WHEREAS the Government of Alberta eliminated grants-in-lieu of taxes for seniors’ apartments and family housing units operated by public housing management bodies in 2015; and
WHEREAS prior to 2015, municipalities utilized these grants-in-lieu of taxes to help offset the cost of services that are provided to all citizens and property in the municipality including seniors’ apartments and family housing units; and
WHEREAS since 2015, municipalities have lost approximately $16 million in revenues every year; and
WHEREAS municipalities have no choice but to off-set that revenue loss by increasing property taxes from an already strained property tax system to maintain current service levels; and
WHEREAS section 362 of the Municipal Government Act exempts any interest held by the Crown in right of Alberta from property taxation; and
WHEREAS section 20 of the Alberta Housing Act (AHA) states that the Alberta Social Housing Corporation (ASHC) is an agent of the Crown in right of Alberta; and
WHEREAS section 27(1) of the AHA provides that the ASHC may each year pay to any municipality within which any of the ASHC’s real property is situated a grant not exceeding the amount that would be recoverable by the municipality if the property were subject to the property taxes of the municipality for that year; and
WHEREAS section 27(2) of the AHA states that no municipality is entitled as of right to a grant under this section; and
WHEREAS the majority of revenue that is raised by a municipality to cover the cost of its operations is from property taxes and any reduction in revenues must be borne by the other property taxpayers of the municipality;
THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta (RMA) advocate to the Government of Alberta to increase funding towards the Rent Assistance Benefit program; and
FURTHER BE IT RESOLVED that the RMA advocate to the Government of Alberta to reinstate grants in-lieu-of taxes for housing units operated by public housing management bodies; and
FURTHER BE IT RESOLVED that RMA advocate to the Government of Alberta to revise the Alberta Housing Act by replacing “may” with “shall” in section 27(1) and by deleting section 27(2).
As part of the 2015 Budget, the Government of Alberta eliminated municipal grants paid to housing management bodies to off-set property tax costs.
Through this decision, the Government of Alberta is not meeting its obligation to pay a grant-in-lieu of tax on Government of Alberta owned and supported social housing. Affordable housing is an issue that Alberta municipalities have long championed, as it is essential to building vibrant, sustainable, inclusive communities.
Since 2015, this represents approximately $128 million in costs absorbed by municipalities that are already stressed to address infrastructure deficits in part due to downloading of responsibilities from other levels of government. This decision has forced municipalities to reduce critical municipal services or increase the taxes for other property owners in order to make up the shortfall.
The funding reductions impact nearly 23,000 units owned by the Alberta Social Housing Corporation and over 2,200 units owned by municipalities. The loss of these grants disincentivizes social housing because of the increased costs at a time that public housing is needed most.
RMA has no active resolutions directly related to this issue.