By Courtney Almeida

Property Tax

Provincial Government change means uncertainty for City tax planning

Apr 25, 2019 | 5:30 AM

As a result of the provincial election, the 2019 and 2020 property tax levy for Grande Prairie is likely to be affected. The City’s 2019 operating budget reflects a residential property tax decrease of 4.1 percent but that is subject to change after factoring in the new education tax requisition.

“The public has been vocal in the past that they feel taxes are high for mainly the residential side, so council has listened to that and they [went] through the budget process in the fall, they felt they had to reduce the tax burden,” says Scott Smith, Manager of Assessment Taxation for the City of Grande Prairie.

Each year, the provincial budget is established in late March or early April but with no provincial budget set to be produced until the newly elected government is in place, Municipal Affairs will not provide municipalities with rates needed for the June 28 payment deadline.

Council’s decision to reduce residential property tax by 4.1 percent is estimated to save home owners approximately $130 per year. The current operating budget for the City of Grande Prairie also outlines approval for tax reduction in the 2020-2022 capital plans, but without the 2019 education requisition, that percentage is at risk of increase.

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“The 4.1 percent reduction is net municipal dollars, by the time you factor in the education portion, it’s only a minus 2.6 reduction because we’re estimating that the province will be increasing the education fees,” said Smith.

If the upcoming release of the education tax does not match previously produced rates, an adjustment will be made in the 2020 year to account for the difference.

Smith describes the challenge that collecting the education tax puts on the City.

“It’s not in their control and you can see the frustration on them that this is a tax we basically collect on behalf of the province and we don’t charge them for it and we’re not paid to do it. We collect it and we send them the cheque for that amount and there’s always been frustration in that there’s no compensation to municipalities to do that. Municipalities in general are collecting 2.5 billion dollars for the province– for free.”

The plan to decrease the residential property tax in Grande Prairie is part of the city’s property tax reset plan.

The reset plan works to promote ongoing fiscal sustainability and best practises with regard to electric utility adjustments, debenture debt restructuring, fees and charge reviews, managed manpower and residential/non-residential mill rate ratio balance.

Based on the provincial government’s 2018-2019 budget which outlined an education tax requisition of $2.596 billion, the city is estimating a 3.5 percent increase for Grande Prairie residents.

Smith says the collection of the education tax is, “something that they [council] feel the province could be doing on their own or compensate the municipalities for doing it for them.”

The new estimated assessment suggests that Grande Prairie’s share of the provincial education requisition is worth $29.8 million dollars, which has increased from the $28.8 million in 2018.

City reports show that in 2019 property taxes are expected to generate approximately 59 percent of the total operating costs required to provide services and amenities to residents on behalf of the City of Grande Prairie.

Residents can expect property tax notices in the mail before the end of May.

The 2019 payment deadline for the City of Grande Prairie is June 28 and the city begins imposing penalties against unpaid taxes on the first business day of July.

A pamphlet which includes more information on how property taxes are expensed and outlines the City’s approved budget will also be included with the notice.