Background

The Land and Property Rights Tribunal (LPRT) has found Off-Site Levy Bylaw 2024-01 to be invalid but has suspended this declaration for four months and allowed the Town to apply for more time if needed to re-pass the bylaw. The decision ruled on a number of issues, some in favour of the appellants and some in favour of the Town. The main issues as framed by the LPRT included the proper scope of an LPRT appeal, the disclosure requirements under the MGA and Regulations, the appropriate remedy, and whether the LPRT should issue directions and conditions on repassing the bylaw.

Regarding the scope of appeal, the LPRT identified where the model used for calculating off-site levies was open to challenge despite the model having been used on a previous bylaw. The LPRT also found that the question of whether the Town properly consulted on the bylaw is a matter for the courts, not the LPRT.

The second issue of whether the Town met statutory disclosure requirements was decided in favor of the appellants. The context for this issue included the Town’s use of a confidential third-party model to calculate offsite levies. The LPRT provides interpretation of the disclosure requirements but leaves several questions on what must be done to meet the requirements and how to go about it. The LPRT declared the bylaw to be invalid but accepted the Town’s request for a suspension of this declaration.

The Town successfully responded to multiple requests for direction and conditions on repassing the bylaw. LPRT declined to impose directions or conditions on passing a bylaw and left the requirements to the MGA.  The LPRT did not intervene in the Town’s chosen methodologies for determining off site levies and stated that consultation does not require industry agreement.

This first decision from the LPRT on off-site levy appeals will have broad implications for municipalities, industry, government and service providers.

LPRT Decision - Main Issues

Issue #1: Scope of the appeal. The LPRT found that the use of the Corvus model was open to challenge where it was used to calculate a levy for a new project or used to change an existing levy, despite the model having been used for the Town’s previous off-site levy bylaw which was not appealed. The LPRT also considered the grounds for appeals to the LPRT under in the MGA and held that whether the Town properly consulted with the appellants is a matter for the courts, not the LPRT. 

Comments: The scope of the appeal is important as this is the first statutory appeal of an offsite levy bylaw to be decided by the LPRT. Challenges to off-site levy bylaws previously went to court. Appeals of other municipalities’ off-site levy bylaws to the LPRT have settled without a decision. The appellants also have an open judicial review application regarding consultation on Bylaw 2024-01 which was adjourned to no set date.

Issue #2: The second issue for the LPRT was information disclosure. The LPRT found that the Town did not meet statutory requirements to make information publicly available during a consultation phase. The LPRT considered section 648.2(6) of the MGA which provides that: 

(6)  A municipality that imposes an off-site levy must make the following publicly available:

(a)    any information or data the municipality relied upon and any assumptions the municipality made in calculating the levy, including, without limitation, any information, data or assumptions the municipality used in models to complete calculations;

(b)   the calculations that were performed in order to determine the amount of the levy;

(c)    anything else that would be required in order to replicate the determination of the levy.

LPRT further interpreted section 643.3(4) of the MGA to conclude that the information needs to be made publicly available during the consultation phase.

During the LPRT appeal, the appellants made a request for disclosure of the Corvus model. The Town engaged Corvus who provided calculation formulas used in the model and who appeared as a witness for the Town. The appellants’ expert financial witness acknowledged that they could replicate the levy calculations when provided with the formulas and information provided during the appeal, and the appellants withdrew their request for disclosure of the Corvus model. The LPRT still found the issue to be what information was made publicly available during the consultation stage. Regarding section 648.2(6)(a) – the “information” relied on in calculations - the noted piece of non-disclosed information was opening balances used in the Corvus model which differed from account balances in the Town’s audited financial statements. Regarding section 648.2(6)(b) – “the calculations” - the LPRT suggested that in some cases formulas and inputs may be practically equivalent to making calculations available but there may be cases where the only practical way to make calculations available is to make the model available. The LPRT treated section 648.2(6)(c) – “anything else that would be required” - as a catch all.

At the LPRT, Corvus also spoke to its own business interests and agreements with its municipal clients to keep the Corvus model confidential. The LPRT held that municipalities’ arrangements were their service providers are not relevant to interpretation of the MGA requirements to make information publicly available.

If a municipality cannot meet the obligations of 648.2(6)(b) without disclosing a copy of the model it used, then the municipality must arranges its affairs so that it is in a position to disclose its model.

Comments: The LPRT’s discussion of the information disclosure issue may raise more questions than it answers, especially regarding the use of third-party models to calculate levies. The LPRT decision indicates that municipalities will need to consider whether a calculation model itself needs to be made available to meet the disclosure requirements, but is much less clear when this need may arise and what standard to apply to this needs assessment.

The Corvus model is used by approximately 40 different municipalities; however, the scope of Corvus’ services and involvement in updating the offsite levy bylaws varies. Some municipalities use Corvus to review levy rates and to publish reports that make levy calculations and information used in the Corvus model publicly available in relation to the bylaw updates. Other municipalities including the Town of Canmore have a license to use the Corvus model to calculate levy rates but do own updates to the levy rates and use other means to make calculation information publicly available for the bylaw updates. Corvus did not participate in the updates to the levy rates or consultations for the 2024 bylaw. Similarly, the appellants’ request for disclosure of the Corvus model came after the appeal was filed.

Going forward, the Town will need to revisit its offsite levy calculation model and, if the model is not disclosed, then review other means through which information listed in section 648.2(6) of the MGA is made publicly available during the consultation phase. There are questions of who should provide these other means of information disclosure as between the municipality, the creator of the calculation model, other service providers, and other participants in consultations. There is also need to consider the timing of consultations and making information available, as it may be necessary to consult on inputs into the off-site levy model before being able to calculate levy rates. Means to make calculation information publicly available will need to be treated as its own topic independently from expressed stakeholder concerns during consultations, which are apt to focus on infrastructure projects. A publicly available calculation model could serve as ‘one-stop shopping’ for all the data and assumptions used in the calculations, the calculations of the levy, and anything else necessary to replicate the calculations of the levy.

Issue #3: The remedy. The LPRT considered failure to meet disclosure requirements coupled with admitted errors in the bylaw. The LPRT declared the bylaw to be invalid but suspending this declaration for 4 months to allow disclosures and consultation and provided leave to request more time to repass the bylaw. The suspension of invalidity was the Town’s request which the LPRT granted. 

Comments: The suspension of invalidity is an important outcome as it provides an opportunity to rectify deficiencies in a way that lessens disruptions on municipal planning, finance and operations when compared to returning to the 2020 bylaw.

Issue #4: Interim directions. The LPRT declined multiple requests from the appellants for interim directions to amend the bylaw. As the LPRT found the bylaw to be invalid, it did not find it appropriate to make interim direction to amend the bylaw.

Issue #5: Conditions on repassing the bylaw. The LPRT declined multiple requests from the appellants for conditions on repassing the bylaw. The LPRT upheld the Town’s approach to the timing of future development as being clear and reasonable.  It accepted the types of items included in the capital costs of projects. It did not intervene in the methodologies used by the Town’s consultant CIMA+ to allocate project costs to new development and to identify benefitting areas for these projects.  The LPRT found that the witnesses from CIMA+ adequately explained their methodology and were forthright and credible. The LPRT also stated that consultation does not require agreement.  The LPRT found that the inclusion of the Waste Water Treatment Plan Discharge Limit upgrade project in the bylaw was premature and noted a requirement in regulations to provide a description of the specific infrastructure.

Comments: The LPRT’s unwillingness to impose directions or conditions on making bylaws, and the distinction that the LPRT made between consultation and agreement, are important outcomes. The LPRT generally left the requirements for making off-site levy bylaws to the MGA.  This part of the LPRT decision upholds municipal autonomy on how to meet the statutory requirements for making off-site levy bylaws, especially regarding inputs into the levy calculation model. The LPRT’s treatment of this topic fits the approach to off-site levies provided by the MGA and reflects the LPRT’s role as an appeal adjudicator, not the regulation-maker. Based on this guidance from the LPRT, the Town intends to make changes to project descriptions and levy zone maps to keep all of the new projects in the 2024 bylaw in the repassed bylaw.

The decision includes outcomes sought by both parties depending on the issue and has broad implications for municipalities in Alberta as well as industry, third-party service providers and government. Previous major legal decisions on off-site levy bylaws have been followed by changes to the applicable legislation. The decision has been the source of commentary from multiple interested parties and should be read first-hand. The decision is available on the website of the LPRT[1] and on the Canadian Legal Information Institute (CanLII).[2]

[1] Decisions - Alberta Land and Property Rights Tribunal

[2] Canadian Legal Information Institute | CanLII

Consultation Underway to Re-pass the Bylaw

We have started the consultation process with industry as we work to re-pass the bylaw. You can find all information related to the consultation process here: mycanmore.ca/osl. To receive regular newsletter updates on the process, click the subscribe button on the bottom right hand side of the project webpage.