New MGA to change the Residential Commercial Tax Rate Gap

The new Alberta Municipal MGA intends to fix an issue that, at face value seems like a noble effort.  The feedback received during the MGA review process indicated that the commercial tax rate has been growing at rates faster than residential rates.

Funding

The proposed solution is to limit the commercial tax rate to 5 times that of the residential tax rate.  There are 19 municipalities above this amount.  Below is a table based on the 16 that were over the limit in 2015 based on available data.  In 2015 the average residential tax rate was 7.05 and the average commercial tax rate was 12.24.  All but one municipality on the list below are counties or improvement districts.  All of the municipalities have a lower residential tax rate than the average.  In fact, all but 1 have a residential tax rate less than half the average.  7 of the 16 municipalities also have a commercial tax rate that is below the average.

Unfortunately the fix  for most of the offending municipalities is to raise the residential tax rate to make the gap between the 2 tax rates less than 5 to 1.  An unintended consequence for sure and one worth further consideration.

 

MUNICIPALITY Residential  Tax Rate Non-Residential Tax Rate  Multiple of Non Residential to Residential
CLEAR HILLS COUNTY 1.3022 14.6459                                                                                           11.25
OPPORTUNITY NO. 17, M.D. OF 2.2421 19.8389                                                                                             8.85
WETASKIWIN NO. 10, COUNTY OF 1.8000 13.1                                                                                             7.28
I.D. NO. 09 (BANFF) 0.4155 2.8                                                                                             6.74
PONOKA  COUNTY 1.6900 10.82                                                                                             6.40
TWO HILLS NO. 21, COUNTY OF 3.5058 21.8709                                                                                             6.24
LAMONT COUNTY 3.2351 19.3453                                                                                             5.98
WAINWRIGHT NO. 61, M.D. OF 3.0438 17.844                                                                                             5.86
I.D. NO. 04 (WATERTON) 1.1800 6.7924                                                                                             5.76
WESTLOCK COUNTY 4.4451 25.4325                                                                                             5.72
VERMILION RIVER, COUNTY OF 2.0655 11.6265                                                                                             5.63
BONNYVILLE NO. 87, M.D. OF 2.7663 15.5                                                                                             5.60
NOBLEFORD 0.3900 2.143                                                                                             5.49
ST. PAUL NO. 19, COUNTY OF 3.4095 17.5074                                                                                             5.13
JASPER, Municipality of 2.5330 12.918                                                                                             5.10
LESSER SLAVE RIVER NO. 124, M.D. OF 2.2416 11.3028                                                                                             5.04