Municipalities say the province has been shorting them on grant payments made in place of property taxes, and it has fallen to ratepayers to shoulder the extra costs.
Properties owned by the Government of Alberta are exempt from property taxes, and the province instead compensates municipalities for this lost revenue through the Grants in Place of Taxes (GIPOT) program.
Since 2019, GIPOT funding has been reduced by 50 per cent, and municipalities of all sizes report they're feeling the pinch.
“Our administration did the back work of the last five years, and did the math, and it ended up being $82,000 in unpaid taxes for provincial properties. That kind of fell back on our taxpayer’s lap,” said Westlock Mayor Jon Kramer.
“Over those five years combined, it's over one per cent property tax increase that our residents have had to step in and cover.”
Municipalities are limited in the ways they can generate revenue, Kramer said. When a major funding source disappears, there are really only two options to choose from: raise taxes or cut services.
Kramer said service levels in Westlock have remained unchanged, including to all provincial properties.
“We really do view the province as a partner,” Kramer said. “And so, it's just a simple request to the province. These are things that used to be covered, just step up to the plate and start fully funding them again.”
In November 2024, Westlock joined more than a dozen other Alberta municipalities in sending a letter to Premier Danielle Smith asking for GIPOT funding to be reinstated in full.
The Town of Elk Point is one of the communities advocating to the province to restore funding. With only one provincial property in town, grant revenue has only decreased by about $500 per year.
In comparison, Edmonton, with the legislature and majority of provincial government buildings, reports an annual shortfall of more than $13 million because of the province’s unpaid property taxes.
“The money we lost is not really significant,” said Mayor Parrish Tung. “However, as municipalities, we have to work as a team. That's why council agreed to draft a letter in support of the issue.”
A motion passed at the Alberta Municipalities fall 2024 convention asking for a return to 2019 GIPOT funding levels states that the province’s current budget allocates $38.1 million, “well below past funding levels of $60 million” before cuts to the program.
“This change in funding has effectively downloaded costs to the ratepayers within the municipalities,” the text of the motion reads.
At the convention, Smith indicated her government was open to revisiting how the province compensates municipalities in lieu of property taxes, adding she needed more information to better understand how communities have been affected by policy changes.
In a statement, Municipal Affairs Minister Ric McIver said GIPOT "is a discretionary grant program, not a tax payment, and is one of many topics currently under discussion as part of the ongoing deliberations for Budget 2025."
