The Alberta government's reduction in grant payments to municipalities in place of property taxes four years ago has created a $250,000, and growing, shortfall for St. Albert, the city says.
As provincially owned property is exempt from municipal property taxes, the Alberta government provides municipalities with grants in place of property taxes (GIPOT). In 2019-20, citing the need to reduce spending, the province reduced GIPOT funding by 25 per cent, and then by another 25 per cent in 2020-21.
Between 2019-22, city spokesperson Kathy DeJong said in an email, St. Albert's GIPOT funding has been reduced by about $250,000, and that number is expected to be higher once the 2023 grants are finalized.
“In St. Albert, eligible grant properties are typically restricted to government office spaces [such as] the Provincial Building and courthouse,” DeJong said. “Education and health facilities held by the province are not eligible for grant payments.”
“The total grant paid by the province in place of municipal taxes in the 2022 tax year was $73,817. If the province were required to pay municipal property taxes, they would have paid $147,634 based on the municipal non-residential tax rate.”
St. Albert Mayor Cathy Heron said the continued reduction “is really not fair.”
“The province is not willing to talk about it,” Heron said. “It's really hard to negotiate or even cooperate with a willing partner when they refuse to talk.”
“We have a growing list of things that the province has downloaded on us, GIPOT is one of them, the loss of fine revenue is another one, [but GIPOT] pisses me off, because imagine if a business or a resident got off tax free … we have to provide fire services, snow clearing, [and more] to all those provincial and federal buildings.”
Likewise, Coun. Mike Killick says the continued reduction in GIPOT funding for municipalities, especially when the province is forecasting a $5.5 billion surplus for the year, doesn't seem fair.
“Somehow the provincial government, which is going to have a $5.5 billion projected surplus, doesn't feel that they need to pay their fair share,” Killick said. “Expecting all residents and businesses to pay but the provincial government gets a 50 per cent tax break doesn't seem fair to me and I can assure you there are many residents and businesses in St. Albert that would love to get a 50 per cent tax break.”
“It would be a much cleaner process if everybody just paid their fair share of the taxes like every other resident in St. Albert or business in St. Albert — I would love to see that, but I don't think it's going to change.”
Coun. Ken MacKay said continued GIPOT reduction as an example of the provincial government downloading costs to municipalities, but added the $250,000 shortfall doesn't have a major impact on the city's finances.
“Some cities like Edmonton and Calgary, maybe some of the even the smaller cities that have government offices, that could be a could be substantial, but for us it's not as big of a hit,” MacKay said. “[GIPOT is] a system that has been developed and in place for a long period of time, and I can understand if the government was facing big challenges, but certainly right now it's an impact that hurts municipalities.”
In a recent opinion column published in the Edmonton Journal, Edmonton city councillor Micheal Janz wrote that the GIPOT reduction has led to a $60 million shortfall for the capital city since 2019.
Alberta Municipal Affairs did not respond to the Gazette before press time.