Property Tax Penalties, Numbers separating the facts from the BS.

The bs on this property tax penalty issue gets deeper and deeper.


First of all I will start out by saying yes everybody should pay their taxes on time, their bank payments, credit card bills, utilities etc, in a perfect world they would. This world is far from perfect and that’s why all of the above get to charge you interest on the outstanding balance on your account.

I quote from Councilor Gallants blog. “Our Director of Finance and Systems confirmed that over half of the total is residential homes and businesses, while the remaining 46% or so is attributable to land developments and other parties.”

So I said 50% they say 46% not much of a difference. I do not know of anybody that’s saying almost all these back taxes are tied to one developer.

So do you think this penalty will have an impact on the 46%? No, they will just owe more. Out of the other 54% I expect most of the businesses will clean up their accounts so who will the 50% penalty impact? Residents who find themselves in the unfortunate position of not being able to pay their taxes.

Some people are still talking about the previous penalty being one of the lowest in the province at 10%. It was not 10%, it was 10% on June 30th and another 10% on January 1st which compounds to 21% annually.

Now we can be proud we will have one of the highest rates in the province.

So let’s talk about numbers under the old tax penalty a home owner that did not pay their taxes for three years on a home with a annual tax bill of $1800 would by the time their home went to a tax sale owe $8002 of which $5400 would be back taxes and $2602 in penalties

Now that same home owner will owe $13253 of which $5400 would be back taxes and $7853 would be penalties.

That’s a whopping $5251 difference in penalties!

I hear the line that people not paying their back taxes is putting pressure on the municipality to cut services due to shortfalls in revenue, what a crock. Last year the budget for taxes was $6,439,407 how short was the municipality on its tax revenue? Not one penny $6,765,427 came in $326,020 more than anticipated.

Fact over the last six years $34,407,633 in tax dollars was budgeted to come in, the actual dollars that were collected $34,806,978.

Then I hear the line people are investing their money elsewhere instead of paying their taxes (its getting deep now) according to the Globe and Mail today the top paying mutual fund in Canada over the last 12 months was the “Canadian Long term fixed Income Fund” that gained 12.69%.

Can you imagine all the conversations around the Pass the last year that went like this “Martha lets not pay our taxes this year and incur the 21% penalties, instead we will take that money and invest it in the Canadian Long term fixed Income Fund we could be making up to 12.69%.

Then I hear the line “the taxpayers that do pay on time are being penalized by these people that owe back taxes”. That is not the case, every tax dollar that was projected to come in over the last six year came in and more.

Second if you look in the municipalities audited financial statements they have collected $385,993 in penalties in that timeframe. The municipality every year budgets under revenue for an average of $55,000 to come in from penalties, so if these dollars are not there where do you think that revenue will come from?

Yes your right the rest of us will be penalized.

The present system works every year somewhere around 3-5 taxpayers are threatened with a tax sale out of 4500 tax notices that go out. Less than one tenth of one per cent.


Note: If you disagree with the penalties you can do the following:  

Phone Marion Vanoni at 403-562-8833 or email her at finance@crowsnestpass.com.
Or phone the municipality and ask for a list of the council members phone numbers and give them a call.


The call you make today may well reflect on what tax increases you see this coming June, I have always said politicians love nothing more than silence.  

The Shell Game

On November 17, I wrote this post: http://crowsnestpasshome.blogspot.com/2011/11/financing-councils-dreams-another-pot.html

Over the last week, I have heard many statements regarding the issue of back taxes:

Lets address some of these comments going back to my original post, remember I said in my mind there are three catergories of taxpayers in arrears.

One being the 50-60% that is owed by a developer, second the people that miss the deadline for one reason or another and have no incentive to pay until the end of the year and third the people that just can’t or struggle to pay.

So back to the comments being made:

1- "The current 10% penalty is one of the lowest in the province and hardly a deterrent". First of all that’s just plain not true if you don’t pay your taxes you get nailed with 10% in June and a further 10% Jan 1st. (By my math that’s 20%)

2- “People are using there money elsewhere by not paying their taxes”. Certainly would not make a lot of sense to be delinquent on a bill that I am going to be charged 20% interest on versus investing the cash in a term deposit at 1-2%.

3- “Yes, some of those unpaid taxes are from developers such as RiverRun etc” How do we determine that? Maybe the problem as been going on for years?. In the audited municipal financial statements there is a section called notes, under that is a sub section titled “Taxes and Grants in place of Taxes receivable” lets look at the last five years.

• 2006-Total $203,669

• 2007-Total $244,727

• 2008-Total $268,400

• 2009-Total $357.519

• 2010-Total $570,581



Notice the numbers don’t really take a big jump until 2009 I think that really reinforces my argument that 50-60% of the arrears are owed by a developer, spilt 2010’s number in half and your almost back to the 2008 number.

4-“ but we have numerous residents who play the shell game every year.” “Numerous” that’s a fairly harsh word, the municipality sends out at least 4500 tax notices a year in my six years on council there was years we saw alarmingly high numbers of people faced with tax sales for being three years behind. Some years as high as 5 or 6. Yes everybody should pay their bills on time but we are not even talking about 1% of our taxpayers going to a tax sale we are talking about one tenth of one per cent. I think once you pull out the number owed by that one developer above you will find that we are very comparative to other communties in Alberta in addition to the historical number for the Crowsnest Pass.

5-Lets assume for a moment we became that unique municipality where everybody paid there taxes on time where would that traditional $40-50,000 in interest income come from?