+ RMA Rural Municipalities
of Alberta

Resolution 15-11F

Non-Residential Assessment Sub-classes and Split Tax Rates

January 1, 2011
Expiry Date:
November 23, 2011
Active Status:
Clearwater County
Municipal Governance and Finances
Vote Results:

WHEREAS the Municipal Government Act (MGA) authorizes municipalities to divide the residential assessment class into sub-classes on any basis that it considers appropriate and to assign a different tax rate for each residential sub-class; and

WHEREAS the MGA only authorizes a municipality to divide the non-residential assessment class into vacant or improved sub-classes; and

WHEREAS the MGA states that the tax rate for the machinery and equipment assessment class must equal the tax rate of the non-residential assessment class; and

WHEREAS railway properties, linear properties, and machinery and equipment properties, all of which must be levied the same tax rate as other non-residential properties, have their assessments derived from regulated rates as opposed to market value with all other non-residential properties; and

WHEREAS market values in some areas shift the non-residential tax burden from those properties assessed at regulated rates to those properties assessed at market value; and

WHEREAS machinery and equipment properties already receive preferential assessment treatment and are not subject to paying provincial education requisitions; and

WHEREAS many of these properties assessed by regulated rates place a greater burden on a municipality’s road infrastructure and demand from the municipality improved road infrastructure; and

WHEREAS, in 2007 the province indicated, in its response to the Minister’s Council on Municipal Sustainability recommendation that municipalities be allowed limited split tax rates within non-residential categories, that the province would “reserve decision on this recommendation, pending further consultation with municipalities and other stakeholders regarding the potential implications of the recommended revenue sources”; and

WHEREAS the Municipal Government Act is to be reviewed beginning in 2012; 

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the provincial government to include in its amendment of the Municipal Government Act that a municipality be authorized to assign different tax rates to the machinery and equipment assessment class and any non-residential assessment sub-class provided that the difference in any of the tax rates levied against the machinery and equipment assessment class and any non-residential assessment sub-class is not greater than two (2) times the lowest non-residential rate.

Member Background:

In 2007 the Minister’s Council on Municipal Sustainability made a number of recommendations with respect to changes required to, among other things; strengthen the long-term viability of municipalities. Recommendation #9 of the report recognized the importance of providing alternative revenues sources for municipalities and specifically recommended that:

“The Government of Alberta should enact enabling legislation to authorize municipalities, at their discretion, to levy and collect additional own-source revenues as a means of strengthening municipal capacity to address ongoing operational sustainability and better respond to growth pressures. The specific additional own-source revenues recommended are:

  1. Amusement Tax;
  2. Tourism Tax;
  3. Property Transfer Tax;
  4. Vehicle Registration Tax;
  5. Expanded Scope for Development Levies in Support of Directly Related Local Services; and
  6. Limited Split Tax rates Within the Non-Residential Property Class. (emphasis added)

As recently as 2005, the AAMDC passed a resolution calling on the provincial government to address the inequities that exist within the current assessment and taxation system related to non-residential properties.

As the provincial government begins its review of the MGA in 2012, Clearwater County believes that the AAMDC should strongly encourage the provincial government to act on Recommendation 9 of the Minister’s Council on Municipal Sustainability by including provisions within the MGA allowing split tax rates within non-residential assessment categories.

RMA Background:

The AAMDC reviewed resolutions and member submission in the development of its recommendations to the Government of Alberta regarding Part 9 of the Municipal Government Act regarding assessment.  Recommendation 4 advocated for a  a full review of overarching assessment policy; but if that wasn’t achievable, then the introdcution of a limited split mill rate on non-residential properties should be looked at.

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