In those municipalities with a population of at least 5,000, small businesses across Alberta paid an average of 2.36 times more property tax than residents on the same assessed value, the CFIB says.
In some communities, the property tax gap is much higher. Calgary and Edmonton were the “worst offenders” among cities, says the CFIB, with property tax gaps of 4.57 and 3.12, respectively.
That is, a Calgary business property’s municipal tax bill, including business taxes, was 4.57 times higher than the bill for a residential property with the same assessed value in 2009. In the case of a property assessed at $100,000, its bill was $1,205 rather than $264 for a corresponding residential property of the same assessed value.
While the tax rate gaps in the big cities certainly drew the CFIB’s notice, so, too, did the gaps in some rural jurisdictions. In fact, seven of the top 10 municipalities for tax rate gaps were rural municipalities, and all of those seven have healthy tax bases connected to the oil and gas industry.
In Ponoka County, for example, the CFIB’s gap leader, business properties paid 5.75 times the residential tax rate in 2009. Virtually the same gap existed in the second-ranked County of Westaskiwin. Both counties have significant oil-patch development and have had for decades.
Higher tax rates for business properties are generally accepted as smart politics in resource-rich rural jurisdictions because they typically hit oil and gas companies whose executives don’t vote locally, and are viewed as keeping tax rates down for residential property owners who do vote locally.
Small businesses tend to be caught in the crossfire. For example, while Municipal District of Bonnyville residential properties now enjoy a municipal tax rate that’s less than 50 per cent of the corresponding rate in the Town of Bonnyville, small businesses in the oil-rich municipal district paid a rate that was about 11.4 per cent higher than the town business rate in 2009, and about 3.75 times the rate charged to residential acreage owners.