DCC Bylaw 4724 Review

Please submit any comments on DCC Bylaw 4724 to gbuxton@salmonarm.ca or to the City via mail at P.O. Box 40, Salmon Arm, V1E 4N2.

The City will be hosting public engagement workshops in January 2026. Dates and times will be announced shortly.

Development cost charges (DCCs) are fees levied on new development to help finance the construction of new infrastructure that will accommodate community growth. See below for more details.

Development Cost Charge (DCC) Bylaw No. 4724 proposes a four-year phased approach to increasing DCC rates. This is to allow more time for the construction industry to adjust to the increases, and not hinder future development. DCC rates across all land uses are proposed to increase as shown in the summary table below.

Proposed DCC Rates & Rate Increases Over Four Year Period (2026-2029)

The existing DCC Bylaw No. 3600 was approved in 2007 and last revised in 2017. Typically DCC bylaws are reviewed every 3-5 years to ensure that construction cost estimates remain current, so the review in 2025 is very timely.

The increases in rates over the four year period range from 8% (for high density residential development) to 71% (for industrial development).

The rate changes are achieved through adjustments to the Municipal Assist Factor (MAF)(the City’s contribution), which represents the relative contribution to the overall costs of each infrastructure project by the City. By increasing the MAF (municipal contribution) the rate increases have been moderated. The current DCC Bylaw 3600 largely utilized a 1% MAF rate. If this rate was used in the new DCC Bylaw 4724, the rates would have increased by between 158% and 439%, and would inhibit new development. The MAF rates utilized in the new DCC Bylaw 4724 range between 15% and 75% in year one, and 20% and 67% in year four. The MAF rates generally decrease over the four year period, resulting in higher developer contributions over time.

The “Low Density Residential” rate is the rate that would be paid by single detached dwellings (and would include a secondary suite within the dwelling).

The “Medium Density Residential” rate would include duplexes, and ground accessed triplexes, fourplexes and townhouses, and any detached accessory dwelling units (e.g. garage suite, carriage home, garden suite). All Small Scale Multi Unit Housing (SSMUH) units would be captured by the “Medium Density Residential” rate.

The “High Density Residential” would include all other higher density residential development, principally apartments.

Use of the higher municipal contribution to mitigate these developer contribution portion of the DCC rates does mean that a greater burden of the overall DCC eligible capital costs would be moved to the municipal taxpayer. The table below indicates the effect.

DCC Eligible Costs - Municipal Contribution

Of the total $129M in total project costs, using the proposed MAF rates means that about $50M could be funded through developer contributions, and $80M will need to be funded by municipal contributions, either from reserves, taxation or borrowing. For comparison, using the 1% MAF previously considered (and resulting in the very high rate increases), the municipal contribution was $24.2M.

This does not create an automatic $80M expense for the City. Any municipal contributions are dependent on a future Council approval for the particular DCC project. The decision of how those costs are funded would be made by Council at the time of the decision regarding that particular project.

Financial Reserves:
The City’s DCC reserves at the end of the 2024 financial year were as follows:
        Drainage            $2,522,825
        Parks                $1,018,641
        Water                $4,973,703
        Sewer                $4,854,661
        Roads                $2,743,529
        TOTAL                $16,113,359

What are Development Cost Charges?

Development cost charges (DCCs) are charges levied on new development to pay for new infrastructure needed to accommodate growth. They are the most effective means of new development providing funding to pay for new infrastructure (a “growth pays for growth” approach). Development cost charges are levied to fund major infrastructure projects, such as new major roads, and expansions to the water treatment plant or the water pollution control (sewer treatment) centre. Development cost charges for developers and builders are required in addition to the developer provided water and sewer extensions for each specific development and road improvements adjacent to each specific development (often called “frontage” improvements).

DCCs can only be levied for the following infrastructure:
•    sanitary sewer;
•    water;
•    drainage;
•    roads;
•    parklands; and
•    police and fire services facilities.

Development cost charges are a cost recovery program. Provincial legislation, regulations and Best Practice Guides provide direction on how to levy DCCs, and require that DCCs not prevent new development. The Bylaw must be approved by the Provincial Inspector of Municipalities.

The graphic below illustrates a brief summary of the factors that are included in generating DCC rates.

Factors in DCC Rates

The factors are community and project specific; therefore, comparisons to DCC rates of other neighbouring communities provide limited usefulness (”apples to oranges” comparisons). The proposed rates for the residential DCCs in Bylaw 4724 put Salmon Arm in the middle of a comparison of neighbouring communities.

Provincial legislation prohibits a Council from waiving DCCs, except for the following:
•    Buildings used for public worship (churches);
•    Very small dwelling units below 29m2 (300 square feet) in size;
•    Applications less than $50,000 in construction value;
•    When no new infrastructure burden is created (e.g. an existing dwelling unit is replaced or is not connected to municipal infrastructure);
•    When DCCs have already been paid.

Provincial legislation also provides for protection of “in stream,” applications, essentially allowing for up to a year from the adoption of a bylaw for a developer to pay the rates at the time of their application, and not the higher rates. Developers will still be able to pay DCCs through installments when the total amount owing is more than $50,000.

See the December 8, 2025 Staff Report to Council for more information.

See the DCC Background Report for a list of the infrastructure projects included under DCC Bylaw 4724.