Linnsie Clark at an April 4 council meeting ( Derek Brade/CHATNewsToday)

By Tiffany Goodwein

Setting tax rate going to be ‘a difficult balance,’ says Clark

Apr 5, 2022 | 12:39 AM

MEDICINE HAT, AB – City council is gearing up to set the city’s tax rate later this month, and Mayor Linnsie Clark says this year, will be a tough balance to strike between business and residential taxes as the city looks to recover from COVID-19.

Last December, council approved a 2.5 per cent tax hike, following two consecutive years of municipal taxes being frozen at zero.

“It is going to be a very difficult balance, but as director Barta pointed out this evening we have the ability to kind of see what things are going to look like and she is going to come forward with some scenarios for council’s consideration at the next council meeting,” Clark said.

At Monday’s meeting, council received a presentation from the city’s director of finance Lola Barta. During the presentation, the possibility of creating tax subclasses was discussed, which would give the city the ability to apply varying rates to a particular property.

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Barta told council that there are three taxation subclasses that already exist in the city for residential properties – single-family, multi-family, and vacant residential properties. They could also be applied to non-residential properties, such as small businesses.

But the city’s director of finance said that subclasses could create unintended consequences for the city depending on how council acts.

“If you are reducing the ratios, are you incentivizing that behaviour? If we are decreasing the multi-family ratio are you incentivizing that there will be more multi-family units and less single-family residential units, and is that what we desire in our community? Perhaps it might be. Then does that maybe deter people from not moving to Medicine Hat because they want a big house and yard?” she said as an example.

Council heard subclasses may also be used by area of the city or in locations that meet certain criteria such as energy efficiency levels, but Barta warned that becomes more complicated.

“When I say that there may be appeals, what’s to say someone in a different area of the city might say ‘why don’t I get that same benefit or why am I getting the impact because I live in this area,” she said.

Also at the meeting council got a glimpse of a graph that compares Medicine Hat’s 2021 tax ratio between non-residential to residential with other similar-sized municipalities.

(City of Medicine Hat)

The graph puts Medicine Hat close to the top at 2.21 per cent next to Lethbridge. But Barta explained that you can’t compare other municipalities with each other.

“It is really dependent on their factors and their requirements as a municipality. It just can’t be the same,” she explained.

Coun. Darren Hirsch agreed with Barta’s position.

“I’m never a really big fan of comparing municipalities because we could compare, Chestermere. Chestermere has a massive residential base, not so much non- residential. You could pick any type of municipality it really is almost oranges to apples,” Coun. Hirsch said, noting what is needed in Medicine Hat is balance going forward.

Council will dive into more tax rates at their next meeting on April 18.