Amenity cost charges

Amenity Cost Charges are a development finance tool that allow local governments to collect funds for amenities such as community centres, recreation centres, daycares, and libraries from new development that results in increased population of residents or workers.

These amenities support livable and complete communities in areas of growth. The amenity cost charge tool contains mechanisms that ensure transparency and cost certainty for developers, local governments, and the public. Amenity cost charges also ensure that new developments contribute to the cost of amenities that serve growing populations and reduce the burden of servicing new development on existing taxpayers.

Establishing amenity cost charges

Amenity cost charges are established by bylaw and may establish charges over the entire local government jurisdiction or specific areas of it. Regular updates to an amenity cost charge bylaw will generally keep the estimates of population growth and amenity costs current and can prevent significant increases in charges. 

To implement an amenity cost charge, local governments will need to:  

• Identify areas where more housing supply is planned (based on official community plans and other planning documents) and what amenities are needed to support that supply. Amenity cost charges would apply to new development in those areas 
• Determine the amenity cost charge amounts following the rules set out in legislation (for example, the capital costs must be allocated between existing users and new users) 
• Consult during the development of the amenity cost charge bylaw and charge rates 
• Pass a bylaw that implements the charges​. Amenity cost charge bylaws do not require the approval of the Inspector of Municipalities. 

Calculating and applying amenity cost charges

Amenity cost charges are calculated as either a jurisdiction wide charge or on an area-specific basis with charges varying based on the cost of providing amenities in each area.  

The amount of an amenity cost charge is determined by dividing the expected amenity costs (required to service the increased population over the amenity cost charge timeframe) by the increase in population that will be served. 

Separate amenity cost charges may be established for different classes of development, for example, residential, commercial, industrial and institutional developments. Amenity cost charges may then be collected from developers either at the time of subdivision approval or at the issuance of a building permit. For more information on the technical requirements for creating amenity cost charges, see the link below to the Amenity Cost Charge Best Practices Guide.

Amenity cost charge reserve funds

Once levied and collected, the amenity cost charges must be deposited into separate reserve funds for each respective area in which amenity costs charges are collected. These reserve funds must be established by bylaw and may only be used for capital costs relating to an  amenity cost charge bylaw. Any interest earned from investments in the reserve funds must be used for eligible amenity cost charge projects.

Exemptions, waivers and reductions

All development within the geographic area of an amenity cost charge bylaw is liable for the charge unless exempted by statute. Such exemptions include places of worship and certain types of residential developments.

• Local Government Act, section 570.4 - Circumstances in which amenity cost charges are not payable

Local governments may also choose to waive or reduce charges for certain types of development, including not-for-profit rental housing, supportive living housing and for-profit affordable rental housing.

• Local Government Act, section 570.6- Development for which charges may be waived or reduced

Allowable interest

It may be necessary for a local government to borrow in order to help finance an eligible amenity cost charge infrastructure project before sufficient funds have accumulated in the reserve fund. In certain circumstances, the interest cost of necessary borrowing may be incorporated into the amenity cost charges. 

When including interest in an amenity cost charge bylaw, consider the guidance set out in the development cost charge interest requirements. Interest included in an amenity cost charge calculation does not require the approval of the Inspector of Municipalities. The provisions for allowable interest for development cost charges are very similar and can be used for a reference.

Learn more about allowable development cost charge interest requirement

Annual Report

In accordance with Section 570.92 of the Local Government Act, local governments collecting amenity cost charges must prepare an annual report of amenity cost charges received and reserve fund balances. The report must include, for each area subject to an amenity cost charge, opening and closing reserve fund balances of each area for which amenity cost charges were collected, the amount of amenity cost charges received and expended, and any waivers and reductions, for the previous year. The report must also include any amenities provided instead of all or part of the amenity cost charge.  The report for a prior year must be made available for public viewing by June 30 each year and be available for at least one year.

• Local Government Act, section 570.92 –Annual amenity cost charges report