Finance officials suggest steady relative tax burden
City finance officials are recommending maintaining the relative property tax burden when council approves rates and discusses comparisons between single-family residential, multi-family and non-residential (commercial) class.
Thursday’s meeting of the corporate services committee also heard that overall bills will increase 4.7 per cent on average once an increase in the provincial education amount is factored in.
That would translate to an extra $133 for the median residential property, according to finance department analysis forwarded to council for approval in early May.
The tax bill of a business property valued at $1 million would rise $672.
For the last several years council has also been presented with options to shift relative burden, lowering or increasing the effect on certain classes of property.
Finance director Lola Barta said the preferred option for rate changes gives a 4.4 per cent municipal increase to singleand multi-family properties. A 4.2 per cent increase for business would keep the overall share of total revenue collected from businesses about even with last year.
“We evaluate the options to ensure a fair distribution across the property classes,” she said, adding that the small shift keeps the common tax comparison steady.
“This keeps it the same, and that aligns with our long-term goal of bringing (the tax ratio) down to two (times that of residential rates).”
Business lobby groups have long argued that the difference between residential and commercial property taxation is unfair and often times several times more.
The ratio in Medicine Hat in 2023 was 2.38, meaning 138 per cent higher, which is less than Calgary, Canmore, Edmonton and Lethbridge, but higher than Red Deer, Airdrie, Grand Prairie and St, Albert.
Chair, Coun. Robert Dumanowski said council will have final say, but the route is “typical” of past practice and larger changes could have implications on the housing market.
“I like that it keeps single- and multi-family at the same place, which has been contentious in the past,” he told committee. “We are looking over the long term to get (the non-residential ratio) down, but you shift one side against the other. It’s a delicate environment right now.”
Property tax increases were promised to be in the 4 per cent range for the municipal portion, but will actually be 4.3 per cent (overall) because new construction last year was lower than forecast and fewer accounts added to the tax roll.
The municipal portion aims to collect $89.6 million in tax revenue called for in the city’s budget, about $4 million more than in 2023 due to inflation and added expenses, according to officials.
The local provincial education requisition, set by the province but collected by the municipalities on tax bills, will total $26.8 million, about $1.4 million more than last year.
The much smaller Cypressview Foundation Levy rises a total of $30,000 across the entire assessment base. The difference for the average home would be 41 cents.
Earlier this year, the province announced it would freeze the tax rate related to the education level, but due to higher assessment values changed against it, total revenue will grow by 9.2 per cent.
Due to the assessment growth specific to Medicine Hat, the difference to Hat property tax payers is 5.3 per cent.
If approved at council in early May, tax notices with amounts owing would be mailed on May 21. Tax bills are due on June 28.