Despite wanting to decrease the tax burden on St. Albert residents, council is reluctant to increase tax rates for businesses in fear of driving them away.
A report presented to the committee of the whole on Monday highlighted a number of ways to help accelerate the property tax split away from residential, but council balked at the most immediate solution – to impose unequal tax increases on residential and non-residential properties.
In 2015, St. Albert homeowners paid an average of $4,293 in property taxes – the highest in the region.
“The residents in the city of St. Albert have been pretty clear that there is a desire to increase the non-residential tax component of our annual tax revenue, and certainly over the last number of years council has designated the Employment Lands to further that role,” said city manager Patrick Draper.
According to the report, St. Albert’s current split of 82 per cent residential and 18 per cent non-residential is considered “adverse” and not in line with other large-to-medium sized municipalities within the province.
Steve Bannerman, an appraiser for the city, told the committee of the whole that attracting new commercial development alone would not help balance the tax scales.
While a gradual shift has taken place over the past five years due to new business development within the city, the report indicated at that rate it would take the city 40 years to achieve the desired goal of 30 per cent non-residential tax levies.
To solve this problem on a medium-to-long-term basis administration brought forward the possibility of setting higher annual tax increases on businesses, but council worried that this would affect the city’s competitiveness and that the move could potentially be seen as business-unfriendly.
“The reality is what we need is growth,” said Coun. Sheena Hughes.
“What we need to know is what are the key issues that are preventing growth assessment from occurring at the level we need it to achieve a reasonable tax split. That’s the real number we need to figure out; not necessarily figuring out how we can tax the people who are here more than what they are currently being taxed,” she added.
Economic development executive director Guy Boston told council that St. Albert did indeed have a lower tax rate than surrounding municipalities, but this didn’t necessarily attract investors to the area.
He told council that the biggest concerns businesses had were the cost of building in St. Albert and whether the available lands have sewer and water connections.
The non-residential tax split options will be brought back to a Committee of the Whole workshop in January 2016 for discussion.
The St. Albert & District Chamber of Commerce said it could not comment on the potential effects of a higher non-residential tax rate until its policy committee had a chance to review the details.
President and CEO Lynda Moffat said a response to council should come within the next couple of weeks.
