North Cowichan CAO Ted Swabey said the challenge the municipality is facing to meet the infrastructure demands of upcoming development is one of the most pressing issues he has seen during his eight years working in North Cowichan, and 35 years in local government, he told council at its meeting on Feb. 5.
He said the large number of applications for development North Cowichan is currently dealing with, partly the result of the province’s Bill 44, which was implemented last March and requires local governments to update their zoning bylaws to allow for more housing units and higher densities, means that costly infrastructure upgrades, particularly to water and sewer systems, are required and funding sources must be identified to move them forward.
Swabey said there are more than 370 development applications in progress in North Cowichan at this time, representing more than 10,000 new housing units which would double the number of households in the municipality.
“However, we currently have the capacity to service only 4,200 new units, and these 4,200 units represents 20 years of growth based on historical patterns,” he said.
“It also means that we can’t advance the additional 6,000-plus units, and many other properties that are zoned for development in the community.”
Swabey said there’s an expectation in the development community that once a development application moves through North Cowichan’s approval process, servicing will be available to support it.
He said that, moving forward, the municipality must be clear with developers and investors that their projects can’t proceed unless they are willing to fund the necessary infrastructure to service their developments.
“While the issue is somewhat theoretical, since we can’t predict when the pace of development or where it occurs, we do have a legal obligation to ensure that the servicing is in place,” he said
“Other municipalities that didn’t catch this issue early enough are now facing legal challenges. The reality is that we have now reached the point where all of our servicing capacity has been maximized and we now need to find viable solutions and a way forward. This takes time and, of course money, lots of money, to achieve the upgrades that we need.”
Swabey said the estimated total upgrade of all North Cowichan’s servicing systems that will be needed to meet future development needs has been estimated at approximately $359 million.
He said that without solutions and a plan of action, it could mean a local landowner or developer wanting to build even a modest amount of housing for their family could face several millions of dollars in infrastructure costs to fund costly pump stations, reservoirs, and/or trunk-main upgrades, making their projects economically unfeasible.
“It could mean that a major industrial or commercial employer looking to relocate in our industrial areas would have to look elsewhere due to our lack of servicing capacity,” Swabey said.
“It could mean a loss of economic benefits, including local employment opportunities in construction, property tax revenues to help address budgetary challenges, and community amenities such as parks that won’t get realized.”
Swabey said staff have developed a robust strategy to manage this issue, which includes transparent and early communications with development applicants about servicing challenges and the infrastructure requirements, proposed bylaw amendments to limit North Cowichan’s municipal liability, and a review of all development applications to determine if some can be deferred to free up servicing capacity.
He said the next step in efforts to deal with the issue is for staff to return to council in a future meeting and seek direction on where North Cowichan should focus its efforts, recognizing that all the major growth areas identified in the municipality’s official community plan are impacted by the infrastructure requirements to a varying degree.
“Difficult decisions will need to be made by council as there is only three sources of funding for infrastructure; grants from higher levels of government, developers and the local taxpayers who are already facing financial pressures,” Swabey said. “We’re already hearing from all three groups that they can’t bear to pay for the infrastructure. Meanwhile, unprecedented economic uncertainty is growing internationally with trade tariffs, which some have called economic warfare.”
As well, Swabey said North Cowichan’s application for $16.4 million from the Canada Mortgage and Housing Corporation’s Housing Accelerator Fund, that would have helped pay for infrastructure costs, has been denied.
“Additionally, the province is projecting a $10.9 billion deficit in the 2025 budget and did not provide relief for local governments, not to mention all the other challenges faced by local governments,” he said.
“This makes it very difficult to predict what will happen locally here in North Cowichan and this means we must prepare to tackle this problem on our own for the foreseeable future. There are many decision for council to make moving forward.”
Mayor Rob Douglas acknowledged North Cowichan is obviously in a tough spot right now as a municipality, as is its council.
“But if we’re going to make the right decisions moving forward, we need to be informed of what our options are, and the analysis that staff are providing us is going to ensure we’re on the right path,” he said. “I’m looking forward to discussing this further in future meetings around this table.”
