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A Guide to

BrownfieldsFinancialTaxIncentiveProgram

For more information contact:

Brownfields Financial Tax Incentive ProgramProvincial-Local Finance DivisionMinistry of Finance10th floor, 777 Bay StreetToronto, ON M5G 2C8Telephone: (416) 327-0274Fax: (416) 314-7670www.gov.on.ca/fin

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© Queen’s Printer for Ontario, 2004Toronto, Ontario09-04-1MISBN 0-7794-7032-X

A GUIDE TO THE BROWNFIELDS FINANCIAL TAX INCENTIVE PROGRAM

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Contents

Introduction 3

How Does this Guide Work? 4

What is Brownfields Remediation? 4

How Does the Brownfields Financial TaxIncentive Program Work? 4

Legislative, Operational and Regulatory ProgramRequirements 5

Step 1: Drafting the Community ImprovementPlan 5

Step 2: Drafting the Municipal By-Law 6

Step 3: Completing the Application Form 9

Step 4: Verifying Program Requirements onthe Application Form 9

Step 5: Forwarding an Application Package tothe Ministry of Finance 13

Step 6: Enacting the Draft By-law 13

Step 7: Providing Tax Assistance to a SubjectProperty 14

Step 8: Terminating Tax Assistance to aSubject Property 19

Further Information 19

Abbreviations and Glossary 20


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Introduction

The Government of Ontario is introducing theBrownfields Financial Tax Incentive Programthat allows municipalities to give taxassistance for the purposes of environmentalrehabilitation of brownfields propertieswithin an approved Community ImprovementPlan (CIP).

The program is part of the Province’s overallcommitment to protect and maintain safe,clean, liveable communities.

Announced in the 2004 Ontario Budget, thisnew financing tool allocates up to $5 millionannually in matching education property taxassistance for the rehabilitation ofbrownfields properties. The goal of this newprogram is to attract third-party funding andencourage clean-up and revitalization ofbrownfields properties by providing taxassistance at the beginning of the clean-upprocess.

Brownfields properties are typically lands onwhich industrial or commercial activity hastaken place. These lands may be vacant,underused or abandoned. Often the soil orwater may be contaminated as a result of pastpractices or uses. Undeveloped areas mayalso become brownfields sites throughenvironmental contamination.

The Brownfields Financial Tax IncentiveProgram is part of the Province’s Places toGrow initiative that encourages investmentand development of existing urban areas inorder to reduce urban sprawl. Growth isencouraged (e.g., through intensification andcompact development) in those areas that canbest accommodate it, thereby steering growthpressures away from the places and systemsin need of protection.

The new financing tool complements existinginitiatives being delivered through theMinistry of the Environment (MOE) topromote cleaner communities and smarterdevelopment by removing key concerns aboutbroad environmental liability, and through theMinistry of Municipal Affairs and Housing(MMAH) to provide authority for CIPsallowing for environmental, social orcommunity economic developmentinitiatives.


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How Does this Guide Work?

This guide is provided to developers, landownersand municipalities to explain how the BrownfieldsFinancial Tax Incentive Program may provide taxassistance for eligible properties in need ofenvironmental remediation. The guide also includesdetails on the program’s application form andlegislative and regulatory requirements as well asoperational program requirements.

Ministry of Finance (MOF) staff have also begun aseries of education and training sessions inpartnership with other ministries and municipalitiesto better inform municipal staff about the potentialof this new financing tool.

Additional program information and sample taxcalculations are included in this guide.

What is BrownfieldsRemediation?

Environmental rehabilitation and development ofbrownfields properties encourages investment anddevelopment in existing urban areas. This type ofdevelopment is therefore in keeping with theProvince’s larger commitment to plan for growthmanagement, by promoting intensification andcompact development, thereby making moreefficient use of existing infrastructure. Greenspaces that would have otherwise been consumedby urban sprawl are preserved to enhance thequality of life for current and future generations.

To address the historical underutilization of theselands, the Government of Ontario passed theBrownfields Statute Law Amendment Act, 2001,which received Royal Assent on November 2,2001. On October 1, 2004, outstanding legislativeprovisions were proclaimed into force, andregulations related to environmental liability(Ontario Regulation 153/04) and the new financingtool (Ontario Regulation 274/04) are now in force.

By amending various existing Acts, theBrownfields Statute Law Amendment Act, 2001addresses three key challenges to brownfieldsremediation highlighted during two years ofconsultations:

■ clarifying environmental liability to reduce therisks of redevelopment;

■ streamlining planning processes to facilitateredevelopment; and

■ providing a new financing tool to provide anincentive for environmental site remediation.

How Does the BrownfieldsFinancial Tax IncentiveProgram Work?

Section 365.1 of the Municipal Act, 2001 allowsmunicipalities to provide municipal property taxassistance for eligible properties. The Minister ofFinance may match the municipal contribution witheducation property tax assistance to parties thatwant to rehabilitate brownfields properties and thatmeet eligibility criteria under the BrownfieldsFinancial Tax Incentive Program. To matchproperty tax assistance contributions frommunicipalities, $5 million per annum has been setaside by MOF.


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Tax assistance under the Brownfields Financial TaxIncentive Program is applied to the costs of siteremediation and is available during therehabilitation and development periods of eligibleproperties. The maximum amount of tax assistanceavailable is the cost of rehabilitating a property.The host municipality is responsible forestablishing and administering the program andwill set the eligibility criteria for tax assistance forthe municipal portion of the property tax.

Applications by municipalities to the Minister ofFinance for matching education property taxassistance for specific properties that satisfyeligibility requirements will be considered on acase-by-case basis.

Legislative, Operational andRegulatory ProgramRequirements

The new financing tool for municipalities under theBrownfields Financial Tax Incentive Program isoutlined in section 365.1 of the Municipal Act,2001. Ontario Regulation 274/04 under subsection365.1(11) of the Municipal Act, 2001 outlinesadditional information requirements formunicipalities applying for matching educationproperty tax assistance from the Minister ofFinance. These information requirements generallyinclude confirmation of eligibility, description ofthe project and estimates of cost.

Landowners wishing to apply for possible taxassistance for their property should contact theirlocal municipality for more information. Programrequirements will vary among municipalities.

The host municipality will determine whichproperties are considered for tax assistance undersection 365.1 of the Act based on circumstancesspecific to local economic conditions and priorities.The Province recognizes that municipalities are inthe best position to understand their own localeconomic conditions and therefore coordinate thedelivery of tax assistance from the Minister ofFinance.

Step 1: Drafting the CommunityImprovement Plan

To qualify for this program, a property must be in adesignated community improvement project areathat is covered by a provincially approved CIPunder the Planning Act. The CIP must containprovisions for tax assistance under section 365.1 ofthe Municipal Act, 2001.

Many existing municipal economic developmentprograms for brownfields properties and abandonedproperties created through CIPs under section 28 ofthe Planning Act require that rehabilitation anddevelopment activities have been completed beforefunds are provided. Municipalities have adoptedthis practice to ensure accountability fromlandowners.

Municipalities are free to continue this practice.However, matching education property taxassistance granted by the Minister of Finance willbe awarded annually each taxation year at the startof the rehabilitation period, for a maximum of threeyears except in some cases with exceptionalcircumstances.

Consequently, matching education property taxassistance may be delivered on a different timetablefrom tax assistance offered by the municipality fora given property.


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Due to the potential differences in municipalpractices and the provincial delivery of matchingeducation property tax assistance, any municipalitydeveloping a CIP should provide recognition in theCIP that conditions imposed by the Minister ofFinance for matching education property taxassistance under section 365.1 of the MunicipalAct, 2001 may differ from those outlined by thehost municipality’s CIP.

Other requirements may be identified on a case-by-case basis during the circulation of the draft CIPand its approval process.

Step 2: Drafting the Municipal By-Law

Municipalities are requiredto draft a by-law (or by-laws) that authorize theprovision of tax assistancefor an eligible propertyunder section 365.1 of theMunicipal Act, 2001. Suchproperties must be withinthe municipality’s CIPduring the rehabilitationand development periods.

The subject property must be specifically identifiedin the draft by-law with its assessment roll number,street address and landowner.

To be considered for matching education propertytax assistance by the Minister of Finance, the draftby-law must contain the following conditions forthe provision of matching education property taxassistance:

■ a clause that states all tax assistance for a subjectproperty will be suspended in cases where alandowner has not paid all of the taxes on asubject property for the previous years in therehabilitation and development periods (subjectto any specific exceptions provided for in theby-law or in an agreement under the by-law);

■ a clause that states all matching educationproperty tax assistance granted during therehabilitation and development periods for theproperty becomes liable for payment in full, withinterest, in cases where the landowner defaultson by-law or agreement requirements; and

■ a clause that requires an annual update of thereporting on environmental contamination,remediation activities, expected costs and timeestimates outlined under Ontario Regulation274/04, and that it be forwarded to the Ministerof Finance within 30 days of the anniversary ofthe start date of the tax assistance.

The draft by-law must alsoprovide for termination ofmatching educationproperty tax assistance forthe subject property at theearliest of the followingdates:

■ the point of severance orsubdivision;

Tax assistance toprovide incentives forenvironmentalrehabilitation is based onthe subject propertyspecified in the draft by-law.

Tip:Copies of anyagreements or othersupporting documentsrequired by themunicipality arerequired to besubmitted with theapplication formatching educationproperty taxassistance. Suchdocuments maybecome public underthe Freedom ofInformation andProtection of PrivacyAct.

Tip:While an individualapplication form isrequired for eachsubject property beingconsidered formatching educationproperty taxassistance, multipleeligible propertiesmay be listed in thedraft by-law.


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In the case of a severance, the subject propertyspecifically approved for tax assistance under aby-law no longer exists as such. TheBrownfields Financial Tax Incentive Programdoes not allow for the automatic roll-over of taxassistance approved in the original by-law toanother property. Also, tax assistance cannot beassigned under the program.

In the draft by-law, the tax assistance should beterminated specifically on the conveyance of anyportion of the property following a severance, orat the date of registration of a final plan ofsubdivision.

■ the point of sale orconveyance;

The BrownfieldsFinancial Tax IncentiveProgram does not allowfor the portability of taxassistance from onelandowner to another,nor does it allow for alump-sum payment to alandowner who sells theproperty during therehabilitation anddevelopment periods.There is no grant authority under section 365.1of the Act.

The decision by the Minister of Finance toapprove matching education property taxassistance under the Brownfields Financial TaxIncentive Program is based not only on theproperty being eligible under this section of theAct, but also on the Minister’s comfort that thelandowner of the eligible property is capable andwilling to undertake the required remediation.These decisions are made on a case-by-casebasis. Municipalities may require agreementssecuring the landowner’s obligations, and theseagreements are personally binding on thelandowner.

In the event of a sale to a new landowner duringthe rehabilitation period, the Minister of Financemust be satisfied that the new landowner iscapable and willing to undertake the requiredremediation. If so satisfied, matching educationproperty tax assistance could be granted underthe program as part of a new application, andnew agreements could be entered into ifnecessary.

Where a sale occurs after rehabilitation activitieshave been completed and a record of sitecondition has been filed, no further matchingeducation property tax assistance will beavailable under the program. The BrownfieldsFinancial Tax Incentive Program is not intendedto provide matching education property taxassistance to a landowner that was notresponsible for environmental rehabilitationactivities.

Municipalities may continue providing taxassistance for municipal property taxes to aneligible property beyond the period authorizedfor matching education property tax assistanceapproved by the Minister of Finance.

Tip:In the case where aproperty is severedand a portion of thelands is stillcontaminated, themunicipality is free tosubmit a newapplication forcontinued matchingeducation property taxassistance under theBrownfields FinancialTax IncentiveProgram.


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■ the date that tax assistance equals accumulatedcosts of contaminant reduction action taken topermit the filing of a Record of Site Conditionfor the property; or

■ the date ending three consecutive years ofmatching education property tax assistance orsuch earlier period otherwise stipulated in themunicipal by-law.

The Minister of Finance is prepared to authorizemunicipal applications for matching educationproperty tax assistance under the BrownfieldsFinancial Tax Incentive Program with adevelopment period of up to 18 months.Combined with the 18-month rehabilitationperiod outlined in subsection 365.1(1) of theMunicipal Act, 2001, this policy means thatmunicipal applications under the program willbe accepted and considered for approval with upto three years of matching education propertytax assistance from the starting date of therehabilitation period.

Applications with longer development periodswill not be approved by the Minister of Financeunder the program unless there are exceptionalcircumstances. Although legislative discretionexists for approval of a longer developmentperiod, a host municipality should present abusiness case explaining its exceptionalcircumstances to MOF staff and outlining itscase that an extended development period isnecessary to offset higher-than-averageestimated eligible expenses for the rehabilitationand development periods and that the extensionis the only reasonable way to achieve successfulrehabilitation of the subject property.

Host municipalities areexpected to work closelywith MOF staff in bringingsuch an application forwardfor approval. Municipalrepresentatives are invitedto contact ministry staff foradditional information onany points of clarificationrequired for theBrownfields Financial Tax Incentive Program.Contact information for the program is includedwith this guide.

Host municipalities providing tax assistance undera CIP may have additional program administrationand reporting requirements that complement theirvarious programs, including specific conditions forthe termination of tax assistance. Provincialrequirements for the draft by-law may also besubject to change at a later date.

Once the draft by-law has been completed, itshould be provided to MOF staff as part of theapplication form for matching education propertytax assistance.

Tip:The municipalityshould also includeany clauses orprovisions in the draftby-law that it feelsappropriate for its ownbusiness purposesand local economicconditions.


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Step 3: Completing the ApplicationForm

The Brownfields Financial Tax Incentive Programapplication form must be completed by the hostmunicipality offering tax assistance to a landowner.The application form is available through the MOFwebsite and Municipal Services Offices (MSOs) ofMMAH.

The host municipality should designate a primarycontact (and a secondary contact as required) whowill be responsible for communication with MOFstaff on particulars of the application process,environmental records, program administration,subject property and tax assistance.

The host municipality should also designate itsprimary contact for the subject property landowner(or agent as applicable).

The host municipality should clearly identify thesubject property on the application form with itsassessment value,1 roll number, tax rate2 andlandowner.

Where applicable, the host municipality shoulddesignate a primary contact at the upper-tiermunicipality who will be responsible forcommunication with the host municipality onparticulars for the application process, programadministration, subject property and tax assistance.

Step 4: Verifying ProgramRequirements on theApplication Form

Applications under the Brownfields Financial TaxIncentive Program must satisfy legislative andother program requirements. Each box on theapplication form should be checked as appropriate.

The host municipality must satisfy thefollowing legislative and regulatoryprogram requirements:

1. The municipality has verified that the subject

property meets the definition of an “eligible

property” under subsection 365.1(1) of the

Municipal Act, 2001.

1a. The property is located within a community

improvement project area in an approved

Community Improvement Plan (CIP) containing

provisions for tax assistance under section 365.1

of the Act. Include the name of the CIP, its

designating CI project area by-law number and

its date of approval.

1b. The subject property has a completed phase

two environmental site assessment and is in

need of environmental rehabilitation, as

described in subparagraph 4i of subsection

168.4(1) of the Environmental Protection Act, on

or before the submission date of the

application.

1 Use the assessment value and tax rate for the currenttaxation year at the time of application. If the assessmentvalue is under a request for reconsideration or appeal tothe Assessment Review Board, use the assessment valuethat was last reported by MPAC.

2 For lower-tier municipalities, the tax rate provided for thesubject property should only include the municipal andeducation tax rates of the lower-tier municipality. In thecase where an upper-tier municipality has agreed toparticipate in the program by way of a council resolution,the upper-tier municipal tax rate for the subject propertyshould be identified in the space provided on the secondpage of the application form.


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2. Attach a copy of the

draft by-law (or by-laws) as

described under

subsections 365.1(2) and

(3) of the Municipal Act,

2001.

The provisions that must becontained in a draft by-law,in addition to anyconditions or restrictionsimposed by agreement withthe host municipality, arelisted in “Step 2: Draftingthe Municipal By-Law”(q.v.).

3. Attach a copy of the

landowner’s application

and program information

submitted to the

municipality.

The host municipality mustinclude a copy of anycompleted application formor program information supplied by the landowneras part of the municipality’s own programrequirements.

4. Attach a copy of any proposed agreement or

undertaking required by the municipality from the

landowner as a condition of matching education

property tax assistance.

In addition to a landowner’s application andprogram information, some municipalities mayrequire a landowner to enter into a legal agreementwith the host municipality or provide anundertaking to receive tax assistance. As part of anapplication under the Brownfields Financial TaxIncentive Program, the host municipality mustinclude a copy of any completed or proposedagreement or undertaking.

5. If the upper-tier municipality is participating,

attach a copy of its council resolution.

A lower-tier municipality wishing to provide taxassistance under section 365.1 of the Act maypetition its upper-tier municipality to participate inthe program by way of council resolution.

Where the upper-tier municipality agrees toparticipate in the Brownfields Financial TaxIncentive Program, the lower-tier municipality mustinclude the upper-tier municipality’s councilresolution to that effect as part of its application toMOF.

Tip:The Minister ofFinance is preparedto authorize municipalapplications formatching educationproperty taxassistance under theBrownfields FinancialTax IncentiveProgram with adevelopment period ofup to 18 months. Anymunicipality wantingto enact a by-lawproviding matchingeducation property taxassistance with alonger developmentperiod should presenta business case toMOF staff outliningtheir case that anextendeddevelopment period isnecessary. Municipalstaff should contactministry staff directlyfor more information.


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6. Attach a description (approximately one page in

length) that details the nature of the subject

property’s contamination and a brief description of

proposed remediation activities and technologies

to be used during the rehabilitation period.

The host municipality must provide a briefsummary of the project that details the projectundertaking, property information and remediationtechnologies in plain language for use by MOFstaff in a review of the application form.

Municipal applications from host municipalitieswill be considered by the Minister of Finance,although MOF staff may work with staff fromMOE and MMAH to provide supportinginformation as required.

Additional information needs for selectedmunicipal applications and their eligible propertieswill be gathered by MOF staff from the primarycontact for the host municipality.

7. Attach an outline (approximately one page in

length) of expected costs that will be incurred

during the rehabilitation and development periods.

8. Attach a time estimate for completion of the

rehabilitation and development periods.

The host municipality must provide an estimate andsummary of the expected costs over the course ofthe project undertaking, as well as a timeline forthose expected costs, using best availableinformation at the time of application.

The host municipality must satisfy thefollowing operational programrequirements:

9. The municipality further agrees, as stated in its

draft by-law, that the information described in the

three previous paragraphs3 shall be updated on an

annual basis during the provision of matching

education property tax assistance by the Minister

of Finance.

10. The municipality understands that the annual

reporting requirements must be forwarded to the

Ministry of Finance within 30 days of the start-date

anniversary for matching education property tax

assistance.

The annual reporting requirement is a requiredcomponent of the draft by-law for acceptance andconsideration by the Minister of Finance under theBrownfields Financial Tax Incentive Program. Theprovision of such annual updates is a condition ofcontinued matching education property taxassistance.

3 The reference refers to the three previous paragraphs onthe application form for the Brownfields Financial TaxIncentive Program.


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11. The municipality is satisfied with all business

materials, financial information and property

records from the property landowner as required

by council.

MOF staff have taken steps through programdesign to ensure accountability for matchingeducation property tax assistance awarded tolandowners in partnership with municipalities.

The municipality must be in a position to indicateits satisfaction with its own due diligence in respectof eligible properties and landowners, as well aswith all conditions imposed by the municipality.The municipality should confirm which of theconditions, if any, have been satisfied.

12. The municipality agrees that a completed

Record of Site Condition for the subject property

will be provided to the Minister of Finance after it

is filed in the Environmental Site Registry.

This program requirement is further to the noticeprovision under subsection 365.1(23) of theMunicipal Act, 2001.

13. The CIP that applies to the subject property

includes a provision that states written approvals

of matching education property tax assistance

from the Minister of Finance may result in

conditions for the provision of matching education

property tax assistance that are different from

those described in a municipality’s CIP.

This section is discussed in “Step 1: Drafting theCommunity Improvement Plan.”

14. The municipality has included a copy of its

designated CIP as approved by the Minister of

Municipal Affairs and Housing and listed in point

1a of this application form.

15. The municipality grants Ministry of Finance

staff the right at all times to inspect the financial

records collected or produced by the municipality

for matching education property tax assistance

purposes under section 365.1 of the Municipal Act,

2001.

16. The municipality understands that the

information contained in this application and all

attachments are subject to the Freedom of

Information and Protection of Privacy Act and has

communicated this point to the landowner. As

such, the application form and its attachments may

be shared with the Ministries of the Environment

and Municipal Affairs and Housing as part of

normal business operations, as well as with legal

counsel and other person(s) connected with the

landowner as necessary for the purposes of

accountability and reporting requirements related

to the Brownfields Financial Tax Incentive

Program.

As part of the Province’s larger commitment toaccountability and transparency, MOF staff may becalled upon to review any of the subject properties,environmental conditions and financial recordscollected or produced by a host municipality underagreement with a landowner or the ministry.

Staff from MOE, MMAH, legal counsel and otherperson(s) connected with the landowner asnecessary for the purposes of accountability andreporting requirements related to the program mayalso be included in such a review.

The findings of any such review are also subject tothe Freedom of Information and Protection ofPrivacy Act.


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17. The municipality has dated and signed this

form as an application for matching education

property tax assistance beginning January 1 of the

following year, with a mailing date on or before

September 1 of the current year.

A standard application deadline of September 1each year allows municipalities to rank variousbusiness proposals within a host municipalityagainst one another on a predictable timeline,which allows a host municipality to select subjectproperties that best match local economicconditions and planning guidelines. Landownersseeking tax assistance from their host municipalitywill also have a firm understanding of the timingnecessary to meet approval requirements created bymunicipal administration.

However, it is important to note that programflexibility and special consideration will be grantedto applications and projects with significantbiophysical and socio-economic impacts.Additional flexibility for this requirement will alsobe considered during the first years of the program.

Host municipalities would be expected to workclosely with MOF staff in bringing an applicationforward for approval outside of the September 1application deadline. Municipal representatives areinvited to contact ministry staff for additionalinformation on this point. Contact information forthe program is provided as part of this guide.

Modification of this operational requirement maybe required at a later date.

Tip:Approval from theMinister of Finance isnot required if theapplication does notinclude a provision toprovide tax assistanceusing the educationportion of the propertytax. However, thereare still informationand reportingrequirements undersection 365.1 of theMunicipal Act, 2001and OntarioRegulation 274/04.

Step 5: Forwarding an ApplicationPackage to the Ministry ofFinance

Completed application forms under theBrownfields Financial Tax Incentive Program willonly be accepted from lower-tier and single-tiermunicipalities. Upper-tier municipalities mayparticipate in the program by means of a councilresolution as described in subsection 365.1(4) ofthe Municipal Act, 2001.

Host municipalities should consider the applicationdeadline of September 1 each year for applicationsunder the Brownfields Financial Tax IncentiveProgram.

Upon submission of an application to MOF staff,municipal applications under the BrownfieldsFinancial Tax Incentive Program will be consideredby the Minister of Finance within 30 days; writtennotification of the ministry’s decision will beprovided shortly thereafter.

Step 6: Enacting the Draft By-law

A host municipalitynotified of a successfulapplication may then enactits draft by-law, therebyenabling the provision oftax assistance for a subjectproperty under section365.1 of the Municipal Act,2001.

A copy of the approved by-law shall, within 30 days,also be provided to thelandowner and the Ministerof Finance as described insubsection 365.1(7).


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Step 7: Providing Tax Assistance toa Subject Property

Matching education property tax assistance grantedby the Minister of Finance is provided on an annualbasis at the start of the rehabilitation period. Thetotal value of matching education property taxassistance is based on a percentage value of the taxassistance awarded by the host municipality on anannual basis during each taxation year for the totallength of the rehabilitation and developmentperiods, regardless of its status as a lower-tier orsingle-tier municipality.

The benefit of this contribution is illustrated in thefollowing examples:


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Example 1:20 Percent Cancellation of PropertyTaxes

The Municipality of Smalltown is a single-tiermunicipality that has applied to the BrownfieldsFinancial Tax Incentive Program for a propertywith a current value assessment (CVA) of$250,000. The property has property tax arrearsof $5,000.

The total tax rate for the property is 5%, withSmalltown’s tax rate for the property at 2.5%and the education tax rate at 2.5%. The totalannual property tax bill for the property is$12,500, with the municipality and schoolboards each receiving $6,250.

The Municipality of Smalltown has agreed tocancel 20% of its existing property tax revenuefor the subject property during the rehabilitationand development periods based on theagreement that the landowner will in turn applythe tax assistance against the property taxarrears. This agreement is consistent withsubsection 365.1(21) of the Municipal Act, 2001.During the rehabilitation and developmentperiods of the project, this cancellation willrepresent $1,250 in municipal tax assistanceeach year, calculated as follows:

MunicipalTaxAssistance = [(CVA x Municipal Tax Rate)

x Municipal Tax Rate Reduction]= [($250,000 x 2.5%) x 20%]= $6,250 x 20%= $1,250

The municipality’s application for matchingeducation property tax assistance for theproperty meets the criteria set out by theProvince under the Brownfields Financial TaxIncentive Program and is subsequently approvedby the Minister of Finance. The Province agreesto provide tax assistance by making a matching20% cancellation in the education portion of theproperty tax during the rehabilitation anddevelopment periods.

During the environmental remediation stage ofthe project, the provincial tax assistance willrepresent $1,250 in education tax assistance eachyear, calculated as follows:

EducationTaxAssistance = [(CVA x Education Tax Rate)

x Education Tax Rate Reduction]= [($250,000 x 2.5%) x 20%]= $6,250 x 20%= $1,250

Combined municipal and education taxassistance provides $2,500 (i.e., $1,250 +$1,250) in total annual tax assistance for theproperty. As per the agreement between themunicipality and landowner, the tax assistance isapplied against the property tax arrears, whichsettles the outstanding taxes in two yearsprovided that property taxes continue to be paidduring the rehabilitation and developmentperiods.


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Example 2:100 Percent Property Tax Freeze

The Municipality of Hill Park is a lower-tiermunicipality that has applied to the BrownfieldsFinancial Tax Incentive Program for a propertywith a CVA of $400,000. Hill Park’s upper-tiermunicipality has declined to participate in thetax assistance program.

The total tax rate for the property is 5%, withHill Park’s tax rate for the property at 1% whilethe upper-tier and education tax rates are 1.5%and 2.5% respectively. The total annual propertytax bill for the property is $20,000, with thelower-tier municipality receiving $4,000, theupper-tier municipality receiving $6,000 and theschool boards receiving $10,000.

The Municipality of Hill Park has agreed tocancel 100% of the increase in property taxesresulting from increased assessment valueassociated with environmental rehabilitation anddevelopment.

Upon completion of the rehabilitation period, theproperty increases significantly in value. Theland has now been selected as the site for a newmanufacturing and processing centre. Now in itsdevelopment period, the property has anassessed value of $537,000. The property is nowgranted a property tax cancellation of 100% ofthe increase in lower-tier property taxes resultingfrom the increased assessment value. This taxassistance will continue until the conditions inthe landowner’s agreement with theMunicipality of Hill Park under the BrownfieldsFinancial Tax Incentive Program are met.

The municipality’s application for matchingeducation property tax assistance for theproperty meets the criteria set out by theProvince under the Brownfields Financial TaxIncentive Program and is subsequently approvedby the Minister of Finance.

The change in assessment value of the propertymeans the landowner receives $1,370 inmunicipal tax assistance from the Municipalityof Hill Park. This tax assistance is calculated asfollows:

MunicipalTaxAssistance = [(New Assessment – Old Assessment)

x Municipal Tax Rate]= [($537,000 – 400,000) x 1%]= [137,000 x 1%]= $1,370

The municipal tax assistance is matched throughthe approval of the Province with acorresponding cancellation of $3,425 ineducation tax revenue resulting from theincrease in assessment. This tax assistance iscalculated as follows:

EducationTaxAssistance = [(New Assessment – Old Assessment)

x Education Tax Rate]= [($537,000 – 400,000) x 2.5%]= [137,000 x 2.5%]= $3,425

Combined municipal and education tax freezesprovide $4,795 (i.e., $1,370 + $3,425) in totalannual tax assistance for the property.


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Example 3:10 Percent Cancellation of PropertyTaxes and 100 Percent Property TaxFreeze

The Municipality of North Brownfield is alower-tier municipality that has applied to theBrownfields Financial Tax Incentive Programfor a property with a CVA of $3,400,000. NorthBrownfield’s upper-tier municipality hasdeclined to participate in the tax assistanceprogram.

The total tax rate for the property is 5%, withNorth Brownfield’s tax rate for the property at1% while the upper-tier and education tax ratesare 1.5% and 2.5% respectively. The total annualproperty tax bill for the property is $170,000,with the lower-tier municipality receiving$34,000, the upper-tier municipality receiving$51,000 and the school boards receiving$85,000.

The Municipality of North Brownfield hasagreed to cancel 10% of its existing property taxrevenue for the subject property during both therehabilitation and development periods and100% of the increase in property taxes resultingfrom increased assessment value. During theenvironmental rehabilitation stage of the project,this agreement will represent $3,400 inmunicipal tax assistance each year, calculated asfollows:

MunicipalTaxAssistance = [(CVA x Municipal Tax Rate)

x Municipal Tax Rate Reduction]= [($3,400,000 x 1%) x 10%]= $34,000 x 10%= $3,400

The municipality’s application for matchingeducation property tax assistance for the

property meets the criteria set out by theProvince under the Brownfields Financial TaxIncentive Program and is subsequently approvedby the Minister of Finance. The Provinceapproves matching education property taxassistance with a 10% cancellation in theeducation portion of the property tax during boththe rehabilitation and development periods and a100% cancellation of the education taxesresulting from increased assessment value overthe length of the assistance period.

During the environmental rehabilitation stage ofthe project, this agreement will represent $8,500in matching education property tax assistance,calculated as follows:

EducationTaxAssistance = [(CVA x Education Tax Rate)

x Education Tax Rate Reduction]= [($3,400,000 x 2.5%) x 10%]= $85,000 x 10%= $8,500

The total annual tax assistance for the propertyduring its environmental rehabilitation equals$11,900 (i.e., $3,400 + $8,500).

Upon completion of the rehabilitation period, theproperty raises significantly in value. The landhas now been selected as the site for a newinformation technology company. The subjectproperty, now in its development period, has anassessment value of $5,200,000. The property isnow granted a property tax cancellation of 100%of the increase in lower-tier property taxes,which is in addition to its annual 10%cancellation of $11,900. This tax assistance willcontinue until the conditions in the landowner’sagreement with the Municipality of NorthBrownfield under the Brownfields Financial TaxIncentive Program are met.

Example continued on next page.


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Example 3 continued:

The change in assessment value of the propertymeans the landowner receives an additional$18,000 in municipal tax assistance from theMunicipality of North Brownfield. This taxassistance is calculated as follows:

MunicipalTaxAssistance = [(New Assessment – Old Assessment)

x Municipal Tax Rate]= [($5,200,000 – 3,400,000) x 1%]= [1,800,000 x 1%]= $18,000

The municipal tax assistance is matched througha corresponding cancellation of $45,000 foreducation tax revenue resulting from theincrease in assessment. This tax assistance iscalculated as follows:

EducationTaxAssistance = [(New Assessment – Old Assessment)

x Education Tax Rate]= [($5,200,000 – 3,400,000) x 2.5%]= [1,800,000 x 2.5%]= $45,000

Combined municipal and education tax freezesprovide $63,000 (i.e., $18,000 + $45,000) intotal annual tax assistance for the property.

The total annual tax assistance after the increasein assessment value is calculated as follows:

TotalAnnualTaxAssistance = [10% cancellation of original property

tax revenue] +[100% cancellation of property taxrevenue resulting from increasedassessment]

= $11,900 + $63,000= $74,900

Lower-tier and matching education property taxassistance equals $74,900 annually, whichcombines both the 10% cancellation of originalproperty tax revenue and the combinedmunicipal and education tax freeze.


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As seen in these examples, the lower-tiermunicipality is in a better position to offer taxassistance on a level closer to single-tiermunicipalities in scenarios where the upper-tiermunicipality chooses not to participate in theBrownfields Financial Tax Incentive Program.

The matching of education property tax assistancebased on a percentage value of the tax assistanceoffered by a lower-tier municipality recognizes thatsingle-tier municipalities do not have to contendwith subsection 365.1(4) of the Act andcooperation from another level of government aspart of negotiations for landowners interested in theprogram.

Additional arrangements for the provision of taxassistance are possible. The examples provided areonly suggestions.

Terms and provisions for the provision of taxassistance will vary among municipalities.Landowners wishing to apply for tax assistanceshould contact their local municipality for moreinformation on possible tax assistance available fortheir property.

Step 8: Terminating Tax Assistanceto a Subject Property

Program requirements for individual municipalitieswill vary, so municipalities are responsible fordeveloping their own arrangements withlandowners, any upper-tier municipality and theProvince.

These municipalities will also have programadministration and reporting requirements thatcomplement their various programs, including thetermination of tax assistance. In most cases, taxassistance will be terminated at a date specified inthe by-law.

In cases where the municipality has provided formatching education property tax assistance, the by-law must also provide for termination of matchingeducation property tax assistance for the subjectproperty at the earliest of a series of conditionsoutlined by the Ministry of Finance.

Further Information

The Province can provide additional information onthe Brownfields Financial Tax Incentive Programto interested municipalities with developmentopportunities and program inquiries. Please directsuch inquiries to:

ATTN: Brownfields Financial Tax IncentiveProgramProvincial-Local Finance DivisionMinistry of Finance10th Floor, 777 Bay StreetToronto ON M5G 2C8

Telephone: 416 327-0274Fax: 416 314-7670


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Abbreviations and Glossary

Application FormThe abbreviated name given to the ApplicationForm for Matching Education Property TaxAssistance under the Brownfields Financial TaxIncentive Program, which acts as a cover sheet fora municipal application for matching educationproperty tax assistance under the program. Theapplication is accompanied by additional requiredinformation.

Community Improvement Plan (CIP)A CIP is adopted by a municipality under section28 of the Planning Act. Where tax assistance isprovided under the CIP, it must be approved by theMinister of Municipal Affairs and Housing.

Host MunicipalityA term used for example and explanatory purposesin this program guide to describe lower-tier andsingle-tier municipalities administering the CIP andtax assistance program for an eligible propertyunder section 365.1 of the Municipal Act, 2001.

MOEMinistry of the Environment

MOFMinistry of Finance

MMAHMinistry of Municipal Affairs and Housing

Phase Two Environmental Site AssessmentPhase Two Environmental Site Assessment for thisprogram has the same definition as listed undersection 168.1 of the Environmental Protection Act:

“an assessment of property conducted inaccordance with the regulations by or under thesupervision of a qualified person to determinethe location and concentration of one or morecontaminants in the natural environment.”

Tax AssistanceTax assistance for this program guide has the samedefinition as listed under section 365.1 of theMunicipal Act, 2001:

“(a) if a by-law made under this section providesfor the cancellation of taxes levied on eligibleproperty, the taxes for municipal and schoolpurposes that are cancelled on the propertyduring the rehabilitation period and thedevelopment period of the property pursuant tothe by-law, and

(b) if a by-law made under this section providesthat the taxes shall not be increased on eligibleproperty, the difference between,

(i) the amount of taxes for municipal andschool purposes that would have been leviedon the property during the rehabilitationperiod and the development period of theproperty in the absence of the by-law, and

(ii) the amount of taxes for municipal andschool purposes that are levied on theproperty during the rehabilitation period andthe development period of the property.”

A Guide to

BrownfieldsFinancialTaxIncentiveProgram

For more information contact:

Brownfields Financial Tax Incentive ProgramProvincial-Local Finance DivisionMinistry of Finance10th floor, 777 Bay StreetToronto, ON M5G 2C8Telephone: (416) 327-0274Fax: (416) 314-7670www.gov.on.ca/fin

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