CANMORE – Canmore’s new vacancy tax could bring in as much as $9 million annually to municipal coffers.
But options for the specific rate are still to be set by council, with the $9 million presented by Town staff in initial budget talks that could see second homeowners taxed an extra 0.3 per cent of their property’s assessed value.
A presentation at Canmore’s Nov. 26 finance committee outlined the expectation for the new tax, which is intended to go into livability measures in the community ranging from possibilities such as housing to affordability programs.
“It comes down to what is our philosophy around this taxation,” said Coun. Tanya Foubert. “It’s not a fairness tax … this is definitely a progressive tax and we’re asking a segment of the property owners in our community to pay a bit more to address a situation that exists because they as a segment exist.
“I don’t want it to become a punitive rate,” noting she liked the consistent rate presented by Town staff for potential collection in future years.
Mayor Sean Krausert agreed it shouldn’t be a punitive approach, but finding something that will have an impact for the community.
“It has to be impactful,” he said. “We can’t collect too little that it actually doesn’t make a difference and we can’t collect so much it becomes punitive. It has to find that impactful spot.”
Different options for collection from second homeowners ranged on the low end of 0.10 per cent of assessed property value translating to $3 million to three per cent of assessed property value ending in $90 million.
Therese Rogers, the Town’s general manager of corporate services, noted the Municipal Government Act (MGA) limits a tax spread of one to five ratio for residential and commercial, meaning a commercial property can’t be taxed at more than five times the rate of residential.
“While these are not commercial properties, we feel that that principle still applies here. It would seem unreasonable to charge 10 or more times, so that’s why we’re not recommending the upper end,” she said.
In Toronto, the city set its vacancy rate at one per cent of assessed value, while Vancouver has its at three per cent. Provincial legislation in Ontario and British Columbia allows vacancy taxes, whereas Alberta doesn’t but does permit tax subclasses with rates set for each subclass.
The new residential subclass was set up so council could set a specific tax rate for full-time residents. The program will have homeowners declare themselves as primary residents or incur a larger municipal property tax.
Rogers said as of Nov. 24 there had been 4,200 properties declared of more than 7,000 residential units needing to do so. Of those, 3,328 were primary residences, 513 were rented to residents in the community and 350 were for non-primary use. Another 19 were in other categories.
As part of the program’s launch, Town staff are proposing two part-time and four full-time positions.
For full-time staff, a livability tax program supervisor, livability tax program assistant, civic centre customer service representative and municipal enforcement officer. The part-time roles of a communications advisor and business registry coordinator are also recommended.
Rogers added Town staff have already had more than 500 phone calls and several hundred emails on the program, with expectations of ongoing questions.
For 2025, the draft budget to support the vacancy tax is anticipated to have $560,725 in salaries, wages and benefits, with an additional $300,000 in professional fees. There are proposed internal transfers of about $465,000 and transfers to reserves of roughly $7.56 million.
By 2028, it’s anticipated to have $30.29 million in the livability reserve.
A motion to fund the business registry position from the economic development reserve was supported by the committee for council consideration. A further motion to transfer $250,000 from the livability tax program to general operating reserves to reimburse money approved by council for the Partners in Affordable Housing project was also supported.
A motion to increase the Canmore Community Housing (CCH) levy from reserves was withdrawn to discuss at a later finance committee meeting.
Canmore’s vacancy tax was put together in the past year, starting with the formation and recommendations of the livability task force. It led to council updating its division of class 1 property bylaw in August.
An update to Canmore’s committee of the whole in September had funding going to incentivizing purpose-built rentals, increasing the non-market housing supply, funding affordability programs, buying land, incentivizing the building of accessory dwelling units and covering administrative costs.
Indicators to be tracked are getting a count of properties used and not used by full-time residents, owner versus tenant occupied units, tourist homes converted to residential use, properties that are exempt and second homeownership compared to other residential properties.
The indicators for enforcement would be the number of annual audits, fines issued, complaints that are valid or not valid and false declarations found from an audit. An annual report would be done each year.
Coun. Joanna McCallum said she felt the way it was brought to finance committee was backwards, preferring to see what the first three years of possible expenditures could be, have a strategic plan similar to a capital plan and how to implement it.
She gave examples of future potential projects such as a pedestrian bridge to the Palliser area, relief from off-site levies for Palliser Lane housing projects and possible tax relief for non-market housing projects.
“I feel like instead of lobbing a number, maybe we need to do some thoughtful work on the first three years,” she said.
Coun. Jeff Mah echoed McCallum’s comments, adding he was comfortable with the 0.3 per cent vacancy tax rate.
“If I had a better idea of some of the bigger domino pieces, that could give me enough comfort to move closer and closer towards what we want to set as for a rate,” he said.
Coun. Jeff Hilstad said his preference was for second homeowners' tax rate to be higher than permanent residents, but ultimately lower than tourist homes due to their commercial nature.
“It makes sense for [tourist homes] to be the higher rate, so my main thing is I want it to be below. … Part of it is we’re going to have to pick a number and it might be we adjust it going forward or it happens to work,” Hilstad said.
Sally Caudill, the Town’s CAO, said municipal staff could return to the Dec. 10 finance committee or sooner with potential options.
“There’s no shortage of projects we could potentially spend this money on,” she said.
Rogers added ongoing discussions with CCH have the Town’s portion for 100 Palliser Lane – that will build 144 rental units in four- and six-storey buildings – is in the neighbourhood of $12 million.
“It speaks to why we need to build a fund, so when we have requests like that we have a way to potentially fund them if [council] choose to use that type of reserve,” she said.
