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CFIB calling on Alberta municipalities to close property tax gap for businesses

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(Last Updated On: Feb 26, 2019)

A CFIB report on non-residential taxes shows the regional average is 1:1.65.

by Morinville News Staff

The Canadian Federation of Independent Business (CFIB) is calling on Alberta municipalities to “introduce and implement a policy that reduces the commercial to residential tax gap over time to an absolute maximum ratio of 2:1.” The request comes in tandem with the realse of CFIB’s annual Property Tax Gap Report.

Under the Modernized Municipal Government Act, municipalities can charge non-residential property owners five times the rate that residential property owners pay.

In Morinville that ratio has been 1:1 since 2008; however, the 2019 Budget factors a 1:1.1 ratio and a plan to raise that to 1:1.5 over the next five years. On the residential side, Morinville has one of the highest tax rates in the Edmonton Metropolitan Region with a 4 per cent increase approved for the 2019 Budget.

While Calgary tops the CFIB’s list of what they see as the most unfair property tax systems for small business, the average in the Edmonton Metropolitan Region is lower. Calgary’s ratio is 1:4.4, while the average in the Edmonton region is 1:1.65. Sturgeon County has the highest non-residential tax rate at 1:2.86, closely followed by Edmonton at 1:2.82.

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“Too many city governments continue to depend on squeezing more and more property taxes from local businesses to pay for their ever expanding operating budgets. This a risky and unfair strategy, as exposed by the recent situation in Calgary. In the midst of a struggling economy, assessed values for downtown commercial office space have plummeted, leaving small and medium-sized businesses outside the core expected to somehow pick up the tab. Talk about a tough pill to swallow,” says Richard Truscott, Vice-President, Alberta and BC, in a CFIB release Tuesday.

The CFIB report goes on to call on municipalities to “use restraint in municipal operating spending to help bring down the ratio, and eliminate any additional business taxes, as well as the call to cap the tax gap at 2 to 1.

The full report can be found at https://www.cfib-fcei.ca/sites/default/files/2019-02/ab-property-tax-gap-report-2019-final.pdf.

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