax roll. 

Date Drafted: May 10, 2014
Date Reviewed: May 21, 2014
Date Approved: May 21, 2014
Date Completed: