CANMORE – Canmore’s vacancy tax will aim to collect upwards of $12 million in each of 2025 and 2026.
The Town’s elected officials unanimously voted at their Tuesday (Dec. 10) meeting to tax second homeowners at an extra 0.4 per cent of assessed property value, with the intent to have the money collected dedicated to housing initiatives in the community.
Coun. Joanna McCallum, the longest serving councillor in her fourth term, highlighted the attempts during her time on council to bring similar changes such as resort municipality status and a legislatively-approved vacancy tax which have all failed to get provincial OK.
McCallum noted the polarization of the tax’s creation and the importance it will have for affordable housing.
“These are not funds for general revenue,” she said. “These are funds that will go to specific non-market housing initiatives and these will support people who make this town what it is when people show up to their weekend home.
“I want to continue to see my community function. Housing is a human right, so I would suggest if you have more than enough human right than you need, perhaps it’s time you share.”
The aim is to collect $12 million for both 2025 and 2026, then reducing it to $10.5 million in each of 2027 and 2028. The tax will be the first of its kind in Alberta, with vacancy taxes growing in other jurisdictions.
In Toronto, its vacancy tax started at one per cent of assessed value, but was approved for three per cent earlier this year. Vancouver set its rate at three per cent, while Ottawa is one per cent but grows a percentage each consecutive year until a maximum of five per cent.
Both Ontario and British Columbia have legislatively-approved vacancy taxes.
Coun. Karen Marra said she appreciates everyone who lives in the community, but it was important “everybody pays their fair share.”
“Right now, we’re unfortunately in a housing crisis for the people who are here working in our hospital, serving coffee and we’re asking the non-permanent [population] to pay a little more to help us out,” she said. “This amount is fluid and we’ll use it in our best way to go forward with our housing initiatives to keep people in the community.”
Town staff have previously noted they’re not projecting to collect the full amount that’s set in 2025. A list of examples indicated as potential projects include the Town’s portion of the 100 Palliser Lane affordable housing project at $12 million in 2025; Stoneworks Creek flood mitigation at $3 million in 2026; and a Palliser pedestrian crossing at $14 million in 2028.
Other options include Larch area land use intensification, accessory dwelling units program and marketing and purchase of units at Lawrence Grassi Middle School area redevelopment plan.
An updated budget to run the vacancy tax had salaries, wages and benefits at $513,418 in 2025 and $522,666 in 2026.
Coun. Wade Graham said he believed the vacancy tax was a “turning point” for the community and it was key in funding housing projects to help people remain in Canmore.“I’ll note this tax is pretty optional,” he said. “You can put someone in your home for six months, in one room, and not pay it, and I’d be glad to see that happen,” he said.
Mayor Sean Krausert highlighted he and his family have had to consider leaving the community several times due to affordability, while also seeing friends leave.
“It’s beyond a dollars and cents issue,” he said. “This is about the preservation of any form of community into the future. This is about recognizing how so many people have fought to be here.”
Krausert noted both he and Graham had a vacancy tax as part of their 2021 election campaigns.
He said “regrettably” the community has to have a vacancy tax, calling second homeowners heroes rather than villains for ultimately financially contributing to affordable housing, but “could see no other solution because we don’t have any other tools.”
“We’ve tried all that we could try and everything else is not possible. It’s not allowed, so we are trying this route, which is allowed,” he said, noting the Town can’t have a need-to-reside clause, mandate affordable housing in private development or attain resort municipality status.
Previous work by Town staff and Ben Brunnen, a consultant with the Livability Task Force, estimated 26 per cent of homes in Canmore are second homes. An analysis of 2023 utility accounts showed 2,260 of 8,578 residential properties were not occupied by full-time residents. When using mailing addresses, more than 2,150 didn’t have Canmore mailing addresses.
Town staff have previously indicated monthly housing costs such as rent, utilities and mortgages have increased 65 per cent since 2006 and are 37 per cent higher than the average Alberta rate.
As part of the Town’s new vacancy tax, a primary residential tax subclass was created for full-time permanent residents and a non-primary one for second homeowners. The Ministry of Municipal Affairs has confirmed to the Outlook multiple times a municipality can create a tax subclass and has discretion to tax a specific property class at a different rate.
“Municipalities must tax according to the rules in the [Municipal Government Act]. The MGA does not specifically enable a vacant home tax, but it does enable the municipality to divide its residential class into subclasses by any means it considers appropriate, and apply a separate tax rate to each subclass,” said Graeme McElheran, director of communications for the ministry, in August.
“Ultimately, councils are accountable to residents when making a decision such as the secondary home sub-class.”
The legal precedent is untested in Alberta.
As of Dec. 11, the Town had received 5,071 declarations. Of those, 3,870 were primary residents, 673 were rented properties, 491 were non-primary and 37 exceptions under council-approved bylaw changes. There are 8,010 residential tax rolls available for the declaration.
A motion from Coun. Tanya Foubert attempted to bring the amount aimed to be collected from $12 million to $9 million from each of 2025 to 2028. Her motion failed 6-1.
She argued it was important to set the rate strategically, particularly given its new nature, the province potentially looking at MGA amendments and legislative directions from the province on splitting the tax burden.
“We’re doing something innovative and I believe visionary with this tax program. … We’re not just subject to oversight or accountability through our citizens but also the provincial government,” she said. “Because this is the first of its kind, I believe setting the rate lower and collecting an amount around $9 million could result in more success because at the $12 million rate, the primary tax rate program puts the property tax of second homeowners very close to the tourist home and commercial rate.”
Though making the motion, Foubert gave support to the $12 million rate, noting the struggle people have had in remaining in the community.
“Regardless of where I sit on the factors, the fact is we have no tools. We have nothing to help us,” she said.
At the Town’s Dec. 5 finance committee meeting, the estimated vacancy tax to be collected was recommended by municipal staff at $9 million or 0.3 of assessed value for a second homeowner.
Through various motions at the Dec. 5 meeting, it started at $9 million, went as high as 0.5 per cent – or $15 million – and settled on the $12 million mark. Couns. Marra, Jeff Hilstad and Foubert voted against it, preferring the $9 million amount.
Krausert emphasized the method being approved and work council directed Town staff to complete was the lone remaining option for the municipality. He said with housing interests in Canmore coming both nationally and internationally, prices will only continue to increase and be out of reach for many people.
“This is not to be a negative statement against people who own second homes in Canmore,” Krausert said. “They are some beautiful, beautiful people who are wonderful residents when they are here. This is about that form of ownership and not a particular person. That type of ownership is what will gut a community eventually. This particular solution has been a long-time coming.”
VACANCY TAX OPTIONS FOR SECOND HOMEOWNERS
- 0.10 per cent of assessed value = estimated $3 million
- 0.15 per cent of assessed value = estimated $4.5 million
- 0.20 per cent of assessed value = estimated $6 million
- 0.25 per cent of assessed value = estimated $7.5 million
- 0.30 per cent of assessed value = estimated $9 million
- 0.35 per cent of assessed value = estimated $10.5 million
- 0.40 per cent of assessed value = estimated $12 million
- 0.50 per cent of assessed value = estimated $15 million
- 1.00 per cent of assessed value = estimated $30 million
- 3.00 per cent of assessed value = estimated $90 million
MUNICIPAL LEVY BASED ON 2024 MILL RATES
RESIDENTIAL CONDO ASSESSED AT $761,000
- Primary residence: $1,559
- 0.25 per cent: $3,461
- 0.30 per cent: $3,842
- 0.40 per cent: $4,603
- 0.50 per cent: $5,363
- Tourist home: $4,776
MEDIAN ASSESSED VALUE AT $1.043 MILLION
- Primary residence: $2,136
- 0.25 per cent: $4,743
- 0.30 per cent: $5,265
- 0.40 per cent: $6,308
- 0.50 per cent: $7,350
- Tourist home: $6,545
