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Education Tax Rebate

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Resolution Category: 
Strategic Initiatives B5
Subject: 
Year: 
2020
Status: 
Adopted - Active
Sponsor(s): 
Spirit River, Town of
Active Clauses: 

IT IS THEREFORE RESOLVED THAT AUMA petition the Government of Alberta to provide tax rebates on uncollected education property taxes to the affected municipalities.

Whereas Clauses: 

WHEREAS the Government of Alberta has the right to requisition education taxes from municipalities;

WHEREAS there is no provision in place for municipalities to get credits back from the provincial government for education property taxes not paid by their residents;

WHEREAS the Government of Alberta continues to requisition school taxes on delinquent accounts from municipalities each year whether or not municipalities have collected any education property taxes on those accounts; and

WHEREAS during an economic recession municipalities not only suffer losses from the inability to collect municipal property taxes but also from the education taxes that are not collected but must be paid to the provincial government. This results in other taxpayers covering the cost of the uncollected education taxes year after year.

Resolution Background: 

An example of a situation where a rebate would be beneficial is when a municipality has a property for which the taxes are in arrears. If taxes levied each year are $5,000 combined for both municipal and education, the municipal portion would be $4,000 and the education tax would be $1,000 per year, equaling 20% of total taxes. Over a period of time, the municipality will get control of the property through tax foreclosure. However, the cumulative total of education property taxes paid to the province can be substantial during the period including the amount of time the property is in arrears, the foreclosure process, and the length of time the property is held by the municipality until it sells . Additionally, if the sale price of the property is not enough to fully recover all property taxes owing, this could result in a substantial loss to the taxpayers of the municipality.

If the provincial government does not reimburse municipalities for education taxes that they cannot collect from residents, the municipalities’ taxpayers that are diligently paying their taxes bear the burden of covering the costs of those not paying education taxes.

The Town of Spirit River respectfully asks for your cooperation in supporting of this resolution.

AUMA Notes: 

AUMA has previously advocated for changes to the regulation and administration of education property tax based on member adopted resolutions including:

As part of our advocacy to the Government of Alberta related to COVID-19 and the financial needs of municipalities, AUMA has recently advocated for the province to develop a mechanism to waive the requirement for remittance of the education property tax on credit defaults.

The resolution will be forwarded to the Government of Alberta for response and further advocacy will be recommended to AUMA’s Board by the Municipal Governance Committee in the context of related priorities and positions.