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| Executive
Summary
" Across
Canada, as in most countries, contaminated land lies unused
and unproductive. Such sites, known as brownfields, may have
the potential for rejuvenation, bringing both health and economic
benefits to local communities. Therefore, responding to the
Government, the NRTEE has agreed to develop a national brownfield
redevelopment strategy in order to ensure that Canada is a
global leader in remediation."
December
2001 Federal Budget |
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The
Vision
The transformation of Canada's brownfields into economically
productive, environmentally healthy and socially vibrant centres
of community life, through the coordinated efforts of all levels
of government, the private sector and community organizations.
Canada's Brownfields: Legacy and Opportunity
Brownfields are a legacy of a century of industrialization-they
are abandoned, idle or underutilized commercial or industrial properties
where past actions have caused known or suspected environmental
contamination, but where there is an active potential for redevelopment.
There may be as many as 30,000 such sites in Canada.
They include decommissioned refineries, former railway yards, old
waterfronts and riverbanks, crumbling warehouses, abandoned gas
stations, former drycleaners and other commercial properties where
toxic substances may have been used or stored. Left idle and unmanaged,
brownfields represent a significant loss of economic opportunity.
They adversely impact a neighbourhood's image and quality of life,
and in some cases pose risks to human health and the environment.
Brownfields also represent an untapped opportunity
to revitalize older neighbourhoods and generate wealth for communities.
With the right kind of incentives and partnerships, brownfields
can have a bright future. Already, several thousand contaminated
sites have been cleaned up in Canada, creating tens of thousands
of jobs, millions of dollars in additional property taxes and thousands
of new housing units. With the package of supportive measures outlined
in this national strategy, Canada's nascent brownfield redevelopment
industry could evolve rapidly into a business worth many billions
of dollars a year.
In addition to direct commercial benefits realized
by the developers and users of the land, brownfield redevelopment
within cities (instead of the development of so-called "greenfield"
land on the city's periphery) has the potential to generate up to
seven billion dollars a year in public benefits in Canada.*
These public benefits arise through the increased economic productivity
of surrounding land, increased tax revenues, lower municipal infrastructure
costs, reduced health risks, preservation of agricultural land,
less air pollution and improved neighbourhoods.
The
Benefits of Brownfield Redevelopment: Helping Build Sustainable
Communities
The case for redeveloping Canada's brownfields is
strong. Experience with brownfield redevelopment in Canada, the
United States and Europe suggests that, while specific circumstances
may vary, significant benefits are consistently seen in the following
areas:
- Economic benefits:
- creation and retention of employment opportunities
- increased competitiveness for cities
- increased export potential for Canadian cleanup
technologies
- increased tax base for all three levels of
government.
- Social benefits:
- improved quality of life in neighbourhoods
(people can live closer to work and recreational facilities)
- removal of threats to human health and safety
- access to affordable housing.
- Environmental benefits:
- reduced urban sprawl pressures on greenfield
sites around a community
- restoration of environmental quality in the
community
- improved air quality and reduced greenhouse
gas emissions in urban areas.
The
Case for a National Strategy: Challenges Facing Brownfield Redevelopment
The case for a national strategy for brownfield redevelopment
focuses on that large group of brownfields where both cleanup costs
and the potential for redevelopment are high. Brownfields in this
group are likely to be found in established urban areas and along
transportation corridors, where municipal services are readily available.
The market value of the land itself, once cleaned up, may be slightly
above or slightly below the combined cost of land plus cleanup.
However, a number of challenges, individually and
in combination with one another, serve to keep such sites abandoned
or idle, with little prospect of remediation or reuse without strategic
intervention. These challenges typically reflect failures in the
market. When markets fail, or are imperfect, those actions that
would be expected to increase the collective national wealth do
not take place. In the case of brownfields, the most significant
market failures preventing redevelopment include:
- lack of access to capital
- regulatory liability risk
- civil liability risk
- limited access to insurance protection
- regulatory delays
- stigma and risk perception
- lack of awareness among many key public sector
and private sector groups.
A national strategy must tackle these market failures
head on, adopting specific actions targeted at overcoming specific
failures, to bring these brownfields back into the marketplace and
back to life in Canadian communities.
All participants in the brownfield redevelopment process,
public and private sector, must participate if such a strategy is
to succeed. Public sector-led initiatives are central to efforts
aimed at overcoming the market barriers, and in particular those
of bridge financing and uncertainty around liability.
Making
Progress
Canada's experience with brownfield redevelopment
stems from a limited number of impressive initiatives in several
provinces and municipalities. These initiatives can serve as the
foundation of a more comprehensive, coordinated national strategy.
For example:
- In 2000, the federal government established the
Green Municipal Enabling Fund, administered in partnership with
the Federation of Canadian Municipalities, which can provide grants
of up to $100,000 for community brownfield inventories and assessments
of development and policy options.
- The provinces of Ontario and Quebec have introduced
legislation specifically directed at promoting brownfield redevelopment
by addressing key barriers to redevelopment.
- Quebec has established a highly successful funding
incentive program for brownfield redevelopment, Revi-Sols, which
provides grants to communities to cover the costs of studies leading
to rehabilitation work, as well as the actual costs of rehabilitation
work.
- Municipal governments in several provinces, including
Hamilton, Ontario, with its innovative Environmental Remediation
and Site Enhancement (ERASE) Plan, have demonstrated their capacity
to be the "on the ground" leaders in developing and
delivering brownfield redevelopment initiatives, forging community
partnerships involving governments and the private sector.
Strategic
Directions: A Blueprint for Action
The national brownfield redevelopment strategy seeks
to:
- put in place the essential building blocks of
a coordinated, comprehensive national approach to cleaning up
and redeveloping brownfields in Canada
- build on recent initiatives in several provinces
and Canadian communities to promote brownfield redevelopment across
the country as a practical tool for sustainable development
- engage the full spectrum of public, private and
community interests involved in community development
- address the priority challenges to brownfield
redevelopment through a mix of policy instruments targeted at
specific market failures
- focus efforts on the "middle tier" of
brownfields, where strategic public sector initiatives are needed
to achieve redevelopment.
The strategy proposes actions under three strategic
directions for transforming brownfields into vibrant centres of
community life (see Table
E-1 for a summary). Detailed proposals and a rationale are
presented under each recommendation. The recommendations represent
a package of initiatives that address key market barriers to brownfield
redevelopment.
Strategic
Direction 1: Applying Strategic Public Investments to Address Upfront
Costs
Publicly funded financial incentives represent a strategic
investment in the future of brownfield sites and their communities.
The recommended actions under Strategic Direction 1 seek to:
- apply strategic public investments, by removing
tax impediments and providing loans, grants and mortgage guarantees,
to lever private capital and overcome the barriers in the market
to accessing capital for the early stages of redevelopment
- establish an effective mechanism through which
the federal, provincial/territorial and municipal governments
can provide financial incentives to qualifying brownfield redevelopment
projects.
Strategic
Direction 2: Establishing an Effective Public Policy Regime for
Environmental Liability and Risk Management
Effective liability protection for participants in
brownfield redevelopment is a cornerstone of a successful long-term
national strategy for revitalizing Canada's brownfields. The recommended
actions under Strategic Direction 2 seek to:
- provide all participants in brownfield redevelopment
with a clear, fair and consistent public policy regime to bring
greater certainty and efficiency to questions of liability and
risk management
- promote a coordinated effort on liability and
risk management among all levels of government.
Strategic
Direction 3: Building Capacity for and Community Awareness of Brownfield
Redevelopment
Successful brownfield redevelopment projects are built
around community awareness, support and skills. The recommended
actions under Strategic Direction 3 seek to:
- enhance capacity at all levels to facilitate brownfield
redevelopment
- build awareness among all partners of the benefits
and challenges of brownfield redevelopment
- build shared objectives around a common vision
of transforming brownfield sites into active centres of community
life
- forge partnerships based on community involvement
and support.
The
Leadership Challenge
The experience with brownfield redevelopment in Canada,
the United States and other countries demonstrates that the single
most essential ingredient to success is public sector leadership.
Each level of government has a unique and essential role to play.
In this regard, the federal government has a unique responsibility-and
a unique opportunity-to launch the national strategy and begin the
transformation of Canada's brownfields into special places in Canadian
communities.
Recommendations relating to leadership fall into two
key areas:
1. Government Support for a National Strategy
That the federal government stimulate action on brownfield
redevelopment by adopting the strategy and implementing the measures
under its jurisdiction as quickly as possible, including measures
such as:
- establishing a federal office to coordinate the
participation of various federal departments and agencies in the
strategyn implementing appropriate financing measures (proposed
under Strategic Direction 1)
- moving to harmonize compliance with federal and
provincial requirements
- promoting a coordinated national effort on brownfield
redevelopment by encouraging other jurisdictions to match federal
initiatives, where applicable, and to undertake complementary
initiatives within the framework of a national strategy.
That provincial governments move toward establishing
multi-faceted programs with essential elements geared toward:
- providing financial support to local government
and private redevelopment efforts
- ensuring legislation is in place to enable municipalities
to offer a full suite of incentive programs and other measures
to promote brownfield redevelopment
- adopting consistent provincial or regional risk
assessment protocols and providing the infrastructure necessary
for efficient risk assessments
- rationalizing liability regimes conducive to stimulating
redevelopment.
That municipal governments continue to play a pivotal
role in the delivery of a brownfield redevelopment strategy and
tools by:
- establishing local redevelopment priorities
- simplifying and facilitating development and building
approvals for brownfields
- redeploying municipally held brownfields by returning
them to the marketplace
- providing financing and planning incentives to
qualifying projects.
2. Governments' "Own House in Order"
That the federal government maintain and enhance its
redevelopment program for federally owned brownfield sites, such
as military sites, railway lands and ports.
That the federal, provincial and municipal governments
establish a policy that, when any property is purchased for their
own use, brownfield sites should be given priority over greenfield
sites.
Implementing
the Strategy
A flexible, phased-in approach is called for in implementing
the strategy, recognizing that some provinces and municipalities
have well-established brownfield initiatives while many do not,
and that not all the recommended actions can or should be undertaken
immediately. The goal should be to build on the progress and successes
to date, develop momentum, awareness and support, and strengthen
the program over time. The approach should encompass two phases:
- a "quick start" phase during which governments
at all levels signal their support for the national strategy and
look to those recommended actions that could be undertaken or
initiated relatively easily and quickly, including amendments
to the Income Tax Act
- a longer-term phase during which governments and
others can address areas that take some time, such as changes
in legislation relating to liability, training and longer-term
capacity-building
initiatives.
Table
E-2 summarizes how the recommendations outlined in this
national strategy could be structured within a phased approach.
As the strategy matures, governments could strengthen
the national strategy in response to the experience gained in the
first few years. For example, a wider range of communities and interests
could be encouraged to participate in brownfield redevelopment.
As well, a broader mix of policy instruments could be applied, building
on innovations in Canada and other countries.
Table
E-1 -- Summary of National Strategy Recommendations
Table
E-2 -- Implementing the National Strategy on Brownfield Redevelopment:
Possible Phasing in of Recommended Actions
Endnote
Hara Associates, "Estimate of National Public
Benefits from Canadian Brownfield Redevelopment", backgrounder
prepared for NRTEE, 2003.
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