GMF - Brownfields Funding Sources and Incentives

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FCM has compiled a list of national, provincial and private funding sources and incentives available to municipal governments to support brownfield projects.

National

FCM’s Green Municipal Fund

FCM’s Green Municipal Fund™ specifically targets brownfield initiatives. The Fund provides grants for brownfield studies and low-interest loans for capital projects. FCM recently broadened the criteria for brownfield capital projects, the types of projects eligible for funding as well as the eligibility of applicants.

Funds available: Grants up to 50 per cent of eligible costs to a maximum of $350,000 for brownfield studies; low-interest loans up to $20 million for brownfield projects.

Sustainable Development Technology Canada (SDTC)

The SD Tech Fund™ supports the late-stage development and pre-commercial demonstration of technology solutions that contribute to clean air, clean water and clean land, address climate change and improve the productivity and the global competitiveness of the Canadian industry. While not specifically targeted, brownfield projects are eligible for funding.

Funds available: Grants up to 50 per cent of eligible costs (average is 33 per cent).

Provincial

Ontario

The Province of Ontario offers the following tools and incentives municipalities can use to support brownfield projects.

Ontario Ministry of Municipal Affairs and Housing

The Brownfields Financial Tax Incentive Program (BFTIP) provides provincial education property tax assistance to match municipal property tax assistance for the cleanup of eligible brownfield properties. The Province also offers Tax Increment Financing (TIF), a financing mechanism that uses the increase in property tax revenues generated by the redevelopment of a property to cover costs associated with redevelopment.

Incentives available: Tax incentives offered under the BFTIP are proportional to the tax assistance offered by the municipal government, not to exceed the total cost of rehabilitating the site. Tax incentives offered under TIF can cover up to 50 per cent of the cost of rehabilitation.

Ontario Ministry of Culture

The Heritage Property Tax Relief Measure enables municipal governments to provide tax benefits to owners of brownfield sites located on heritage properties.

Incentive available: Between 10 and 40 per cent of the municipal and school taxes levied on the property.

Ontario Planning Act, 2006

The Planning and Conservation Land Statute Law Amendment Act, 2006 enables municipal governments to help stimulate and encourage brownfield redevelopment. Through Community Improvement Plans (CIPs), municipalities may approve financial assistance to the private sector for costs associated with new building construction and energy efficiency initiatives.

Tool available: Policy mechanism that enables municipalities to offer financial support and tax incentives for brownfield remediation projects.

Provincial Policy Statement, 2005

The Provincial Policy Statement supports and prioritizes brownfields redevelopment initiatives. The Statement identifies brownfield sites as opportunities for redevelopment and recognizes the important role that intensification and redevelopment play in meeting land use requirements.

Tool available: Policy mechanism that enables municipalities to offer financial support and tax incentives for brownfield remediation projects.

Infrastructure Ontario

Infrastructure Ontario's OSIFA Loan Program is an alternative financing solution designed to help public sector clients seek affordable, long-term financing in support of infrastructure development across Ontario. This includes the clean-up of brownfield sites.

Incentive available: Infrastructure Ontario loans can be used for any capital investments, including renovation and retrofitting, the clean-up of brownfield sites, facility or land acquisition, new construction projects, energy efficiency projects, accessibility improvements, vehicles and maintenance equipment.

Ontario Ministry of Finance - Tax Increment Financing (TIF)

To qualify for a TIF, a municipality must prepare and adopt a community improvement plan (CIP) for one or more designated community improvement project areas. Once the plans are approved by the Province of Ontario, the municipality may offer TIFs, grants, loans and other financial incentives to property owners, tenants or their assignees within the geographic area covered by the community improvement plan.

Incentive available: TIF is a financing mechanism that uses the increase in property tax revenues generated by the redevelopment of a property or area to pay for the costs associated with redeveloping that property or area.

Joint Provincial and Municipal Tax Increment Grant (TIG) Program

The joint Tax Increment Grant (TIG) program demonstrates how the Regional Government and Area Municipal Government can work together to provide financial incentives for brownfield remediation and redevelopment.

Incentive available: The TIG provides grants for sites in designated Community Improvement Areas that meet the definition of a brownfield to help the remediator recuperate some or all of the clean-up costs, thus clearing the way for future redevelopment

British Columbia

B.C. Brownfield Renewal Strategy

Scheduled for launch in 2009, this intergovernmental initiative is being implemented in partnership with the ministries of Agriculture and Lands, Advanced Education, Community Services, Environment and Finance. The purpose of the strategy is to identify ways to stimulate brownfield renewal across British Columbia.

Funds available: To be determined.

Alberta

Alberta Municipal Affairs

The Alberta Petroleum Tank Site Remediation Program provides remediation grants to municipalities and owners of small retail gas stations with potential contamination from underground petroleum storage tanks.

Funds available: Grants up to $160,000; site owners who paid more than the original grant funding limit in remediation costs may be reimbursed up to the additional amount.

City of Calgary, Rivers District Community Revitalization Tax Levy

Provincial legislation that allows the City of Calgary’s The Rivers District Community to segregate a portion of the property tax revenue generated from The Rivers District properties and directly invest it in brownfields redevelopment within this area.

Tool available:
The community revitalization levy allows for the education portion of the incremental property tax in a designated redevelopment district to be dedicated to the clean-up of brownfield sites.

Manitoba

Community Revitalization Tax Increment Financing Plan (Community Revitalization Fund)

When a property is assigned for "community revitalization", increases in its assessed value are subject to a community revitalization levy. Money raised by the community revitalization levy is to be paid into a new Community Revitalization Fund.

Incentive available:
This fund will be used to make grants to help revitalize communities and neighborhoods (including the clean up of brownfield sites); to encourage economic, social, and cultural development; and to preserve heritage properties.

Quebec

Ministry of Sustainable Development, Environment and Parks

The ClimatSol program encourages the rehabilitation of contaminated lands in Quebec municipalities. It aims to integrate elements within redevelopment projects that will have a real and measurable impact on the reduction of greenhouse gas emissions or that will increase the energy efficiency of buildings.

Funds available: Grants up to $1,000,000.

Nova Scotia

Nova Scotia’s Ecotrust

Nova Scotia’s Ecotrust program supports municipal projects that aim to reduce greenhouse gases and other air pollutants.

Funds available: Grant amounts determined on a per-project basis.

Private sector

Royal Bank of Canada and Canadian Imperial Bank of Commerce

RBC and CIBC have established a risk management system for assessing environmental exposures to all of their lending transactions and project finance products associated with any property, including the development of brownfield properties. In 1991, the banks established the Environmental Risk Management Group to provide risk mitigation services and credit approval support for brownfield sites and other environmental assessment projects.

Funds available: Loan amounts determined on a per-project basis.

Cherokee Investment Partners. LLC

Cherokee Investment Partners, LLC, is a real estate investment firm specializing in the acquisition, remediation, and sustainable redevelopment of brownfields properties. Cherokee launched its first private equity fund in 1996. Since then, Cherokee has raised more than $2.1 billion and cleaned up more than 500 sites in the United States, Canada and Europe.

Funds available: Minimum of $25 million in equity placed in each investment; no maximum limit.

Kilmer Brownfield Equity Fund L.P.

The Kilmer Brownfield Equity Fund is Canada's first private equity fund that specializes in brownfield redevelopment. The pairing of brownfield redevelopment and private equity capital is intended to specifically address the financial barriers that have historically impeded activity on brownfield sites during the site restoration and redevelopment stages.

Funds available: Up to $20 million per project (private developers purchase a brownfield site, remediate it and re-sell it to private developers).

Brownfields Capital

Brownfields Capital is a specialty finance and investment firm that acts as a financial intermediary to deliver investment capital to the brownfields industry. Through Brownfield Value Contracts (BVCs), the firm finances all stages of remediation, development, and construction to end use. BVCs are similar to a corporate bond and specify how the funds generated from the redevelopment of a brownfield property will be allocated to investors and to the ownership entity.

Funds available: Determined on a per-project basis.

Are you aware of other brownfields funding sources? Contact us at 613-907-6334 or at brownfields@fcm.ca.