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.
Alberta Municipal Affairs
I understand that resolution was also sent to my colleague, the Honourable Jeremy Nixon, Minister of Seniors, Community and Social Services. As the grant program in question was under the ministry that is now Seniors, Community and Social Services, I will defer comment on that resolution to Minister Nixon.
Alberta Seniors, Community and Social Services
Thank you for your letter regarding the Rural Municipalities of Alberta’s (RMA’s) Resolution 1222F: Restore Grants-in-Lieu of Taxes for Public Housing Management Authorities, which was endorsed at the RMA’s 2022 fall convention. I have reviewed Resolution 12-22F and provide the following responses:
Thank you for this suggestion. Increasing the use of rent supplements aligns with the goals of Stronger Foundations: Alberta’s 10-year strategy to improve and expand affordable housing, released in November 2021. The strategy will support up to 82,000 households, which is an increase of more than 40 per cent, or up to 25,000 more households, by adding more housing units and providing more rent assistance subsidies. The government aims to increase rent supplements to support an additional 12,000 households and is currently exploring opportunities to further increased funding toward the Rent Supplement Program, including the Rent Assistance Benefit.
Grants-in-lieu of taxes for social housing properties were eliminated in 2015, and currently, government is not considering reinstating these grants. Government’s focus continues to be on working with municipalities toward the growth of affordable housing through Stronger Foundations. Providing property tax exemptions to social and affordable housing is one of the tools available for municipalities to partner with social and affordable housing providers in your community. We appreciate your contribution to the development of the affordable housing sector and look forward to continued collaboration.
Eliminating these voluntary grants in 2015 was consistent with the treatment of taxation on seniors’ lodges and nursing homes. Previously, the Alberta Social Housing Corporation (ASHC) provided grants-in-lieu of taxes to housing management bodies to pay municipalities on its behalf. Properties owned by or transferred from the ASHC on the condition that they continue to be used as affordable housing are not subject to municipal taxation.
Given that government is not considering reinstating grants-in-lieu of taxes at this time, amending section 27 of the Alberta Housing Act is not currently feasible. Under section 27 of the Act, grants-in-lieu of taxes may be provided to municipalities where the ASHC owns property. Government reserves the right to maintain its discretion on this matter.
The Government of Alberta response indicates a plan to respond to one of the three asks of resolution 12-22F. RMA is pleased to see the commitment to action the 10-year strategy’s recommendation to increase rent supports. However, as the response does not commit to restoring grants in-lieu-of taxes for public housing bodies or addressing specific changes to the Alberta Housing Act, this resolution is assigned a status of Accepted in Part.