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Smith says city coffers could benefit under her government

Calgary Mayor Jyoti Gondek said the idea could work, as long as it's not a substitute for other provincial infrastructure funding

Alberta’s Premier-designate Danielle Smith said don’t be surprised if cities are given the ability to keep all municipal taxes generated within their boundaries.

Smith met with media on Monday, prior to the Oct. 6 leadership selection.  On Thursday night, she won the leadership on the sixth ballot, outlasting competitor Travis Toews.

Prior to her victory, Smith was asked about how she would handle the relationship with Calgary’s major cities.

“I like to be consistent,” she said.

“And so, I know that I complain a lot about how much extra money is taken out of Alberta that goes to Ottawa and that doesn’t come back, and quite frankly, we do the same thing to our municipalities.”

Smith said that years ago former MLA Lyle Oberg put forward a plan to allow municipalities to keep all of the property tax generate within their borders.

Right now, the province generates an Education Property Tax on all properties in Alberta. In 2020, the rate was set at $2.64 for every $1,000 of assessed value for residential and farmland, and $3.88 / $1,000 for non-residential.

In 2020/21, the province collected $2.6 billion in education property taxes (property owner amounts appear on your city property tax bill). In 2020, Calgary contributed nearly $800 million in education property tax.

Smith said she’d like to transition to the system that Oberg suggested. She said cities would have cash for capital infrastructure upfront that they could leverage for federal grants.

“I think we need a respectful funding relationship with our municipalities that’s built on those core principles of respecting them. They’re another order of government,” she said.

Not in the Top 5

Of course, this would all be contingent on the plan being carried out. It wasn’t in her top five priorities she laid out with media on Monday. Broad-based student testing, health spending accounts, AHS review, Sovereignty Act and medical choice added to human rights legislation were the main areas of focus, she said.

It would likely need another election mandate to see the light of day. Albertans will elect a new provincial government in May 2023.

Still, Smith recognized the need is there. The City of Calgary estimates that 88,000 new people will come to the city by 2026.

“Our cities are going to be growing dramatically over the next number of years, just looking at the in-migration that we have happening in Alberta,” she said.  

“There’s so much enthusiasm for Alberta again, and we’ve got to make sure our cities are armed with the dollars they need to keep up with that.”

Calgary Mayor Jyoti Gondek welcomed the idea. She said cities don’t have a fair deal with the province. She said 40 per cent of what they collect on property taxes is sent to the province.

She’d be open to the property tax idea, on one condition: It doesn’t impact other provincial infrastructure funding.

“I’m very interested in having conversations with whoever ends up in the premier seat to talk about what would be fair for municipalities,” Mayor Gondek said.

“However, I would like to point out that the granting that they offer us and the infrastructure investments that they need to make in cities as a provincial government can’t vanish. This can’t be a substitute. This has to be additional revenue for cities.”