Collecting education property taxes: what you need to know

AUMA members have had long-standing concerns with municipalities collecting education property tax on behalf of the province. AUMA members passed two resolutions at the 2020 Convention related to education property tax, one addressing collection of the tax, and the other on proposed rebates for municipalities (which can be found in AUMA’s online Resolutions Library).

The 2020 resolutions were sent to the Minister of Municipal Affairs in November, and the Minister responded via email on December 18 with a refusal to take action to meet the intent of either resolution. Members passed similar resolutions in 2014 and 2016 calling for either the abolishment of the education property tax, a cap on the amount of tax, and/or the collection of the tax by the province, all of which were not satisfactorily acted upon by the Minister.   

Members have also indicated that if the province does not take over the collection of education property tax, municipalities need flexibility around the administration associated with collecting this tax and informing residents on how it differs from municipal property tax.

AUMA’s Municipal Governance Committee hosted a discussion at their April 9 meeting with representatives from Municipal Affairs. They confirmed that the Ministry currently remains opposed to taking over the collection of education property tax; however, they shared some strategies related to collection administration that Municipal Affairs is open to municipalities using.

The strategies that were discussed are as follows:

• Provide residents with Municipal Affairs’ pamphlet on education property tax.
• Include other inserts or pamphlets prepared by the municipality that provide information on taxes, annual budgeting, municipal finances, etc.
• Add informative notes and visuals to tax notices.
• Include the general contact information for Municipal Affairs on tax notices and encourage residents to contact them with questions about education property tax. (Please note that MLAs may object to the inclusion of their contact information on tax notices.)
• The following strategies can be used, but there is an additional administrative burden for the municipalities and potentially the taxpayer:
  • Use a single tax notice with a separate page for each type of tax, with the total amount of taxes owing shown at the end of the notice.
  • Separate tax notices could be used for each type of tax, providing that each notice shows the combined amount owing for both types of taxes. (The Government of Alberta logo may not be used on documents not prepared by the province without express permission.)  
  • Separate withdrawals for payment of each type of tax could be taken from residents’ bank accounts.

Municipalities should ensure that any administrative actions they take comply with the Municipal Government Act (MGA) and that tax rates for both municipal and education property taxes are shown on the notices. All the above strategies are compliant with the MGA; however, Municipal Affairs recommended that consideration should be given to using the ones that provide the most transparency and clarity for residents, with the least administrative effort and cost.

AUMA was also recently advised by Municipal Affairs staff that tax notices should not separately identify the portion of property taxes a resident is paying that will go to policing costs or include a levy specifically for policing. Although current legislation does not allow a separate levy, based on a Request for Decision adopted by members at the Spring Municipal Leaders Caucus, AUMA will be advocating for legislative changes authorizing municipalities to implement this levy. Any inserts or information included with tax notices can explain the change in the distribution of policing costs in Alberta and what it means for a specific community and its property taxes.

If you have any questions, or feedback, related to collection of education property tax,  please contact Municipal Affairs’ Grants and Education Property Tax Branch at taxprogramdelivery [at] gov.ab.ca (taxprogramdelivery[at]gov[dot]ab[dot]ca), or  by telephone toll-free by first dialling 310-0000 and then (780) 422-7125, or AUMA Advocacy staff at  advocacy [at] auma.ca (advocacy[at]auma[dot]ca).