Premier’s Letter Puts Canmore’s Livability Tax Under Review

When Premier Smith released her open mandate letter this week to Alberta’s Minister of Municipal Affairs, one directive caught the attention of Canmore officials:

“Develop and implement a strategy to protect Albertans from specialized municipal taxes directed at homes that are not a primary residence.”

That sentence appears to target policies like Canmore’s Livability Tax Program, placing the town’s housing tax experiment squarely in the provincial spotlight.

Canmore’s Livability Tax Program is structured as a tax on residential properties not occupied as primary residences. Property owners are required each year to submit a Primary Residence Declaration by December 31. To qualify, the property must have been occupied for at least 183 days in the calendar year, including at least 60 consecutive days. Properties failing to meet that threshold are assigned to a higher tax subclass, which adds 0.4 percent of the property’s assessed value in additional tax. That equals $3,000 on a $750,000 condo or $4,000 on a $1 million home, effectively doubling the base municipal residential rate.

The tax is pitched as a tool in the town’s broader housing strategy. Canmore estimates a shortfall of roughly 2,000 non-market housing units. Revenue from the Livability Tax, projected at $10.3 million annually, is intended to be directed into infrastructure, land acquisition, or direct support for non-market and affordable housing projects.

The bylaw establishing this subclass structure was challenged. In April 2025, the Court of King’s Bench delivered a ruling upholding it, confirming the town’s authority to adopt the subclass over non-primary residences. That decision cleared the way for implementation in the 2026 tax year.

Nonetheless, appeals are pending. Opponents, including a coalition of second-home owners and development groups, have taken their case to the Court of Appeal. They argue that the tax oversteps municipal authority and conflicts with provincial legislation.

Developers’ associations have already called on the provincial government to intervene, citing fears of precedent and the potential for municipalities to adopt owner-based taxes.

The directive in the mandate letter does not single out Canmore by name, but by referencing “specialized municipal taxes directed at homes that are not a primary residence,” it places such programs under a potential provincial review or constraint.

If the province were to adopt regulations or conditions restricting subclass taxation powers, municipalities like Canmore might find their local policy toolkits limited. The question becomes whether the province will encourage restraint or impose binding rules.

Mayor Sean Krausert responded by emphasizing Canmore’s housing deficit and defending the Livability Tax as a crucial revenue source.

“We are currently short about 2,000 non-market homes. A funding source we have developed to meet this need is the Livability Tax. The revenue generated will go directly into building non-market homes. These projects simply will not happen without tools like this,” he said.

In September 2025, Canmore broke ground on its largest affordable housing project yet, a four- and six-storey development that will add 144 units to Canmore Community Housing’s portfolio by 2027. The project represents a more than 50 percent increase in the town’s below-market rental stock.

Krausert also pointed to the recent King’s Bench decision as validation for the town’s approach. “This ruling reinforces our ability to act on issues that matter most to our residents,” he noted.

He added that parts of the Premier’s mandate align with Canmore’s own priorities, including commitments to limit excessive property tax increases and support housing development. “These goals align closely with the work we are already doing here in Canmore,” Krausert said.

“As I told Minister Williams last month, the Town of Canmore is open to reasonable alternatives to the Livability Tax provided they meet the unique circumstances here in our community,” he added.

Council candidate Jen Marran interpreted the Premier’s directive as additional reason to delay implementing the tax in the 2026 and 2027 fiscal years. She highlighted the recently created Property Tax Taskforce as a mechanism for more public engagement and deliberation before any implementation. Because the appeal is still before the Court of Appeal and because the tax has already generated division in the community, she argued it should not proceed until more work is done. The Taskforce is set to begin meeting in November and will include representatives from council, local business groups, and the public. It is scheduled to deliver recommendations that will help shape the town’s property tax bylaw.

The Livability Tax has also drawn questions from critics about its cost and effectiveness, with the town estimating $920,000 in first-year administrative costs and $820,000 in its second year, while supporters describe it as a necessary tool to address the housing shortage.

With the 2026 tax year looming, Canmore faces a balancing act. The Premier’s letter adds urgency for local council to scrutinize its plan in the context of possible provincial constraints, while the Court of Appeal’s decision, expected in late 2025 or early 2026, will help determine whether the town can move forward.

The Taskforce may become a pivotal instrument, either reinforcing the political legitimacy of Canmore’s approach or providing an accepted path to scaling back or adjusting it.

For Canmore, the stakes extend beyond one community. The outcome will signal how far Alberta municipalities can go when local housing pressures drive them to experiment, all under the watchful eye of provincial policy.