Morinville business taxes jump up but remain below the regional and provincial averages

by Colin Smith

Morinville’s non-residential property owners will be paying taxes at a higher rate than homeowners this year following the adoption of a split mill rate as part of the 2019 Budget.

But the ratio of 1:1.1 mills paid on non-residential property for every mill for residential property is still on the low end compared to other municipalities in the region and the provincial average.

For the past eight years and in 2007 Morinville taxed residential and commercial properties the same, while from 2008 through 2010 the ratio was 1:2 or 1:4, so that non-commercial property owners were paying tax at 20 to 40 per cent more than the rate paid by homeowners.

The recent move to a split mill rate is in line with a Long Term Tax Strategy for the Town developed by the Administration last year and approved by Council along with the 2019 Budget.

The plan will see the non-residential property class tax rate rise by .1 each year for five years, resulting in a split mill rate of 1:1.5 residential to non-residential by 2023.

The Town says the rationale for the policy change is that charging the same mill rate for both classes of property is out of line with most Alberta municipalities, which generally charge a considerably higher rate for non-residential.

According to a strategy planning document, splitting the rates, resulting in higher tax payments for non-residential property owners, will help ensure that Morinville’s finances are sustainable and that challenges such as inflation growth, service demands and the cost of the multipurpose recreation facility project can be met.

Statistics contained in a recent report on Alberta’s tax rates by the Canadian Federation of Independent Business (CFIB) show that in 2018 Morinville was the only municipality with a population of more than 5,000 that taxed residential and non-residential property at the same rate.
The province-wide differential averages out to 1:2.49, while for the 13 Capital Region municipalities the average is 1:1.76.

The regional average is down from the highest ratio of 1:2.09 ten years before, although in 2007, when the CFIB began compiling the statistics, the regional average was 1:1.65.

Apart from Morinville, last year Leduc had the lowest tax differential in the region at 1:1.2, while the highest was in Sturgeon County at 1:2.86. Edmonton came in at 1:2.82 and St. Albert at 1:1.4.

The municipality with the highest tax differential in the province was Ponoka County, 1:6.4, followed by Lac la Biche County, 1:6.13. Didsbury’s differential was the lowest, Morinville excepted, at 1:1.

Morinville’s Chamber of Commerce has made its unhappiness with the non-residential property tax rate increase known to Town Council. The CFIB calls for the equalization of property class rates in the name of “tax fairness.”

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