Opinion: Alberta should put a stop to municipal ‘vacancy taxes’

What happens when a municipal government decides that how you use your own property is grounds for financial punishment? In Canmore, a radical new tax policy threatens to transform property ownership from a well-earned right to a highly-regulated privilege — potentially driving some owners to sell, threatening investors and turning a once strong community spirit into a corrosive, adversarial relationship. Left unchecked, these actions risk fundamentally reshaping Alberta’s real estate landscape.

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Canmore passed a “vacancy tax” bylaw in 2024 that will impose a massive 300-per-cent municipal tax increase on those who do not conform to town council’s definition of a “primary resident.” The median residential owner in Canmore will pay $2,136 in property taxes, while a “non-primary resident” will pay $6,308.

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To qualify as a primary resident, owners had to declare by Dec. 31, 2024, that they spend at least 60 consecutive days in their home and 183 days annually. Approximately 26 per cent of Canmore homeowners fall into this category. Many have homes in Canmore while living throughout Alberta, with work, health, or family commitments preventing them from meeting the arbitrary residency requirements.

As in B.C., Canmore’s vacancy tax was designed to increase the amount of affordable housing in the community. The idea — though unfounded — is that non-residents will rent their properties on a long-term basis rather than pay the tax.

Addressing the need for more housing — especially affordable housing – is a critical community goal that everyone shares. However, effective solutions require collaboration with the community and listening to all members and stakeholders in the community.

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Research has shown this type of vacancy tax does not work, and actually brings several undesirable side effects, including no impact on home pricing or affordability, a reduction in the building of new residential supply, and statistically insignificant increases in the supply of affordable housing.

Instead of a divisive vacancy tax, Canmore could explore more constructive solutions: partnering with developers to create diverse housing options (including staff housing), working with the federal and provincial governments to access affordable housing programming, and engaging a broad range of stakeholders to develop solutions that balance the needs of property owners, investors, and local employees.

Yet, the Town of Canmore concluded, without fact-based research or citizen engagement, that secondary home ownership causes housing unaffordability. The vacancy tax aims to force homeowners to either rent their properties or pay a penalty for not meeting occupancy criteria.

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The tax violates Section 289 (2) of Alberta’s Municipal Government Act (MGA), which allows municipal tax sub-classes only based on a property’s physical characteristics, not the owner’s behaviour or time spent at their property.

Property taxes are designed to distinguish like properties and tax them fairly and equitably throughout the community; they are not designed to be used on the basis of Canmore’s arbitrary perception of the owner’s ability to pay. Hypocritically, while the tax benefits the entire community, only non-primary residents bear the burden.

All municipalities in Alberta are governed by the same MGA and several have taken a hard look at what they can and cannot do in terms of progressive taxes. Municipalities like Edmonton and Medicine Hat have concluded such a tax would violate the MGA.

However, if Canmore’s vacancy tax is allowed to stand, other municipalities may be emboldened to take a second look. A motion before Calgary city council is asking for vacancy taxes to be implemented in that city. Albertans should be on high alert.

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This progressive tax is unfair and contrary to the MGA. We need provincial intervention to prevent this approach from spreading to other municipalities and damaging Alberta’s reputation as a safe place for investment.

Albertans should stay informed about housing affordability actions in their respective communities. Responsibility for addressing the housing crisis should be carried equitably by all property owners. The affordability and availability of homes is not caused by secondary home ownership rather but the ability of municipalities to bring on an adequate supply of housing (in the form of new lands or redevelopment) in a timely and cost-effective manner and the application of creative incentives and community initiatives to create the housing variety needed.

Contact your municipal councillor and MLA to halt this discriminatory tax and ensure the MGA is followed. From Canmore, a group of community members are working together to highlight the risks of the vacancy tax and ask the provincial government to clarify the MGA to make sure they do not become part of Alberta’s property tax landscape.

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Don Lowry served as president and CEO of EPCOR Utilities Inc. from January 1998 until his retirement in March 2013.

Letters welcome

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