Like "a blue box for real estate," Canada's contaminated urban lands represent an opportunity to help the environment, remove health and safety risks, slow down urban sprawl and pump thousands of dollars into local economies, says David McGuinty, president and CEO of the National Round Table on the Environment and the Economy (NRTEE).
The government-appointed think group recently released a strategy for cleaning up these brownfields, which include decommissioned refineries, old railway yards, former gasoline stations and drycleaners, old warehouses, and other properties where toxic substances were used or stored. The strategy focuses on sites that are located in urban areas, where municipal services and transportation corridors are already in place.
While many of these sites are in prime real estate areas, they have been sitting unused because of economic and regulatory hurdles facing developers. Civil and regulatory liability risk, lack of access to capital, and stigma and risk perception are some of the reasons why developers have stayed away from the brownfields.
"The key to unlocking the economic potential of these lands is changing the rules," says McGuinty. "The package of incentives, regulatory changes, and partnerships we recommend would stimulate Canada's nascent brownfield redevelopment sector and allow it to become a multi-billion-dollar-a-year industry."
The report says the public benefits of redeveloping the sites would be between $4.6 billion and $7 billion a year, not counting the direct commercial benefits realized by the redevelopers and users of the land. It also doesn't include an expected increase in property values for the neighbouring communities.
McGuinty adds that a recent U.S. study shows that redevelopment of one hectare of brownfields means that 4.5 hectares of greenfields are not required for the same purpose.
NRTEE's proposals require a co-ordinated effort from all levels of government, the private sector and community organizations. The federal government and the provinces currently don't see eye-to-eye on major issues such as health care spending, so getting them to co-operate on a brownfields strategy may be difficult. But McGuinty says, "This realistic, practical and innovative plan can establish Canada as a global leader in land rededication."
The strategy calls for governments to remove tax impediments and provide loans, grants and mortgage guarantees for private and public sector redevelopers, to provide money for site assessment and cleanup. It says the government should "set out a clear, fair and consistent public policy regime to bring certainty and efficiency to liability and risk management. This would protect redevelopment players (landowners, developers, lenders, insurers and municipal governments) from the open-ended liability that presently is a barrier to redevelopment."
The strategy also says that community awareness must be built to create an expedited approval process for redevelopment projects.
NRTEE's report says the economic benefits of spending on brownfield redevelopment are up to 3.8 times more than investing in any other sector. Benefits include new jobs and economic activity, increased tax base for all levels of government, increased competitiveness for cities and export potential for cleanup technologies.
"This is a bold departure from the status quo," says Angus Ross, who chaired NRTEE task force. "It presents governments and private sector players with a chance to step outside the box that has imprisoned these sites' potential."
Several provinces and municipalities have already taken steps to encourage brownfield redevelopment. Quebec has a program that provides grants for site studies, and both Quebec and Ontario have legislation in place that is designed to reduce regulatory barriers to redevelopment. But the strategy says that is not enough, and that "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 Canada's communities."