Red Deer has sixth worst property tax rate ratio for business

According to a new report, Red Deer has the sixth worst tax rate ratio among 20 Alberta municipalities by making businesses pay more than two times the property taxes than residences with the same property value.

The Canadian Federation of Independent Business’ Alberta’s 2024 Property Tax Report also ranks the city as the eighth worst in the property fairness ratio. Business properties pay 41 per cent of the city’s property taxes despite only making up 25 per cent of the city’s total assessment.

Bradlee Whidden, CFIB’s policy analyst for Western Canada, said Red Deer has put a disproportionate burden on businesses by setting the business property tax rate at 1.56 per cent compared to 0.73 per cent for residences.

“We’re not saying that businesses shouldn’t pay a higher rate. What we are saying is that with businesses only making up 25 per cent of the city’s property assessment, why are they paying 41 per cent of the city taxes,” Whidden said.

The CFIB says the burden is greater in the larger cities.

“Red Deer is around the middle of the pack so we do commend the city for being better than comparable cities, like Lethbridge and Airdrie, however there is definitely still a long way to go to property tax fairness.”

Related:

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The CFIB says over the last five years (2018 to 2023), total revenues from the unbalanced property tax distribution in Red Deer grew by 2.3 per cent annually on average.

Under the current tax revenue split (53:41), the business tax rate in the city is expected to increase to 1.6 per cent by 2027 while the residential tax rate will stay flat at 0.73 per cent. That’s because the growth in residential assessment is closer to the expected growth in overall property taxation than the growth in business assessment. The residential tax rate therefore does not increase to compensate for slower assessment growth, unlike the business tax rate.

Related:

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Leduc had the best property tax fairness ratio at 1.18, while Calgary had the worst tax fairness ratio at 2.68. Red Deer was at 1.66.

Whidden said a lower tax rate would make cities more attractive to new businesses and help existing businesses that are coping with the challenges of high interest rates, lingering inflation and lower consumer demand.

“Small businesses are the cornerstone of communities like Red Deer. They contribute to three-quarters of Alberta’s private sector employment and we need to ensure the governments implement policies that allow them to survive and thrive.”

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