My name is Scott Hennig and I am the Alberta director of the Canadian Taxpayers Federation.

The Canadian Taxpayers Federation is a non-profit, non-partisan advocacy organization, committed to lower taxes, less waste and more government accountability.

We have 60,000 supporters nation-wide with 14,000 in Alberta, and roughly 3,000 here in Calgary.

It’s a pleasure to be here today to discuss the revisions to the assessment review board filing fees.  I would like to first thank council for bringing back this important issue, and the administration for the work they have done so far.

Many of the previous speakers have clearly identified some concerns regarding the proposed increase in appeal fees, but I hope to give you the CTF’s perspective on the matter.

For starters, and as mentioned in the letter the CTF recently sent to City Council on this issue, we are generally supportive of the desire to recoup a higher percentage of the Assessment Review Board’s costs through filing fees.

CTF supporters have told us that they would rather see higher user fees and fees-for-service than property taxes. 

And considering the already recommended 25% property tax hike over the next three years, relieving some costs of the ARB from the property tax base would be welcomed.

That being said, we have two concerns with the proposed solution to increase the current recovery rate of 13.3%. 

The first being the focus on fees as the mechanism to reduce appeals, rather than accurate assessments to reduce refunds. 

Because, you would recover more than 13% of your costs if there were fewer incorrect assessments and thereby refunds of filing fees.

And according to the City of Calgary Quasi-Judicial Boards 2007 Annual Report, over 70% of appeals heard by the board in 2007 resulted in reduced assessments either by the Assessment Review Board or by the Alberta Municipal Government Board.

And this is not a new trend.  According to the same document, 59% were lowered in 2006 and 78% were lowered in 2005.

One of the reasons listed for the suggested increase in filing fees has been to eliminate frivolous appeals.  While there are undoubtedly frivolous appeals being filed, I think again we have to look at the reason for this. 

Are frivolous appeals being filed because of the low filing fee or because of the high success rate?  I’m guessing a doubling or a tripling of the filing fee would still not reduce your appeals significantly, however, a lower success rate in appeals would.

If the assessment reduction rate was, say 5% rather than 70%, it would not matter whether the fee was $100 or $0, you would have less appeals. 

However, it’s hard to blame a property owner for appealing their assessment when they see such high success rates.

Our second concern is in relation to the manner in which the proposed fee increase has been designed.

As previously mentioned, our supporters favour fee-for-service increases rather than property tax increases.  However, the city needs to ensure that the proposed fees accurately reflect the cost incurred to provide that service.

Meaning, we would support an increase to the fees provided the city can prove that the fee reflects the actual costs. 

If the fee is larger than the cost, it would be, in essence a tax.

While I appreciate the information that has been provided by administration in all of the various packages, I have not yet seen the data that shows that the 1% appeal fee model is reflective of the costs. 

Although, I did find interesting the City Clerk’s information that the Petro-Can building’s fee would be $115,000, while the cost of the city to process their appeal would be $4,000

Again, the 2007 Annual Report suggests that the cost per complaint was $94 in 2005, $101 in 2006 and $89 in 2007.  This however, is an average, and it would not reflect the difference in costs associated with a residential appeal versus a large commercial appeal.

Although I have yet to be convinced that a 1% appeal fee would reflect that difference either.  As such, we cannot support the move to a percentage based system.

We do not want to see what should be user-fees turn into a defacto tax.  And it appears that a percentage based appeal fee would do just that.

In summary, the CTF believes that steps should first be taken to address the real issue, which is incorrect assessments, before attempting to recover costs through higher fees. 

However, we are aware that fees have not risen since 1995, while costs surely have, and as such would not oppose a fee increase per se.  But that fee increase would have to accurate reflect the cost of the appeal. 

Something closer to the City of Edmonton’s new fee structure would likely be more acceptable.  We would though recommend that the City do more work to identify the actual costs of each appeal first.

By: Scott Hennig
Posted: December 31, 2008
Topic: Alberta

Contact the regional director Scott Hennig for further information.

Type: Related

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