CFIB study reveals commercial property tax rates remain almost two and a half times the residential rate in Alberta
Entrepreneurs Deserve Property Tax Fairness analyzes residential and commercial property tax mill rates levied by Alberta’s municipalities from 2006 to 2016, the most recent data available province-wide.
The property “tax gap” is the differential between commercial and residential property tax mill rates. Overall, the tax gap in Alberta held steady at 2.45, equal to that of the previous year.
Calgary and Edmonton are the cities that have the most work to do with gaps of 3.81 and 2.75 respectively. While Calgary has a bigger gap, Edmonton residents and businesses pay substantially more on the same assessed value due to higher tax rates.
Figure 1:
To ensure the property tax system is fair and balanced, over time CFIB recommends:
- Municipalities reduce the tax gap through restraint in municipal operating spending. Cost savings should include: limiting the scope of government to core services, aligning public sector wages salaries and benefits to their private sector equivalents, and contracting out services where appropriate. Year-over-year operating spending growth should be limited to no more than inflation and population growth.
- The province continue to reject proposals calling for increased taxation or revenue generating powers for municipalities, including through city charter arrangements.
- The province and/or municipalities cap commercial-to-residential rates at a maximum of 2:1. The newly adopted 5:1 ratio does not fundamentally address the issue of fairness.