A report indicates Cochrane residents and businesses are getting a better deal on property taxes than they did nine years ago because the town hasn't kept up with the Municipal Price Index (MPI).

During its first committee-as-a-whole meeting on Apr. 19, an extensive review was provided by corporate services general manager Katherine Van Keimpema in advance of establishing the 2021 property tax rates. The rates are expected to be finalized by town council on May 10. 

When taking into account inflation, Cochrane's per capita tax is proportionately 2.23 per cent lower than 2011

Van Keimpema says this gap will need to be addressed in the coming years.

"If we had kept up, just with the Municipal Price Index, we would have been collecting $6.2 million more in taxes to help fund our services," explains Van Keimpema. "And just remember, that $6.2 million is simply just to keep up with inflation. That doesn't include the increased cost we've been experiencing for increased levels of services as well as actual services that we provide that we didn't provide in 2011."

Van Keimpema also referred to a City of Calgary report released in November 2020, which compares property taxes and utilities charged in the greater Calgary area. Overall, Cochrane has the lowest residential property taxes and even lower non-residential property taxes.

Council was told nonresidential property owners need to be paying more taxes and residential property owners less.

It was recommended the current tax split of 85 per cent residential,15 per cent commercial be adjusted to 84-16 in 2021 as a starting point to bring Cochrane's tax split closer to that of nearby comparable municipalities.

It would amount to an overall shift of $292,000, and see the average residential property owner pay $21 less in municipal taxes.

Comparing a similar-sized large business in Airdrie, Okotoks, Red Deer, and Calgary, the report indicates the large Cochrane business pays $23,000 less in taxes than the lowest comparator municipality and $149,000 less than a Calgary comparator.

"From this analysis, it's clear that Cochrane places a lower percentage of our tax burden on our nonresidential taxpayers than our comparators," she said.

By changing the split, that same larger non-residential property used in the comparison would pay an additional $6,400, bringing its total municipal taxes to $113,000. Even with the change, Van Keimpema says the taxes charged would still be $17,000 less.

She said the impact to a small business assessed at $500,000 would be an additional $77 in municipal taxes.

Council expressed no appetite to change the split at this point but did seek more information on developing subclasses of non-residential properties as a way to touch on the issue. Under the Municipal Government Act, municipalities can have subclasses of vacant, small business, and all others.

The town would be required to determine the definition of a small business.