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 opposes to market value with all other non-residential properties; AND WHEREAS escalating 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;
THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties request the Government of Alberta to amend the Municipal Government Act such that a municipality may divide the non-residential assessment class into sub-classes that it considers appropriate; AND FURTHER BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the provincial government to amend the Municipal Government Act such that a municipality is 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 one and one-half (1.5) times.
The Municipal Government Act (MGA) allows 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. This is not allowed for the non-residential assessment class. In fact, the non-residential assessment class can only be split into vacant or improved sub-classes. A further restriction is that the tax rate for the machinery and equipment assessment class must equal the non-residential assessment class tax rate. It is not clear if the machinery and equipment tax rate must equal the vacant non-residential assessment sub-class tax rate or the improved non-residential assessment sub-class tax rate in cases where a municipality has chosen to adopt these sub-classes. Given the wording in the MGA, it may not even be possible to have different tax rates for vacant non-residential properties and improved non-residential properties. Within the non-residential assessment class, there are properties assessed at regulated rates and there are properties assessed at market value. In many areas of the province, the modifiers used to set each year’s regulated assessments are less than the increase in market value of the market value assessed properties. This causes a shift in the tax burden within the non-residential assessment class from properties assessed at regulated rates to those assessed at market value. Further, machinery and equipment properties already receive preferential assessment treatment (initially assessed at 77 per cent of cost plus receive an automatic 25 per cent depreciation reduction) and are exempt from paying provincial education taxes. As well, many properties assessed at regulated rates put extreme pressure on, and demand improved, road infrastructure. The County of Newell believes that the current situation leads to inequities and has put forth this resolution in an attempt to resolve this issue.
The Ministers Council on Municipal Sustainability recommended that own-source revenues such as limited split mill rates be considered. However, the Government of Alberta reserved decision on this recommendation pending consultation with municipalities and other stakeholders regarding its implications. In the meantime, Municipal Affairs is committed to working with both municipal and industry stakeholders to develop solutions that will address the concerns of all parties within the existing legislative framework.