The organization representing Alberta's towns and cities is making a direct appeal to the federal government, asking it not to impose reductions to a critical municipal funding tool as part of a national housing initiative.
A Plea to Preserve Municipal Funding
Alberta Municipalities has formally requested that the federal government refrain from cutting or redirecting funds collected through municipal off-site levies within its proposed housing grant program. The request was made public on January 11, 2026. Off-site levies are charges that municipalities impose on new developments to help pay for the required surrounding infrastructure, such as roads, sewers, and water lines that connect new neighbourhoods to existing city services.
The core of the argument from Alberta Municipalities is that these levies are essential for facilitating growth. They contend that if the federal government reduces or repurposes this revenue stream through its housing fund, it could severely hamper the ability of cities and towns to build the necessary infrastructure to support new housing projects. In essence, they warn that cutting these funds could paradoxically slow down housing development by making it financially impossible for municipalities to service new lots.
The Critical Role of Development Levies
For municipalities across Alberta, off-site levies are not a discretionary income source but a fundamental component of their capital planning. These fees are legally authorized and are directly tied to the cost of growth. When a developer builds a new subdivision, the levies help cover the capital cost of extending major infrastructure to that area, ensuring existing taxpayers are not solely burdened with the expense of new community expansion.
The concern raised is that any federal intervention that diminishes this revenue would create a significant financial gap. Municipalities would then be forced to either delay crucial infrastructure projects, raise property taxes, or see housing developments stall due to a lack of essential services. The organization's stance highlights a ongoing tension between federal housing targets and the on-the-ground fiscal realities faced by local governments who are responsible for providing the pipes, pavement, and parks that make new homes livable.
Implications for Housing and Infrastructure
This dispute places a spotlight on the complex interplay between different levels of government in addressing Canada's housing crisis. While the federal government seeks to accelerate construction through grant programs, Alberta Municipalities is asserting that undermining existing municipal financing tools is counterproductive.
The outcome of this request could set a precedent for how federal housing funds are administered across the country. If the federal government proceeds with reductions to off-site levy revenues as a condition for grants, other provincial municipal associations may voice similar objections. The situation underscores the need for coordinated policy that supports housing starts without crippling the local government's ability to fund the essential skeleton of new communities. The call from Alberta Municipalities is clear: achieving national housing goals requires partnership, not the diversion of funds that are already committed to making new homes possible.
