by Colin Smith
Morinville holds a virtuous first place among Alberta municipalities for fair business tax rates, according to the Canadian Federation of Independent Business.
The CFIB released Dec. 7 Entrepreneurs Deserve Property Tax Fairness, a report targeting the “property tax gap,” the difference between residential owners pay and what commercial property owners are paying.
Its findings indicate that on average commercial property owners in Alberta pay almost two and a half times as much, based on the same assessed value of property.
In 2014, the differential between commercial and residential property tax mill rate was 2.43 in 2014, down slightly from 2.45 in 2013.
However, in Morinville there is no tax gap, as the rate of tax on residential and commercial properties is the same. That results in a rating of 1.00, which it shares with High River.
“Many local governments are currently deliberating municipal budgets and the property tax hikes that seem to inevitably come along with it,” stated says Amber Ruddy, CFIB’s Alberta provincial affairs director.
“Unfortunately, far too few municipal governments seem to be taking Alberta’s current economic climate into consideration. There is only so much independent business owners can take on the chin before they reach a breaking point.”
The report analyzes residential and commercial property tax rates levied by Alberta’s 86 municipalities with populations greater than 5,000 from 2003 to 2014, the most recent data available province-wide.
Morinville neighbour Sturgeon County has a tax gap of 2.79, while St. Albert is at 1.42.
Among Alberta’s 18 cities, Calgary and Edmonton have gaps of 3.73 and 2.65 respectively. According to the CFIB, while Calgary has a bigger gap, Edmonton residents and businesses pay substantially more on the same assessed value.
The County of Wetaskwin No. 10 is identified in the report as the worst property tax offender in the province, with a gap of 6.75, which is actually down 1.69 points from the previous year
A county residential tax bill on $100,000 of assessed value would be $193, while businesses would pay $1,305.
The CFIB is recommending that provincial and municipal governments take steps to make the property tax system “more balanced” over time:
Introducing legislation to put a cap on the maximum tax gap allowed;
Reduce the tax gap through restraint in operating spending; and
Hold operating spending growth to no more than the rate of inflation and population growth.
“Mayors and councils must hold to line on property taxes. Anything short of that demonstrates their priorities don’t align with the current challenges entrepreneurs are facing,” stated Ruddy.
The property tax report is available at www.cfib.ca/ab.
This past September the CFIB issued a report denouncing what it called municipal overspending in Alberta, said to amount to $13.8 billion since 2003, and $2.9 billion in 2013 alone.
The report gave the province’s municipalities a numerical ranking from 1 to 180. The higher the number, the worse the municipality is considered to be overspending. Morinville received a score of 90, compared to 78 for Redwater, 67 for Sturgeon County, 57 for Gibbons, 53 for Bon Accord and 38 for Legal.
These ratings are based on the concept that sustainable government spending involves holding operating spending in line with population and inflation growth.