Premier's Remarks at ABmunis

I'm seeing lots of conversation about this article coming out of the Alberta Municipalities conference this week. Speaking for me only, my personal opinion: while I disagree with this idea, I sure appreciated the conversation it was wrapped up in.

These comments by the Premier took place during an informal Q&A. This is the second time this year that the Premier has made herself available like this to Alberta Municipalities members. Over the past few years, I don't feel that municipal leaders have been particularly listened to by the provincial government. So I VERY MUCH welcome the Premier starting to get more engaged with us. Including being willing to informally bat ideas around with us.

During her time on stage, the Premier indicated that the province won't be pursuing collecting income taxes like it had previously considered (which I was glad to hear!). This is because it was determined that having both a federal and a provincial Revenue Agency would lead to a whole lot of wasted money. But it got the Premier thinking: would it also save money to consolidate all municipal tax departments into a single tax collection agency, where the province collected all property taxes and then disbursed them to municipalities?

I am HARD against this idea. To be blunt: I don't have trust in the province to do this. Which isn't a criticism of any particular governing party, but of ALL provincial governments. Across Canada, we see provincial governments of all stripes trouncing on municipal governance and starving local infrastructure of funding when politically convenient (see this recent Senate Inquiry: https://senatorpaulasimons.ca/en/municipalities-inquiry/ ). I really worry about the current and all future provincial governments having even more power to interfere with local decision making. If municipalities don't have any ability to generate their own tax revenue, I don't think that is a win for local democracy.

But....

I do love the conversation about getting more efficient.

Something I would like to be explored: moving towards having the province do property assessments like happens in BC. So the province would determine the assessed value of your property, but the municipality would still calculate the tax rate (based on that provincially determined value and how much tax revenue municipal operations require) and collect taxes. Centralizing assessments MIGHT be a great way to save money without actually removing municipal control over local budgets. And having the municipality un-involved in assessments might help residents trust our property tax system more.

Additionally, I'd love to have a conversation about the province collecting ITS OWN property taxes.

Right now, municipalities are required to collect property taxes on behalf of the province. In Grande Prairie, ~20% of your property tax bill goes towards the province. Many residents don't realize this. And across Alberta, we usually see provincial property taxes go up by a much higher rate than municipal property taxes. But residents don't see which level of government is adding what amount to their tax burden because they are all lumped together. I'd love to see the province stop collecting property tax all together. But if that isn't going to happen, I would love to see there be increased transparency by having the province collect its own taxes.

Two other taxation ideas I was excited to hear from the Premier:

The Premier discussed how the province sets its property taxes. Basically, it just keeps the same RATE every year. The problem with this: since properties go up in value most years, this means the provincial property tax AMOUNT increases each year. Which I think is pretty bogus. If your local housing market gets hot so your house goes up by 15%, that doesn't typically mean that government services also cost 15% more to deliver. So there is no reason for your taxes to go up by 15%. So I was glad to hear the Premier say she is open to change. I would prefer the province do what most municipalities do: determine the AMOUNT of property taxes it will collect. Then base the RATE on this. We wouldn't see provincial property taxes going up as dramatically as they are if it did this.

Another interesting conversation: right now, your taxes are only based on the value of your house last year. The problem with that: we see a lot of fluctuation in home values. So there is a lot of volatility in how much taxes people pay year-over-year. The Premier moved towards having taxes determined by a rolling average made up of the last few years of assessed values. I love this idea! I've advocated for it in the past because I think it would bring a lot more predictability to residents' tax bills.

Right now, ALL municipal budgets are strained. We're seeing escalating costs, increased calls for service from residents, and decreasing tax revenues. Things are especially challenging for midsized cities, which have had the largest decreases in provincial infrastructure funding. So given the challenges we are seeing, I think conversations about how municipal taxes are collected are especially relevant right now.