Grande Prairie residents are paying high property taxes due to a lack of revenue sources rather than high levels of spending, according to former city councillor Rory Tarant.
Tarant offered his insights on property taxation during Realty Glimpse LIVE at the Holiday Inn and Suites Conference Centre on Thursday.
“Our taxes do not equal higher spending,” he said. “When you have all those other revenue sources, you can keep your residential tax rate quite low.”
Realty Glimpse LIVE is a regular series of local public presentations that offer insight into real estate. Mark Street, a realtor who organizes the series, said that Tarant was a councillor for four years and knowledgeable regarding local property taxes.
“Whoever lives in Grande Prairie has definitely seen or heard stuff about property taxes and so this is intended to give people kind of an informed view,” Street said.
The presentation provided a basic overview with a focus on residential property taxes and kept its comparisons between Albertan municipalities. Most of the data was taken from Municipal Affairs.
Tarant noted that while there is some variation depending on how it is reported, property taxes are higher in Grande Prairie compared to neighbouring municipalities. In 2017, the average property tax was $2,700.
“We have near the highest taxes but yet our spending on thing after thing — when we look at it as a whole — it’s just average,” he said. “We’re just kind of in the middle of the pack. There’s not one area where we’re spending way more than the other guys.”
Tarant added that little correlation existed between mil rate and municipal spending. He later mentioned that the city would have to make “unfeasible” cuts in order to match the County of Grande Prairie’s residential property tax rate.
“It would mean a spending reduction of $54 million, which is equivalent to the city’s entire police budget and parks and rec budget,” Tarant said. “It’s just not going to happen without significant cuts to services and service areas.”
In 2017, the City of Grande Prairie got about 58 per cent of its taxes from residential, while 40 per cent came from commercial and industrial. The county, meanwhile, only had about a quarter of its taxes come from residential.
Tarant said many rural municipalities, including the County of Grande Prairie and the Municipal District of Greenview, have more alternative revenue sources, such and taxes on machinery and equipment (M&E) and linear taxes on pipelines and transmission lines.
“There’s been a big push across the province that some of this linear assessment and M&E, that it should be shared regionally, it should be shared with city government so tax rates are more equal,” Tarant said. “If you think about all those people who go to work down south of town, thousands of people, they’re all living in the city.”
He added that rural municipalities often justify keeping these taxes by saying they need to spend significant amounts of tax dollars on maintaining roads and bridges.
“That linear assessment and M&E, it is really the crux to property tax rates in the region,” Tarant said.