Municipalities have three years to come up with methods for splitting the costs of regional services, which can be anything from roads, to swimming pools, to policing. It's a tall order and one that will be discussed at a number of open houses in coming months.
Some municipalities have complained for years that local tax revenue generated by gas and oil wells, pipelines, telecommunications and cable facilities — known as linear properties — should be pooled and distributed throughout the province. The NDP is leaving the money with the jurisdictions where the properties are situated, but hopes collaborative agreements will lead to sharing to ensure regional services are fairly funded.
It's not at all certain that large cities such as Edmonton and Calgary will be able to reach cost-sharing arrangements with their less-populated neighbours, though. Smaller jurisdictions have often felt dictated to by the larger cities, which has led to bruised feelings. Municipal Affairs Minister Danielle Larivee says if municipalities can't reach deals among themselves, they'll be forced into binding arbitration.
Larivee also wants to amend the Municipal Government Act to address how new suburban neighbourhoods will be financed. Edmonton has calculated that three new areas of growth will cost the rest of its taxpayers $1.4 billion over the next 50 years because the city can't collect all of the costs from developers.
That's a hefty expense to be shouldered by existing homeowners, but if the fees are too high they could further erode affordability by pushing up prices. Alternatively, too-steep fees could persuade developers the risks aren't worth it, or that they're better to pursue projects in communities where land prices are lower — even a short distance outside Alberta's largest cities. It's going to take some work to get this one right.
The proposal to ensure residential and non-residential property taxes are more equitable is overdue. Many municipalities have chosen to ratchet up the rate for businesses, knowing their owners are less likely to complain than residents typically are. The act will be amended so that the highest non-residential tax rate can be no more than five times the lowest residential tax rate, which makes sense.
Also wise is the decision to deny municipalities new tax powers. There is only one taxpayer, it's often pointed out, so it's foolish to believe municipalities could add an array of new fees and taxes without consequence.
Larivee might be overly optimistic in thinking municipalities can negotiate cost-sharing arrangements, but to the government's credit, it's got much of the details right and has given local politicians a lot to talk about.