Please note that all opinions expressed here are my personal views. To keep up-to-date on City of Calgary finances, sign-up to receive my monthly e-newsletter at www.WardSutherland.com.
Carbon Tax on the tax?
The Provincial Government has announced a carbon tax that will come into effect in 2017. There will be a carbon tax on your home heating bills and your transportation bills. Unfortunately, this same tax will apply to the City’s public transportation, police, and fire departments, etc. This tax will add $6M to the operating budget. This may affect Calgary Transit’s service hours, which are already stretched thin due to decreased ridership as a result of the current recession. Other options may be to increase transit fare (counterproductive) or add ½% to Calgarians’ property taxes. The City is already undertaking measures to help reduce its carbon footprint. We have a CTrain line that's fully powered by wind-generated electricity. Since 2013, The City has been investing in greener buses, with 150 Xcelsior clean diesel buses currently deployed. The Calgary Police has issued an idle-free campaign, resulting in less wasted fuel. As well, the City is continuously looks for ways to find better vehicles for the job.
Provincial Property Tax
On your upcoming property tax bill, there are two components noted - the City of Calgary portion and the Provincial portion. City Council has decreased its property tax hike from 4.7% to 3.5% this year. I will be advocating for zero hikes in 2017/2018. The Province has issued a 10.2% increase in its education/property tax. We were expecting an increase under the current economic environment, but certainly not as extreme a one. Unfortunately, this means that when the property tax hikes from the City and the Province are combined, homeowners face a total tax hike of 6.1%, which equals about $170 in 2016 instead of $60.
I can appreciate the difficult times many Calgarians are experiencing in the past couple of years, and truly believe we have a responsibility to respond by lowering taxes. As The City we do not run an operating deficit and nor should we. You have my continued commitment as Vice Chair of the Priorities and Finance Committee to challenge City Administration and advocate prudent financial governance.
There have been some inaccurate statements from the provincial government regarding the education tax. Please see the facts below:
There are two factors that affect the amount that Calgary property owners pay in provincial education property taxes – the increase in the total cost of education to be paid by property tax, and the change in property assessments.
1) The total cost of education to be paid by property tax increased in 2016 from 2015. The Province of Alberta reported that for 2016/17 they will collect about $2.414 billion in education property taxes. This was reported as an increase of about $153 million (6.8%) over 2015/16. In short, more property tax is required by the Province to fund education.
2) The change in the equalized assessment base in Calgary, in relation to the change in the total provincial equalized assessment base, increased greater than the overall equalized assessment base for Alberta. In short, Calgary property owners “picked up” more of the overall education property tax requisition. It should be noted that the provincial calculated equalized assessments have a one-year lag when compared to municipalities’ assessments.
The interplay of these two factors affects the change in the provincial education tax rate for Calgary property owners. For residential property owners, the increase in the provincial education tax is 10.2%.
This content represents the personal views and opinions of the Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.