Municipal Revenue Generation and Development in the Calgary and Edmonton Metropolitan Regions

Municipal reliance on property taxes and the competing priorities of municipalities—in terms of where they plan and approve land development within their boundaries—in order to capture new property taxes, has led to political conflict between adjacent municipalities.Nowhere in Alberta is this more evident than in the Edmonton and Calgary metropolitan regions, where sustained high-levels of growth has led to the expansion of the core-cities, rapid residential development rates in peripheral urban centres and the rise urban-scale development in the rural municipal districts – spurring intrametropolitan competition, harsh words and hurt feelings amongst municipalities. In response to this ongoing conflict, the province and at times the municipalities themselves have developed successive regional planning frameworks over the past 60 years to guide development and encourage—and at times enforce—intermunicipal collaboration. In an exploration of the contemporary relationship between municipal finance and development patterns in the Calgary and Edmonton metropolitan regions, we use municipal property tax and building-permit data for new residential, commercial and industrial development to track the incidence of development since 1983 and the property tax rates for municipalities in both regions from 2001 to 2015. In looking at the tax data there is evidence of increasing competition among municipalities, in particular for non-residential development; however, the trends could also be consistent with collusion. In looking at the building permit data, although there has been a lot of development in the peripheral urban and rural municipalities, proportionately, growth and development has occurred overwhelmingly in the core-cities. Our findings point to a system where local development considerations in both metropolitan regions, and the municipal prerogative to set municipal tax rates to attract development, take precedence over the regional planning frameworks in place.