Keith Gerein: As Edmonton drives toward economic development, the UCP’s tax grab throws up a roadblock Many Edmontonians have been rightly frustrated at city council’s hefty hikes to municipal property taxes in recent years, but keep in mind none of those increases hit the 10 per cent threshold, and the city also didn’t run massive deficits at the same time.

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Keith Gerein: As Edmonton drives toward economic development, the UCP’s tax grab throws up a roadblock

Many Edmontonians have been rightly frustrated at city council’s hefty hikes to municipal property taxes in recent years, but keep in mind none of those increases hit the 10 per cent threshold, and the city also didn’t run massive deficits at the same time.

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They are the kinds of dull-as-dishwater terms you will often see in the business plan or mission statement of many an organization, to the point they almost seem ubiquitous and interchangeable.

Unexciting as they are, they also happen to be vital to Edmonton right now, which is why city council – after weeks of private discussions, has made those four subjects their top strategic priorities for the rest of the term. They are the goalposts by which this council is asking to be judged, with Mayor Andrew Knack even suggesting they could serve as the basis for a report card of sorts — though it’s unclear if he means that literally or figuratively.

Either way, it’s a good start.

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The last council really struggled to find its feet, especially early in the term, in part because of a lack of focus. Too often they got mired in micromanagement and spent excessive energy on issues peripheral or even detrimental to the things that really mattered — most notably the city’s struggling finances.

By setting strategic priorities now — and limiting them to four — Knack is signaling his determination to not repeat that mistake. And Edmonton’s issues are serious enough that this kind of precision is warranted, and perhaps essential. There is truth to the adage that if everything is a priority, then nothing is.

In particular among the four, economic development is the one that most stands out, in part because Edmonton hasn’t been especially devoted to this in the past.

It could also prove to be the trickiest of the priorities, because years will likely be needed to evaluate if the payoff is worth the effort, and because it will require ongoing cooperation with a number of different corporate, community and government players, including Edmonton’s neighbouring municipalities.

In that vein, Knack aims to do this differently by coordinating the effort out of his office rather than handing it off to someone else.

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City council limits itself to four key strategic priorities for term

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Exactly what the whole strategy will look like is still a work in progress, whether that incudes industrial growth, strategic tax incentives for certain sectors, targeted investments and so on. But last month’s announcement of the Edmonton Region Defence Alliance — a collaboration to take advantage of a massive increase in federal military spending — probably offers a glimpse.

Whatever the case, council is right to give it top attention, not only to boost the local economy, but because the city itself badly needs to improve its revenue streams without continuing to impose hefty tax hikes.

Alas, the city won’t be getting much help from the UCP government, whose recently released budget comes with an eye-popping deficit forecast of $9.4 billion.

Thankfully, the province is still making good on its vow to cover its full share of property taxes to municipalities for the first time since 2019, which disproportionately helps Edmonton due to all the government buildings in the capital. Unfortunately, the province is paying that bill, in part, by raising the property tax bills of Albertans.

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In Edmonton, according to an emailed statement from the city, a typical homeowner with a property valued at $492,500 can be expected to pay about $5,090 in overall property taxes this year.

As far as I’m aware, it’s the first time the total has exceeded $5,000.

The municipal portion of that is about $3,800, including an increase this year of $246, or 6.9 per cent.

That’s hardly ideal, but the province’s take is going up a whopping 10.2 per cent, to about $1,290.

Let’s put that in perspective.

And Edmonton is actually getting off somewhat easy compared with other Alberta communities, especially Calgary, since property values there are considerably higher.

Counter-productive to competitiveness

Moreover, for a city that is trying to get its finances in order and put itself in a position to be attractive to new business and investment — competitive tax rates being a big part of that — this move by the provincial government is decidedly unhelpful.

So, too, is the fact the province isn’t bumping up municipal infrastructure grants that are now far below historical norms. The same goes for a pool of funding that is put toward preventive social services.

That’s not surprising given the ocean of red ink drowning the Alberta treasury right now, but it still puts a lot of pressure on growing cities with aging facilities, surging demand and complex social needs.

Thankfully, the UCP government is funding a bunch of much needed new school projects in Edmonton, but there is still not much progress on health care capacity. The new budget continues a pattern of providing “planning” money for various hospital projects, including a new Stollery Children’s Hospital, but not the big dollars that represent a commitment to actually constructing something.

Overflowing ERs also probably aren’t helpful to economic development.

That said, I do not agree with Knack and others who are calling for the province to start collecting its own property tax, rather than having municipalities continue to do it for them.

Yes, the current system is a political burden for municipalities, since taxpayers often don’t distinguish between the municipal and provincial portions of the bill. They just assume it all goes to city hall, and that’s where they also direct their anger.

However, for the sake of efficiency and simplicity, it doesn’t make financial sense to have two different orders of government collecting property taxes.

Perhaps the province should get out of the property tax game entirely and shift that revenue to income taxes. But as long as they continue to make money from taxing property, it’s most practical to have just one collector.

The city is better off looking at ways of making clear to residents that 25 per cent of their taxes go to the legislature. This could be done through a sustained advertising campaign, making changes to the tax notice that comes in the mail and other measures. Half-hearted attempts have been made in the past, but it’s now time to get more aggressive.

Come to think of it, perhaps that’s one extra strategic priority council should consider putting on its list — more effective communication.

kgerein@postmedia.com

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