Most cities in Canada still have access to more traditional sources of financing at a reasonable cost, suggesting limited usefulness of TIFs in the near term. Asset-backed loans could offer another reasonable source of funding for municipalities without all the complexities or costs associated with TIFs. But, even these instruments would have limitations when it comes to brownfield developments, since land property assessments would not be sufficient to finance clean-up and development costs.
Over the longer run, the enormous need for cities to invest in deteriorating infrastructures on the heels of a decade of neglect may force Canadian cities to resort to more expensive forms of financing, perhaps opening the door for more creative solutions like TIFs. And, while the U.S. experience shows that TIFs on their own are no magic bullet to the infrastructure financing problems faced by municipalities, they could be a useful tool in the municipal fiscal arsenal.