Canmore Scales Back Livability Tax Plan After Provincial Changes

Canmore council has officially approved a scaled-back version of its livability tax budget after new provincial rules cut projected revenues from the housing funding program by more than half, delaying several planned affordable housing initiatives.

Council voted Tuesday to approve changes to the livability tax budget after updated projections showed the program is now expected to generate about $4.4 million annually instead of the roughly $10.3 million originally anticipated before Alberta exempted provincial residents from the higher tax category.

The livability tax applies a higher municipal property tax rate to certain homes not occupied as a primary residence for much of the year. The town says approximately 25% of homes in Canmore are not occupied by full-time residents, while the community’s rental vacancy rate remains around 0.9%.

The revised budget follows new provincial rules that allow the program to continue while exempting Albertans from the higher tax category, significantly reducing both projected revenues and the number of properties paying into the program.

Despite the reduced revenues, a majority of council argued the town still needs the funding to address worsening housing affordability pressures in Canmore.

“Affordability is the number one threat to Canmore and the Bow Valley,” said Coun. Wade Graham.

The revised budget delays or extends funding timelines for several housing-related initiatives, including funding tied to the YWCA housing project, future housing-provider funding and infrastructure work connected to the Palliser neighbourhood.

Council also accepted recommendations from the re-established Property Tax Task Force, a community advisory group tasked with reviewing broader property tax policy and implementation of the livability tax program.

The task force recommended keeping the town’s current balance between residential and non-residential property taxes while also advising against raising the livability tax above comparable tourist-home tax rates.

The meeting exposed sharp divisions among councillors over whether the town should accept the reduced revenues or pursue a more aggressive affordable housing funding plan despite the province’s restrictions.

Coun. Jeff Mah argued the revised budget did not go far enough to address the community’s housing crisis, warning many residents could not afford to wait for slower housing timelines.

“My concern is that it’s not enough, soon enough,” Mah said. “The luxury of time is not a luxury that many people in our community have.”

Mah contrasted those residents with second-home owners deciding whether to visit their vacation properties on a given weekend.

“Contrast that to another subset of the community where their biggest decision is, ‘Should we come out to our second home this weekend.’” Mah said.

Coun. Graham argued the revised budget would not go far enough to address Canmore’s long-term affordable housing shortage despite years of housing planning and policy work.

“By 2041, Canmore will need 3,400 units of affordable housing,” Graham said. “We need approximately 2,000 non-market units by 2031.”

Several councillors pushed back against increasing the tax beyond levels already publicly discussed during earlier stages of the program.

Coun. Erin Foubert argued council should proceed cautiously given ongoing uncertainty around how many properties will ultimately qualify under the revised rules and how much revenue the program will ultimately generate.

Mayor Sean Krausert similarly defended the scaled-back approach, arguing the town must balance housing needs with fairness and continued co-operation with the province. Krausert said the livability tax is only one part of the town’s broader housing strategy, pointing to additional housing funding efforts already underway through partnerships, grants and future budget discussions.

“The question is where we can get funding, and this is not the only source,” Krausert said.

With projected revenues now less than half of what the town originally anticipated, future debates are expected to focus on whether the revised livability tax can still generate enough funding to meaningfully address Canmore’s worsening housing shortage.