Canmore Livability Tax Could Lose Half Its Revenue

The Town of Canmore will move ahead with its Livability Tax in 2026, but under newly proposed provincial legislation, the program will apply to a narrower group of property owners than originally planned. The change is expected to significantly reduce revenue for local affordable housing projects.

The shift comes after the Alberta government introduced Bill 28 on April 2, which proposes amendments to the Municipal Government Act. The changes would allow municipalities to tax homes differently based on whether they are used as a primary residence, but would prohibit applying higher tax rates to Alberta residents.

If the bill passes, the Livability Tax in Canmore would no longer apply to all non-primary residences as originally designed, but only to second homes owned by people who live outside the province.

Mayor Sean Krausert said the change aligns with what he had anticipated following discussions with the province.

“The change proposed by Bill 28, explicitly allowing residential subclassifications based on residency while exempting Albertans, is exactly what I was expecting based upon my productive discussions with Municipal Affairs Minister Dan Williams,” Krausert said during a media availability on April 2. “After taking steps to ensure our bylaw aligns with the requirement to exempt Albertan second homeowners, the Town of Canmore will be proceeding with the Livability Tax this year.”

A Tax Reshaped, Not Removed

The Livability Tax was introduced in 2024 as part of Canmore’s broader housing strategy.

The program applies an additional property tax to homes that are not used as a primary residence, with the goal of encouraging full-time occupancy and generating funding for non-market housing (homes priced below market rates for local residents). In Canmore, where the median assessed value for a single-detached home is about $1.48 million, those types of homes are increasingly out of reach for many workers.

Krausert said the proposed changes will directly affect how much funding the program can generate.

“We obviously are expecting a decreased amount of revenue than our original projections,” he said. “Right now, that amount is… somewhere, I would think, at least half of what we were expecting.”

The town previously estimated the tax would generate about $10.3 million annually. With the program now expected to apply to a smaller group of property owners, a significant portion of that revenue is likely to be lost.

Still, Krausert framed the change as a step forward.

“I prefer to look at this as a glass half full,” he said. “That allows us to proceed with using revenue from this tax to address our severe housing crisis, starting this year.”

The town has begun collecting updated information through its annual declaration process, where property owners report how their homes are used and whether they are Alberta residents, to determine how the revised program will apply.

Housing Projects Remain, But Timeline May Shift

The reduced revenue is expected to affect the pace, rather than the viability, of Canmore’s housing plans.

One of the projects tied to the Livability Tax is the YWCA-led Moustache Lands development, a proposed 270-unit affordable housing project. The roughly $150 million project is expected to be funded through a mix of provincial and federal grants, financing from the Federation of Canadian Municipalities and Canada Mortgage and Housing Corporation, and YWCA fundraising, with the Town of Canmore contributing $10 million from the Livability Reserve.

With that revenue source now expected to shrink, the town’s contribution is likely to be distributed over a longer timeline.

“The Moustache Lands… is going to be a recipient of funds that would come from this reserve,” Krausert said. “It will just be perhaps spread over a couple of years instead of one year type thing.”

Other projects, such as the Canmore Community Housing development at Palliser Lane, are not expected to be affected because their funding is already in place.

“That one will not be affected by this whatsoever,” Krausert said.

The Palliser Lane project is expected to add 144 units to Canmore Community Housing, the town’s municipally owned affordable housing provider for local residents.

A Slower Path to the Same Goal

Krausert emphasized that while the funding outlook has changed, the program still represents new revenue that would not otherwise exist.

“This isn’t a reduction in money that we’ve already received or received in the past,” he said. “This is new revenue.”

Still, he acknowledged that reduced funding will affect how quickly housing projects move forward.

“Will it go as quickly if we had more funds? No, it will affect pace,” Krausert said. “But we are looking potentially at other sources of revenue.”

The town is continuing discussions with the province about additional funding tools and policy changes that could help offset the gap.

Legal Clarity, Political Compromise

The legislative changes come just weeks after the Alberta Court of Appeal upheld Canmore’s authority to implement the Livability Tax.

Bill 28 reinforces that authority while introducing limits on how the tax can be applied, reflecting provincial concerns about its impact on Alberta residents.

“This represents a significant step forward in dealing with our community’s severe housing crisis,” Krausert said.

The town will now review the legislation and bring forward amendments to its Livability Tax bylaw to ensure compliance, pending the bill’s final passage.

What Happens Next

No Livability Tax has been collected yet. The changes come just before the town finalizes its 2026 tax rates, allowing council to adjust the program before tax notices are issued later this year.

If Bill 28 passes, the Town of Canmore is expected to proceed with the revised version of the tax in 2026.

For residents, the program is moving forward, but in a more limited form. For the town, it means continuing to pursue a key housing strategy, but with fewer resources than originally planned.