County of Barrhead council questions premier's tax collection idea

BARRHEAD - County of Barrhead council and administration are somewhat wary of Alberta Premier Danielle Smith's suggestion that the province take over collecting property tax from municipalities.

At least, that is what their initial impression was at the Oct. 1 council meeting.

Smith made the pitch at the Alberta Municipalities (ABMunis) fall conference in Red Deer on Sept. 26.

ABMunis is an advocacy group that works to lobby the provincial and federal government on issues concerning its members (summer villages, villages, towns, cities, and other specialized municipalities). It represents roughly 260 members, including the towns of Athabasca, Barrhead and Westlock.

While in a session with ABMunis president and Wetaskiwin Mayor Tyler Gandam, she said that taking over tax collection for the municipalities could save them administrative time and expense.

Smith added that the province had considered collecting its own personal income taxes instead of having the federal government collect them on its behalf but dismissed the concept as the estimated costs were upwards of $1 billion.

"We have the reverse relationship with all of you," she said. "If it doesn't make financial sense for us, how does it make sense for you guys to have 320 different tax departments?"

County manager Debbie Oyarzun called the idea "crazy", saying the costs to the province would be astronomical.

"It is interesting because it is almost the exact opposite of what municipalities have been asking for," she said. "We have been saying let us collect the school taxes and keep it."

The school requisition, i.e. school taxes, has been a sore issue for municipalities for years. Municipalities are mandated to collect the tax on behalf of the province and are responsible for paying them regardless of whether they collect them.

The issue has been especially contentious with municipalities in recent years as they have had difficulty collecting linear property taxes from energy companies while still paying the province the school requisition.

Coun. Walter Preugschas said that while he disagreed with the idea, he wondered if the change would make it easier to give equalized payouts to counties and municipal districts.

Oyarzun replied that the process was already in place in the form of an equalized assessment.

Reeve Doug Drozd added he did not believe that the province collecting property taxes for the municipalities and returning them to them was officially on the United Conservative Party (UCP)'s radar.

"I don't see it as one of the resolutions at the [UCP's upcoming convention in November]," he said, adding he is not in favour of the move. "[As Premier Smith] said it, it could be on the table for next year's convention, but it is a good question to ask the Municipal Affairs Minister when [we go to the Rural Municipalities of Alberta fall convention in early November] to see what their plan is."

Drozd said the process is more complicated than just collecting property taxes.

"Would they also be responsible for the [assessment appeal process]?" he asked. "It is happening in tiny little buckets across the province."

Barry Kerton, TownandCountryToday.com