Tide Begins to Turn on Alberta’s Municipal Tax Gaps

CFIB study reveals overall gap between residential and commercial property tax rates across all Alberta municipalities drops for first time in a decade

CALGARY – The Canadian Federation of Independent Business (CFIB) today released a new report that analyzes ten-years of residential and commercial property tax rates levied by Alberta’s largest municipalities that shows the overall gap dropped last year for the first time since 2003.

The report looks at property tax data from 2003 to 2013 for all municipalities by size and region, with a focus on 86 municipalities with a population over 5,000.  The report calculates the property “tax gap,” the differential between commercial and residential property tax mill rates.  For instance, a tax gap of 2.5 means a commercial property owner pays two and a half times more in property taxes on the same value of property.

Businesses in Alberta, including small businesses, continue to pay far more than their fair share of municipal property taxes.  Some of the key findings from the new report:

All Municipalities

·         Average property tax gap for those 86 municipalities with a population of at least 5,000 decreased for the first time in 10 years; from 2.48 in 2012 to 2.45 in 2013.

·         Since 2003, however, the average tax gap for municipalities with at least 5,000 people has grown by 51 per cent (from 1.62 in 2003 to 2.45 in 2013)

·         The four worst tax gaps in 2013 for all municipalities with a population of at least 5,000 were: County of Wetaskiwin (8.44), Ponoka County (6.4), Banff (6.0) and Westlock County (5.74).


·         Growth in the overall tax gap for all 18 Alberta’s cities peaked in 2008 at 2.44, and has since dropped approximately 20 per cent to 1.98.

·         Calgary made notable progress in the gap between 2003 (5.49) and 2013 (3.93), yet remains the worst offender among Alberta’s cities in 2013.

·         Edmonton has the second worst gap among cities at 2.75 in 2013, down from 3.02 in 2012.

When business owners across Alberta were asked in a recent  CFIB survey:  Have you considered moving your business to another municipality because of the level of property taxes on your business?  Twenty-six per cent said yes, 68 per cent said no, and 6 per cent said don’t know/not sure.  In Edmonton, the response was 24 per cent yes, 70 per cent now, and 6 per cent don’t know/not sure.  But in Calgary, the results were 36 per cent yes, 60 per cent no, and 4 per cent don’t know/not sure.

“It’s not clear in all cases if the narrowing tax gap is the result of changes in the assessment base or if it has been a conscious tax policy decision by the local mayors and councils.  We do, however, know of many cases where it has indeed been a focus for municipal governments”, says Amber Ruddy, Senior Policy Analyst for CFIB.

“It certainly looks like our proactive lobbying work with mayors and city councils to close the property tax gap may finally be working.  Unfortunately, many municipal governments across our province still treat small business like a cash cow”, concludes Ruddy.

The CFIB report outlines a series of recommendations for provincial and municipal governments to ensure the property tax system becomes more balanced over time, including introducing legislation to put a cap on the maximum tax gap allowed.

The full report containing data for all municipalities grouped by region and size of municipality, are available at: http://www.cfib.ca/ab.

As Canada’s largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 109,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.