Canmore’s vacancy tax will only be charged to non-Albertan second homeowners if the UCP majority government approves new laws it proposed.

Municipal Affairs Minister Dan Williams tabled the legislation Thursday as part of a suite of proposed changes to the Municipal Government Act.

Williams said the intent is to not charge a vacancy tax to Alberta residents since the provincial government’s “fundamental and primary responsibility” is to “put Albertans first.”

Meanwhile, the new laws don’t have a specific cap on what non-Albertan second homeowners can be charged, but Williams said he’d be “happy to speak with the municipality if they want to get my input on it.”

The changes come after Premier Danielle Smith directed Williams to “protect Albertans from specialized municipal taxes” in a mandate letter last September.

Williams said the province and the Town of Canmore worked “proactively” with one another before the new laws were announced.

“This is about putting Albertans first and making sure fair is fair for Albertans no matter where they are,” he said.

Vacancy tax gauntlet

Canmore’s vacancy tax has been through the legal and political ringer.

It survived Court of King’s Bench and Court of Appeal hearings, while also facing backlash from second homeowners, who make up about 25 per cent of property owners in the mountain town.

It became the main election issue last fall and has prompted regular debate at the council dais.

The program charges second homeowners an extra 0.4 per cent of the property’s assessed value. The municipality projected about one-quarter of the homes in Canmore were owned by part-time residents and estimated $10.3 million would be collected in taxes.

Mayor Sean Krausert said he liked the previous council’s rationale for the 0.4 per cent rate.

“It’s far lower than the vacancy taxes set in other jurisdictions that run between one per cent and five per cent of assessed value. … I think we’re well within the realm of reasonability,” Krausert said.

As of April 1, 300 second homeowners stated they were part-time residents from outside of Alberta. However, there were still 566 properties that hadn’t declared. The municipality plans to group those into the non-Albertan category.

What’s the tax for?

All of the money from the tax goes towards affordable housing in Canmore.

A 2024 housing study by Bow Valley Regional Housing indicated Canmore needs about 2,000 new homes by 2031.

Williams said the government understands the housing challenge in Canmore is a “unique circumstance,” particularly with the province’s goal of continuing to grow tourism to a $25-billion-a-year industry, but it has to balance economic and residential needs.

He said “creative solutions are very welcome” from municipalities.

Cost-of-living soars in Canmore

According to provincial statistics, Canmore is the most expensive community in Alberta.

A median assessed single-family home is about $1.5 million and a condo is about $800,000. However, sales prices are typically significantly higher than assessed values.

Municipalities can’t force private developers to build affordable housing in Alberta, but several companies still do. Five per cent of units at Spring Creek Mountain Village are affordable housing, while Three Sisters Mountain Village agreed to a minimum of 10 per cent, with a potential of up to 20 per cent, of affordable homes.

The municipality has plans to add more than 1,000 affordable units in the next 10 to 20 years.

Krausert said the goal is to provide affordable housing for people such as teachers, police officers, doctors and tourism workers who otherwise wouldn’t be able to pay for market homes.

“For the people that are looking to earn a living here, we also want them to be able to make a life here,” he said.