Trader Properties Inc. asks City Hall to defer taxes

The 2019 property tax is estimated at approximately $958,000 and if that amount goes unpaid by June 28, penalties will be levied in July and again in September. The September penalty is estimated to cost approximately $68,475.

“The biggest thing when it comes to collecting taxation is that we’ve got a responsibility to be fair and equitable in the way that we collect taxes and it’s not up to us to decide what fair and equitable looks like. Fair and equitable is defined by provincial legislation, provincial regulation and by case law,” says Councillor Dylan Bressey.

The Municipal Government Act states that City Council can cancel, refund or defer a tax but that if that decision is made, Council must also allow for the same opportunity to be had by other commercial property owners within the city.

The deferral only applies to the current year’s taxes and City Council cannot defer a previous year of taxes, but they can cancel or reduce penalties issued.

Trader Properties Inc. says they will not comment on the issue until a final decision is made.

The developer told the committee that they have struggled to attract buyers due to Alberta’s challenging economic climate.

However, in the request made to Council, the developer stated that any future proceeds from the sales of land would be applied to outstanding taxes.

They also outline that the assessment of land is overvalued, as it accounts for the completion of surrounding infrastructure which has yet to be finished. The City says no formal appeal was ever made on behalf of Trader Properties regarding the matter.

“Looking at the provincial rules, the province is very clear that local politicians aren’t supposed to have anything to do with the assessment of property. Property is assessed in a provincially regulated manor. It’s not assessed under policy that council sets. Its set under the fashion that the Municipal Government Act says that it should be set,” adds Bressey.

Bressey also notes that the province is very clear in outlining the process for people to follow if they are dissatisfied with their land assessment. “That process is to make an application to the Assessment Review Board, not to go before Council.”

If Council chooses to defer the 2019 taxes, funds from the Financial Stabilization Reserve would have to be used by the city to cover the shortfall in municipal tax and pay the school requisition cost.

While funds are to be returned to the reserve once taxes are paid, the decision would impact budgeted interest revenue for other investments and contribute to an estimated impact of a minimum of $259,213.

The revenue shortfall would ultimately impact the entire community as the budgeted operating revenue would have to be recovered through an increase to the general tax levy.

“We often get encouraged to look at our tax policies to encourage economic development and encourage development within our community. That being said, the province gives us incredibly limited tools to do so. However, this government, in their campaign platform, they made a promise to amend the MGA to allow municipalities to offer Property Tax incentives to attract investment and developments and I hope that that’s a promise they take very seriously,” said Bressey.

The Corporate Services Committee has sought further legal advice and a report will be brought back to the committee to discuss at a future meeting.

by Courtney Almeida

Trader Properties Inc. asks City Hall to defer taxes

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