IT IS THEREFORE RESOLVED THAT that the Alberta Urban Municipalities Association request that the Government of Alberta make the appropriate regulatory and legislative amendments to allow non-profit housing organizations, foundations, authorities, and other similar entities to borrow directly from the Alberta Capital Finance Authority.
WHEREAS Section 21 of the Alberta Capital Finance Authority Act provides that: 'The business of the corporation (the Alberta Capital Finance Authority, stated hereafter as the corporation) is to provide local authorities that are its shareholders with financing for capital projects';
WHEREAS Section 32(1) of the Alberta Capital Finance Authority Act provides that a local authority may borrow money from the Corporation in any form or manner and on any terms that are acceptable to the Corporation;
WHEREAS Section I(g) of the Alberta Capital Finance Authority Act defines local authority as: 'a city, an educational authority, a health authority, a municipal authority, regional authority or a town' and does not include housing foundations and other non-profit housing organizations;
WHEREAS Section 271 (c) of the Municipal Government Act states that the Minister of Municipal Affairs may make regulations respecting how debt limits for a municipality are determined;
WHEREAS the Minister of Municipal Affairs has established Alberta Regulation No. 255/2000 for the purpose of calculating the debt limit of a municipality;
WHEREAS the stated mission of the Alberta Capital Finance Authority is: 'To provide local authorities within the Province with flexible funding for capital projects at the lowest possible cost';
WHEREAS housing foundations and non-profit housing organizations are created for the public benefit to deliver affordable housing options and deliver a public good;
WHEREAS a portion of the debt associated with all of these foundations and non-profit organizations currently resides within various municipalities' debt;
WHEREAS municipalities incur debt to both address significant deferred maintenance and infrastructure deficits and invest in the infrastructure required to ensure the sustainability and viability of these foundations and non-profit organizations; and
WHEREAS Alberta’s Provincial Affordable Housing Strategy focuses on a sustainable systems so housing providers can better support Albertans if the housing system is financially sustainable.
As housing foundations and similar non-profits seek to address affordable housing pressures for seniors and other vulnerable groups, their efforts are being limited through provincial regulatory and/or legislative barriers for debt financing. While they are providing a much-needed public service and are capital intensive, they are excluded from applying directly to the Alberta Capital Finance Authority for debt financing.
Without access to such debt financing, these organizations may seek funding indirectly through agreements with local authorities such as municipalities. As these arrangements impact municipalities' provincially established debt limits, housing foundations and similar non-profit affordable housing organizations face municipally imposed limits on their borrowing capacities, which impacts the ability of foundations to fulfil their mandates.
This proposed resolution seeks to remove these regulatory and legislative barriers and support the appropriate and efficient development and maintenance of affordable housing options throughout the Province of Alberta.
The provincial response to the resolution indicates the province is not willing to alter the AFCA’s mandate to allow it to lend to non-profit housing organizations, as this would be administratively cumbersome and would require the AFCA to bear a substantially greater risk of loss.
Following the receipt of the provincial response, the Safe and Healthy Communities Committee met with the President of the AFCA, as well as representatives from the municipalities that sponsored the resolution. Following this discussion, it was determined that AUMA would work the resolution sponsors and the AFCA to clarify what is meant in the resolution by “housing authority”, and request a meeting with the Ministers of Finance and Municipal Affairs, as well as the AFCA, to further discuss this issue, as the AFCA appears to be willing to support the resolution provided municipalities bear the risk of loss. As a result, the Safe and Healthy Communities Committee recommended that the status of the resolution be updated to "consider".
AUMA administration met with ACFA and Gary Sandberg, ADM of Municipal Services and Legislation with Municipal Affairs, to further discuss this issue. ACFA and Municipal Affairs are willing to explore exempting affordable housing debt from municipal debt limit calculations provided AUMA can demonstrate that the inclusion of affordable housing debt in these calculations is a barrier to developing affordable housing for a significant number of municipalities. AUMA will undertake further research to determine whether a business case can be made for this exemption.