It may not be a common topic of office chit-chat, but there's a lot of buzz about municipal tax ratios in Fort McMurray right now.
"My friends are talking about it. They're very, very worried about it. That's the conversation around the water cooler," said Wildrose MLA Tany Yao.
Put simply, tax rates in Wood Buffalo Regional Municipality are out of whack and the NDP government wants to smooth them out. Right now, industry pays a rate 18 times higher than homeowners, meaning businesses foot more than 90 per cent of the municipal budget.
The government says nothing will change in the short-term, but any movement in the ratio would take dollars out of the pockets of homeowners.
"That could mean a substantial increase to our housing taxes and that can be absolutely devastating to a community," said Yao, who represents Fort McMurray-Wood Buffalo in the legislature.
Don Scott, a mayoral candidate in Fort McMurray who has served as a Progressive Conservative MLA, said it's a massive issue for the town and communication from the government has been poor.
"It has the potential to make this region unviable. People should be screaming their heads off at all levels of government for what's going on right now," said Scott.
The province has been picking away at the issue since last fall. Bill 21, which was legislation introduced last fall to "modernize the municipal government act," froze any business to residential tax ratio that was over 5:1. Bill 8, introduced last month, picks up where the earlier bill left off and now reads that any non-conforming municipality "shall reduce its tax ratio for subsequent years in accordance with the regulations" down to 5:1.
Those regulations have yet to be written, so municipalities don't know how much lead-time they'll have to comply.
For industry in the region, it's correcting a longstanding imbalance.
"This is definitely something CAPP supports," said Ben Brunnen, a vice-president at the Canadian Association of Petroleum Producers. "The municipal tax on industry is the second highest tax in the province, second only to royalties. It's not an insignificant impact on our bottom line."
Brunnen said he has no problem with the province's baby-steps approach to the issue.
"It's certainly not anything that needs to happen overnight," said Brunnen.
Officials in the municipal affairs department are at pains to reassure residents that nothing is changing immediately.
The goal is to find "a long-term, phased and balanced approach that improves industrial competitiveness and protects residents," Melinda Steenbergen, the press secretary for Municipal Affairs Minister Shaye Anderson, said in an email.
"It is anticipated that each municipality over this ratio will be provided a number of years to comply which will allow growth in property assessment to help reach the ratio and protect residential taxpayers," Steenbergen said.
Scott said the legislation couldn't come at a worse time. The community is still recovering from the devastating wildfire and the prolonged economic downturn in the province. The wildfire showed some companies they could operate out of the region and now Scott fears the tax base will be reduced even more as Fort McMurray becomes a fly-over community.
Keeping those workers in the area should have been the province's primary demand in exchange for the change in the tax ratio, said Scott.
"If industry wants a phased-in reduction in taxes, that's something that could've been done through negotiation," he said.
Alberta' non-conforming municipalities (ratio of business tax rate to residential rate):
Regional Municipality of Wood Buffalo 18.3:1
Clear Hills County 11.25:1
MD of Opportunity 8.85:1
Lac La Biche County 7.35:1
County of Wetaskiwin 7.28:1
Improvement District of Banff 6.74:1
Ponoka County 6.4:1
County of Two Hills 6.24:1
Lamont County 5.98:1
MD of Wainwright 5.86:1
ID of Waterton 5.76:1
Westlock County 5.72:1
County of Vermilion River 5.63:1
MD of Bonnyville 5.6:1
SV of Sunset Beach 5.59:1
Village of Nobleford 5.49:1
County of St. Paul 5.13:1
Municipality of Jasper 5.1:1
Municipal District of Lesser Slave River 5.04:1