A small business advocacy group is trying to get commercial taxes on the radar for Alberta’s upcoming municipal elections by suggesting businesses pay more than their fair share of property taxes.
In 2009, small businesses across Alberta paid an average of 2.36 times more property tax than did residents on equally valued properties, said a report issued by the Canadian Federation of Independent Business (CFIB). Since businesses use far fewer municipal services than residents, the CFIB is accusing municipalities of treating businesses like a “cash cow.”
“They’re not directly using recreational facilities or golf courses or libraries or parks and they have to pay for their own garbage collection,” explained CFIB’s Alberta director Richard Truscott.
“While they don’t mind paying for the services they receive, our members are saying that they’re not feeling there’s fairness in the system, that they’re paying far more than the services they receive.”
The business lobby group analyzed the gap between the taxes levied on residential and non-residential property for all 350 municipalities in Alberta. Calgary and Edmonton had the highest gaps among cities, with Calgary businesses paying property tax at 4.57 times the rate of residents. The Edmonton rate was 3.12.
St. Albert’s gap was 1.61, 65th among the 88 Alberta municipalities with a population of at least 5,000 people. The city is 15th among cities and 11th in the Capital region.
Truscott noted St. Albert’s gap isn’t large but the city collects $1,096 per $100,000 of assessed value, the second highest in the Capital region.
“That would be of concern to us and our members, and definitely would have an impact on the competitiveness of businesses in St. Albert,” he said.
The CFIB wants candidates in this fall’s municipal elections to commit to limiting the mill rate gaps in their communities and work over time to reduce them.
Mayor Nolan Crouse said he’s comfortable with the status quo.
“We are competitive when it comes to business taxes in the region. We’re competitive in the province,” he said.
“We don’t necessarily get a lot of negative feedback associated with this from businesses so I’m comfortable with where it is.”
If a future council had thoughts about making changes, it would have to carefully analyze the effect on taxpayers and services, he said, as cutting taxes generally leads to cuts in services.
The report, which is posted at www.cfib.ca/ab, makes a number of suggestions as to how municipalities can reduce business taxes while minimizing the impact on services.
These include adopting a user pay philosophy, generating savings from increased contracting out of services and ensuring public sector wages follow rather than lead the private sector.
Sturgeon County, with a gap of 2.89, is second in the region and 26th in the province. Morinville has a gap of 1.20, placing it 81st of 88 municipalities.
