Monday, March 7, 2011

The new Alberta?

In Saturday's SP (Mar. 5/11) it was published that the provincial revenues jumped by $311 million. The NDP accused the Sask Party of being on pre-election spending spree. The Sask Party stated they were simply putting money into priorities that were put off due to earlier fiscal constraints. For a change they are both right.

My personal preference would be to use the excess revenue is to pay down the debt. In the long run it would be to our greatest benefit. However, that is not going to happen in an election year. That being said I would like the government to keep its promise on removing education tax from the property tax bill.

I recently had occasion to review a few real estate listings from Calgary. I was truly dumbfounded to discover that their property taxes were literally half of what we pay. Subsequent to that I was advised that it was because Alberta does not have education tax on its property bills.

Removal of this tax would go a long way to helping new homeowners and seniors to remain in their homes. Rents may even drop if landlords see that expense removed.

It would appear that all Wall has to do is keep his head down in order to win the November election. Although he doesn't have to keep this promise to win, it would go a long way to restoring public confidence in politicians and their election rhetoric.


  1. Not sure what to make of the lack of comments on this issue Mistress. Might be the March cold weather blues or maybe people just don't give squat about gearing up for the election.

    I would love to see the Gov take all tax off property however it needs to be done in a manner that we will never have that system again. Now if we could only do the same for local taxes I would be in nirvana.

    If the taxes aren't on property they will need to come from somewhere?? that is the biggest question.

  2. I agree take it off the property bill, I would rather pay it separately. At least that way it will give me some indication as to how much I am paying and will help hold education decision makers responsible.

    As to lack of comments, after seeing the way that the city has handled taxes, spending, and fees I don't blame the public for being apathetic to the issues anymore. It is amazing how little of my pay cheque I have left after paying for all the taxes and associated fees.

  3. There are also differences between Saskatoon and Calgary. For example, they have municipal business taxes on top of the property tax business pays. You may not see it on your property tax bill but rest assured, it is embedded in the retail price of everything you buy (in Calgary).

    The study by the City of Edmonton is interesting and enlightening.

  4. Hi Mistress,

    I am afraid you have been given some bad advice. Having lived and owned a home in Calgary up until a year and half ago, I can guarantee you that Alberta municipalities do collect education property taxes on behalf of the province and this is included in a homeowners municipal tax bill. The split is approximately 52% municipal and 48% education. So the tax number you would have seen on the Calgary properties would include the total tax bill, meaning education and municipal.

    The primary reasons why residential property taxes in Calgary are much lower than they are in Saskatoon are:
    (1) Calgary has a very large, and high-valued non-residential (business) sector, which substantially helps to keep residential property taxes lower; The Petro Canada building and Bankers Hall building in downtown Calgary alone are valued in the mid-hundreds of millions each.
    (2) Calgary also has a business occupancy tax (essentially a property tax on all businesses regardless if they own the property or not) which also removes some of the burden from the residential property tax.
    (3) Calgary's median assessed value is over 400K, whereas Saskatoon's is around 170K, so this in itself would require lower taxes on individual homes in Calgary; and
    (4)Calgary utilizes user fees rather than the property tax to pay for many programs. For example, every person who owns a single family home in Calgary pays about $8.20 per month for recycling and about $4 per month for waste collection, regardless of what the assessed value of their home is

  5. Anon 5:07 - Thanks for that info. It is rather interesting that we try to keep business tax low whereas Calgary leans to keeping residential low. I don't have a problem with user fees i.e. recycling and waste collection - its when user fees are collected over and aobve taxes already billed.

    Didn't we recently read that Saskatoon housing was now higher than Calgary when measured on percentage of income required to purchase?

  6. Mistress,

    On your second paragraph, yes you are correct in terms of housing prices, however, I was referring to assessed values. Remember in Saskatchewan, provincial legislation mandates that property assessments are conducted every four years. In Alberta. provincial legislation mandates that property assessments are conducted annually.

    So, in terms of assessed values, Saskatoon's are based on market conditions at July 1, 2006. Calgary's are based on market conditions as at July 1, 2010. So the difference is substantial given the lag time for when property assessments are updated in Saskatchewan.

    The other point to note is that in Saskatchewan your taxable assessment is only 70% of your total assessed value. So, for example, if your home is assessed at 300K your taxable assessment is 210K.

    In Alberta, property taxes are applied at 100% of assessed value. So if your home in Alberta is assessed at 400k your taxable assessment is 400k.


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