(rdnewsNOW file photo)

By Josh Hall (Twitter: @Vancan19)

province says it's, "living within our means"

Downtown Business Association chides province for being in arrears on improvement levy

Sep 24, 2022 | 1:43 PM

Red Deer’s Downtown Business Association (DBA) says the province needs to fork up dues it refused to pay in 2021 and 2022.

The DBA collects a levy from all downtown businesses annually to pay for things like staffing, events and other programs and initiatives they plan to improve and liven up the downtown.

In May 2020, Executive Director Amanda Gould says the DBA was advised by the Ministry of Municipal Affairs under then Minister Kaycee Madu that starting in 2021, the payments wouldn’t be made for any of the provincially-operated buildings in the downtown.

As the Ministry of Municipal Affairs explains it: “Provincial buildings are exempt from municipal taxation. Instead, the province has given grants in place of the taxes (GIPOT) to municipalities where those buildings exist,” says Scott Johnston, press secretary to Minister Ric McIver.

“In 2019-20, GIPOT payments were reduced by 25 per cent and by 50 per cent in the following two years. This was done to reduce operating spending, while still providing a portion of the grant to contribute to the cost of municipal services provided to government properties.

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“In 2020, the government decided to discontinue GIPOT funding for business improvement area levies beginning in 2021,” Johnston continues. “This decision was consistent with the treatment of not paying GIPOT on any form of business tax.”

The province has several buildings and offices in downtown Red Deer, including for Fish and Wildlife, the remand centre, Alberta Infrastructure, Child and Family Services, the courthouse and others.

In 2020, the DBA’s levy budget was $419,900, but that dropped 40 per cent to $252,000 when the province decided it could opt out. That’s a difference of $167,900, with the province in arrears for 2021 and 2022 for a total of $335,800.

“We are asking for this decision to be overturned and for the province to reinstate the regulation with immediate effect so provincial buildings contribute to the DBA activities again,” says Gould. “With such a large number of provincial buildings employing a vast number of people in downtown Red Deer, they are all benefitting from the vibrancy we are working so hard to deliver but are not contributing like every other business has to.”

Gould said the province’s lack of payment also resulted in a 25 per cent cut in staff, as well as reduced salaries.

“This happened during the height of COVID, when the downtown needed DBA support more than ever. Despite this taking place throughout Alberta, Red Deer was by far affected the most,” she says

“If the provincial businesses were paying the GIPOT, they would be entitled to access any of the programs and services offered by the DBA. All of these buildings contain many staff, who during their breaks etc., enjoy all of the downtown activity put on the DBA and paid for by the rest of the business community, but without any contribution from their building.”

Johnston says the province is focused on a strategic direction that will lead municipalities toward a more prosperous future.

“This includes living within our means, and adjusting spending where appropriate,” he says. “Alberta is moving forward to a prosperous financial future. Albertans are doing their part to get us there. The government will do ours by sticking to our fiscal plan. We will continue our disciplined spending to maintain balance, and will continue to respect Albertans’ tax dollars by keeping our spending in line with other provinces.”

Meantime, Gould and the DBA met with Red Deer-North MLA Adriana LaGrange on Sept. 16 to discuss the matter.

The DBA notes that LaGrange seemed keen to help get the DBA back on track, but that the Education Minister’s team asked for two weeks to investigate.

rdnewsNOW inquired with MLA LaGrange’s office for comment.

“I was very happy to meet with the DBA representatives last week to hear their concerns regarding the changes to the amount collected from provincial buildings. While I made no promises that change would be forthcoming, I have drafted a letter to the Minister of Municipal Affairs in appreciation of our local DBA’s work and my strong advocacy for a reconsideration of the tax levy,” says LaGrange.

“A strong, vibrant downtown is a critical part of Red Deer’s economic recovery and I am fully supportive of all organizations and strategies that will further contribute to Red Deer’s overall success.”

The next DBA budget is set to be approved later this fall, with Gould sharing they’ll be proposing a small increase to the levy each business pays.