Residents of mountain towns west of Calgary could face steep tax increases as municipalities face increased financial pressures stemming from the COVID-19 pandemic.
Banff’s city administration has proposed a 10.2 percent increase in this year’s municipal budget, while those living in Canmore could see a 12.3 percent jump. Meanwhile, their urban neighbor Calgary recently approved a smaller 4.4 per cent property tax increase over the next year, followed by 3.3 per cent increases in the rest of the budget cycle.
Canmore Mayor Sean Krausert said his administration has come up with a budget that, despite the large percentage increase, represents a status quo budget as third-party costs on the municipality have increased.
“It’s important that you don’t just look at the percentage,” Krausert said. “They don’t tend to tell the whole story. This is actually a 12.5 percent tax increase that the administration presented to us for a status quo budget. . . for the average assessed home, this equates to an $18.50 per month increase. Whereas if you look at Calgary, a tax increase of 4.4 per cent, so one-third of ours, amounts to an increase of $12.08.”
Krausert said his community faces a number of third-party cost increases that are driving the jump in their tax proposal. He said contractually, they are taking on a greater share of policing costs from the RCMP as their population has grown, as well as accounting for inflation. The municipality must also account for issues arising from the COVID-19 pandemic, which contributed to a 2.4 percent jump by itself.
“Those uncontrollable third-party expenses are related to a 5.8 percent increase in our taxes, the cost of living adjustments for employees due to inflation, which represents a 4.2 percent increase to our taxes,” Krausert said . “Then higher interest rates amount to a 1.07 percent increase, all of that together is more than 13-and-a-half percent.”
Banff Mayor Corrie DiManno said her municipality is facing similar external pressures after their community’s economy was hit hard by COVID-19. She said they have also previously committed to adding police officers to account for while also ensuring town staff are fairly compensated amid record inflation levels.
“Really, this 10.2 percent tax increase shows an outgrowth of that deep cut that we made (during the pandemic),” DiManno said. “This budget really shows that we are trying to bring those reserve levels back from what we cut, as well as inflation, as well as focusing on the significant cost of bringing our staff wages up to comparable municipal levels.”
DiManno said the silver lining is that the town is recovering from COVID-19 as tourism continues to recover and they can welcome more guests. She said they expect to be in a healthier financial position going forward.
Despite the jumps, Krausert said he believes residents understand the pressure municipalities face and understand that the budgets as presented are to keep services at current levels.
“The amount of taxes I pay on my house each month is less than my cell phone bill and I get so much more with my taxes, based on trash removal and street cleaning and administration of the community I live in,” Krausert said.
Paul McLaughlin, president of the Rural Municipalities of Alberta, said the situation in the Bow Valley communities is no different from other small municipalities around Alberta. He said although there were increases from outside the province, there was also a offloading of costs from the province to municipalities and a reduction in funding.
“I would say that 40 per cent of the problem is directly attributable to a lack of transfers from the provincial government to municipalities, urban and rural, across the province,” McLaughlin said.
He said that as municipalities face higher costs, they also have less of a windfall as a result of a number of changes the province has made. He called on the UCP government to restore funding to previous levels, amounting to approximately $800 million, in the 2023 provincial budget.
Requests for comment sent to the province were not returned Saturday.