Federal government should drop conditions for new infrastructure funding
Off-site levies work well in Alberta
Submitted by: Alberta Municipalities (ABmunis)
The Build Communities Strong Fund (BCSF) introduced in the federal government’s November 2025 budget promises $51 billion in funding over the next decade for infrastructure to support the building of new homes, public transit, and community facilities. It might seem like a big win for municipalities in Alberta, but is it?
Alberta Municipalities (ABmunis) is concerned that the conditions that accompany the BCSF will further erode the autonomy of local governments and inadvertently lead to property tax increases.
The Government of Canada’s BCSF
Under the Government of Canada’s BCSF, provinces and territories will receive funding for housing-related infrastructure like roads, water and wastewater systems, and public transit. Municipalities across Alberta are dealing with ongoing rapid growth, affordability challenges, and aging infrastructure, so they’re eager to receive long-term, predictable funding for major projects.
To access the largest funding stream offered under BCSF, provinces must substantially reduce development charges (known as offsite levies in Alberta). Development charges, paid by land developers to fund roads, water and drainage systems for new neighbourhoods, ensure that “growth pays for growth.” If these charges are reduced, municipalities may need to raise property taxes or delay projects to offset the lost revenues, shifting the costs from developers to taxpayers.
One size doesn’t fit all
Our association, which represents 264 municipalities across Alberta, is concerned this requirement of the BCSF undermines local autonomy. The federal government’s “one-size-fits-all” approach may suit other provinces and territories, but it doesn’t work here. It ignores the fact that development charges are relatively modest in Alberta and they’re working well. Alberta’s approach to development charges has helped to make house prices relatively affordable. In contrast, the much higher development charges in other provinces have contributed to unaffordable house prices in places like Toronto and Vancouver.
Alberta might miss out
The BCSF offers municipalities across Canada a chance to improve local infrastructure and support housing growth, but the conditions that accompany it raise serious questions about fairness and effectiveness. What might work in Ontario will not necessarily work in Alberta. We believe that the BCSF will address housing affordability in other provinces, but won’t be effectively deployed in Alberta, which means Albertans will miss out on considerable amounts of much-needed federal government funding. We encourage the federal government to fund housing-related infrastructure without imposing prescriptive conditions that may burden taxpayers and slow progress.
Alberta Municipalities looks forward to working with the Government of Canada, the Government of Alberta, and the Federation of Canadian Municipalities to tailor BCSF in ways that accelerate housing builds while protecting municipal autonomy and fiscal sustainability.