Janine Halbesma
Canadian Federation of Independent Business
There is a private members’ bill currently working its way through the Alberta legislature called Bill 202. Private members’ bills originate from individual MLAs and unfortunately, the truth is they seldom become law. However, here’s why your MLA should support this one when the legislature resumes this fall.
Calgary MLA Art Johnston first introduced Bill 202 in early 2009. It would create a provincially appointed municipal auditor general.
While municipalities have their financial statements audited each year, a municipal auditor general would have a much broader role. They could conduct audits to assess the value for money of municipal spending. They could do compliance reviews to ensure systems or programs are working effectively and efficiently. They could look at creative ways of delivering services. And the best part? This information could be made public.
Some provinces already have this type of function. To be fair, some municipalities in Alberta, such as Edmonton do, too.
Nonetheless, this bill would improve transparency and accountability of local expenditures across the province and small business owners support it. According to a recent survey from the Canadian Federation of Independent Business, 81 per cent of its Alberta members support the creation of a municipal auditor general.
Perhaps if this bill gets passed, the first audit could look at the fairness of the property tax system in Alberta?
According to CFIB’s 2008 Property Tax Fairness in Alberta report, most municipalities in Alberta are not treating businesses fairly when it comes to property taxes. In fact, of 351 Alberta municipalities, 231 charged higher rates on commercial properties compared to residential properties. In other words, if you own a house and business property of equal value, the municipal taxes on your business property are higher than on your home. Further, business owners often have to pay for additional municipal services that are provided free of charge to residents such as garbage collection.
Perhaps the second audit could look at what’s driving these property tax gaps? Municipal operating spending.
It is completely reasonable for municipalities to increase spending to account for inflation. The bulk of municipal spending is on salaries for workers so as their cost of living goes up it is only fair that their employer would increase their salaries to keep up. It’s also reasonable for municipalities to increase spending to account for population growth as it costs more to provide services to more people. However, according to CFIB’s first Alberta Municipal Spending Watch, most communities have been dishing out monies much faster than inflation and population have been growing. That’s simply not sustainable.
Not only that, the study also found that even among municipalities of the same size, per capita spending on day-to-day operating expenses varied significantly. There may be good reason for it, but it looks like it is time to ask some tough questions.
A municipal auditor general would be the perfect person to ask those questions, and hopefully give taxpayers some answers, too.