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The Debaters: An Urban Tax Reformer Squares Off With a Municipal Reeve

Bob Barss and Laurie Blakeman debate the Combined Low Expenditures Assessment

Jun 23, 2014

by Allison Myggland

left: Bob Barss, 57, President, Alberta Association Of Municipal Districts And Counties
right: Laurie Blakeman, 55, Liberal MLA, Edmonton Centre, Opposition House Leader

Photgraph Ryan Girard

Be it resolved that the vast majority of Alberta’s four million residents live in cities, and those cities are struggling to raise money for infrastructure. On the other hand, there are a small number of rural Albertan municipalities with few residents but fat – and we mean fat – infrastructure budgets. They raise this infrastructure money through the Combined Low Expenditures Assessment (CLEA). That tax is collected from the industrial owners of pipelines, transmission lines and other infrastructure – infrastructure that’s predominantly located in rural areas.

Last year, 94 per cent of the $1.5 billion raised by the tax went to rural areas; cities like Calgary and Edmonton and towns like Vegreville and Peace River, on the other hand, split the remaining six.

Liberal MLA Laurie Blakeman thinks that’s a raw deal for cities, towns and villages. Blakeman would like to see the CLEA money reallocated on a per-capita basis, which would mean densely populated areas would get a whole lot more – for instance, Edmonton, under Blakeman’s proposal, would receive an annual $1 billion boost. But Bob Barss, a reeve in the municipal district of Wainwright and the president of the Alberta Association of Municipal Districts and Counties, thinks that’s a bad idea. He says the CLEA funds should remain unsupervised and under municipal control.

Looks like we have a debate on our hands. Ding-ding!

AV: Explain how CLEA funds are allocated.

Bob Barss: They go into the municipal bank account, and each municipality determines how they allocate the funds. But the majority of it is used for infrastructure to maintain the roads and bridges to support the industry. There is maintenance that goes on year-round. And when you have industries in your communities there is a lot more maintenance than the communities that don’t have the industrial assessment. Those that don’t have it, they don’t get the revenue, but they also don’t have the expense of trying to keep up the infrastructure to support the industry.

Laurie Blakeman: I can’t find out for what exact purpose sparsely populated municipal districts and counties are using their industrial property tax, but I’ve heard the rhetoric about maintaining roads and shovelling snow. I suspect that each municipality, or municipal district and county, tries to give their citizens the best possible services, infrastructure and quality of living. But regionally, we have wildly divergent results with one town really struggling and another local municipal district building a golf course.

AV: Do you think the current system could be improved?

LB: Alberta as a whole contributes to the province’s growth and economic activity, and all Albertans should share in it. I admit that a redistribution system is not politically palatable, particularly with sparsely populated areas in the province holding more votes per person than larger centres. But that doesn’t mean we shouldn’t consider it, or a similar change, and I would remind everyone that the people living in villages, towns and cities make up two-thirds of Alberta’s population. It may be more workable to mandate revenue sharing between regional partners, but clearly the status quo is neither fair nor sustainable for Alberta’s cities, villages and towns.

BB: That’s already happening. I think councils work together. They look at the best ways to support their community and this is what it’s about: is the money coming into the communities? Is there a better way? That’s up to the councils. That’s their job, because [the provincial] government doesn’t have a say in this.

AV: Some suggest amalgamating municipal districts to share revenue and infrastructure costs would make a difference. Agree?

BB: The decision needs to be made between the local decision-makers. That’s local people making local decisions without any outside interference. And we [the municipal districts] agree that that is the best way. If you take any other way of doing it, what you’re creating is a forced amalgamation. And what we’ve seen in this province is that forced amalgamations don’t work very well. For the province to get involved and to say, “This is what is to be done” … well, I think that you’ll see a lot of unrest in the rurals – and the urbans as well.

LB: Yes, of course, it would. This would allow all citizens of a region to share in the responsibility for the progress of the area, as well as to have the tools – access to all of the financial resources – to address these issues. And it works both ways. The people in the rural sector would be able to access all of the financial and other benefits of the urban area, and the urbanites could access the regional and rural benefits.


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One Response to The Debaters: An Urban Tax Reformer Squares Off With a Municipal Reeve

  1. Don Good says:

    Regarding Bob Barss comment that “The decision needs to be made between the local decision-makers. That’s local people making local decisions without any outside interference.” Of course he supports the status quo; as long as the MD or County elected officials say “No” then nothing can/will change regardless of whether the majority of people in a region want it and the towns will remain shut out. How about letting regional decision makers make the decisions on a representative basis? In Bob Barss’ MD of Wainwright with a population of 4138 and the Town of Wainwright – population 6289 let the vote of the elected officials reflect the “will of the majority.” But that’s not what the AAMD&C supports. They want to retain control of Alberta’s inustrial tax base with an illusion of democracy. In Wainwright’s case the MD controls over $24,000,000.00 in industrial revenues with under 40% of the population while the 60% in the Town of Wainwright make do with under $350,000.00. By the eway, that’s every year, year after year. That’s certainly not fair. As pointed out, I believe by Bill Givens – the Mayor of Grande Prairie, municipalities are not communities, they are corporations to provide services to communities. The Town of Wainwight and the MD are both members of one community and themunicipal structures should represent this fact.