OLDS — The provincial budget and some government policies have created a “perfect storm” for Olds residential and business property owners, says Coun. Darren Wilson.
Wilson was the municipality's deputy mayor at the time Alberta's 2025 budget was unveiled on Feb. 27.
One of the biggest impacts he said is the education portion of property tax bill, which is estimated to be increasing by $570,000 in Olds -- a 12 per cent hike year-over-year.
“This level of increase is unprecedented and will increase property taxes for all property owners,” the Town of Olds' chief administrative officer Brent Williams wrote in an email.
He said the education tax amounts account for about 30 per cent of residential property tax bills and about 33 per cent of business property tax bills in Olds.
Wilson said provincewide, the education tax is rising by 6.3 per cent, and 6.4 per cent for non-residential property.
The plan for education tax
He said the provincial government’s plan is to structure property taxes so that they generate tax revenue equivalent to one-third of the operating cost for the ministry of education by 2026-27. He said the plan is another 10 per cent increase in property taxes to reach that goal.
Wilson noted that property tax is the main source of revenue for municipalities while the provincial government has “many levers” it can pull to both distribute grants and obtain the revenue it needs but municipalities don’t.
Wilson said this makes an already tough fiscal environment for the Town of Olds even worse due to the fact that property tax is almost entirely the only way it can raise revenue to operate and fund projects to improve the community.
No taxpayer likes to see their property taxes increase, which puts the municipality in a real bind.
Wilson said most taxpayers don’t understand that municipalities do not collect education tax for their own coffers. They're required by law to collect that money and remit all of it to the provincial government.
“With these type of increases to property tax to fund education, the Town of Olds will be under increasing pressure to limit future increases to municipal property taxes, which is the primary source of revenue to provide the core essential services and maintain adequate levels of service requested and expected by our community,” Wilson wrote.
He said hence, administrative staff have been having “difficult and challenging conversations” since current town council was elected.
Wilson pointed out that he’s not only a Town of Olds councillor but also a local taxpayer, so these costs hit him hard too.
He predicted that the shift of education costs onto the property tax “will result in compromise and trade-offs” as administrative staff and council try to strike a balance “between affordability, service level and municipal tax increase.”
Utility cost not addressed
Furthermore, Wilson said, the provincial budget did not address another concern of the Town of Olds: utility costs, specifically transmission and distribution costs.
These two cost components, as well as administrative and site fees typically account for 50-60 per cent of utility bills, Wilson wrote.
He said the actual energy cost per kilowatt hour of utilities is “relatively minor.”
Wilson said while the province has provided some relief from regulated rate option to the rate of last resort as well as capital cost recovery for construction of future energy generating facilities, “there is still an opportunity to address utility affordability concerns by equalizing transmission and distribution costs across all Alberta.”
Williams said on the positive side of the ledger, Grants In Place of Taxes (GIPOT) will be restored by 2026.
That’s the money the provincial government pays municipalities in lieu of taxes on government property.
Williams said in the case of Olds, that will result in an increase in GIPOT from $15,884 in 2024 to $23,825 in 2025, and $31,767 in 2026.
As a result, “we’ll get an extra $8,000 this year,” he wrote.
Capital funding falling
Wilson noted that the Town of Olds is still trying battling water loss: infiltration and inflow.
This year, the price tag for that work is expected to be about $1.8 million. The town’s total budget for capital projects this year is a little more than $5 million.
At the same time, he noted that the amount of money the provincial government has been providing to municipalities has been falling over the past several years.
Wilson said his understanding is that the Town received about $2.1 million in 2014 and this year, it’s about $1.4 million.
“It is creeping up. It is climbing up. There is some restoration from the province, but we've still got a ways to go to restore funding to previous levels, and that is a challenge for the town, and it will be for a while,” Wilson said.
“The perfect storm is we only have one taxpayer and we've got downloading of services without funding following those services,” he said.
“We are one taxpayer, and affordability is huge, as we all know, doesn't matter whether you're buying gas at the retail station, your avocado and grapes in the grocery store, or you're paying your property taxes and your franchise fee and your utility bills.
“We've got an affordability issue, and it's coming to a head. Taxes every which way you look, are going up. Fees are going up. The cost of living is going up.
“We are squeezing an already compromised or vulnerable taxpayer every time we turn around.”
Not only that, Wilson noted that many of the amenities Olds residents enjoy, like the Aquaplex and Sportsplex are aging. Sooner or later, they will have to be substantially renovated, if not replaced. That’s going to be very expensive and he wonders how that will be paid for.
Municipalities are responsible for roughly 60 per cent of the infrastructure. Our funding that we receive, however you want to define it, there's nowhere near enough to help us maintain adequate service levels,” he said.
Wilson said the roof of the Sportsplex alone will have to be replaced in a couple of years. His recollection is that the cost of that work has been pegged at about $2 million.
Wilson said expansion and the renovation of the Sportsplex is in the neighbourhood of $50 million and a new Sportsplex is expected to be in the $85 million range.
“Clearly, the town doesn't have that kind of money and any expenditure of that level would require significant partnership with county and the province and the feds and the town, and maybe even some private partnership as well,” he said.
Wilson said this “perfect storm” underlines the need for the Town of Olds to attract more businesses; not just small businesses, but big industrial/commercial ones to help pay taxes and thus give the Town some wiggle room to pay for various projects and improvements.
He noted that the pullout from Olds a couple of years ago of SNDL, the former marijuana production plant resulted in a loss of about $700,000 a year in tax and franchise fee revenues for the Town.
Wilson said Alberta Finance Minister Nate Horner’s comment that “we’re going to need to have hard conversations, as Albertans, about what we expect government to fund, the services that we want to see,” is bang on.
“When I read that, I'm thinking, ‘that's the world this council and this town and these residents have been living, certainly under the term of this council,’” Wilson said.
“When I look into my very fuzzy, hazy, milky crystal ball I don't see from a public finance public policy perspective, (that) this is going to get any easier for the residents.”
