NAIOP

CapitalRegionNonResidentialTaxReport

Preparedby:ChrisBuchanan
AltusGroupLimited
D:780.930.7841T:780.930.8301ext2241M:780.231.0552F:780.930.8315
10180101StreetNW,Suite780|Edmonton,ABT5J3S4
Tuesday,April05,2016
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Scope

Thepurposeofthisreportistoanalyzethenonresidentialcompetitiveenvironmentfroma
propertytaxperspectiveoftheCapitalRegioninAlberta;specificallytheCityofEdmonton,as
wellascomparehowcompetitivetheCityofEdmontoniswhencomparedtoothermajor
marketswithinCanada.

Inreviewingthecompetitivenatureoftaxeswehavereviewedandanalyzed:

FiveyearnonresidentialmillratetrendsinEdmontonandcompetingmunicipalities;
Fiveyearnonresidentialassessmentsintherespectivemunicipalities;
Fiveyearnonresidentialtaxincreasesintherespectivemunicipalities;
Fiveyearnonresidentialmunicipaltaxbudgetanalysisincludingtheratiosofnonres
municipaltaxincreasesovertime;
Acomparisonofthetaxratios(nonresvsres)forEdmonton,Toronto,Ottawa,Calgary,
Vancouver,Winnipeg,MontrealandSaskatoon.

LimitingConditions

Uponreviewoftheoriginalscopeseveralissuesaroseinthecompilationoftherequireddata
thatrequiredsomemodificationofthescopeoftheproject:

TheassessmentinformationforStrathconaCountyislimitedtotheassessedmillrates.
Altuswasunabletofindreliablepublishedinformationonthetaxdollarscollectedor
thetotalassessmentratesofthevariousclassesofpropertieswithinthemunicipality.
HistoricaldatawithinAlbertabeyondthefiveyeartimeframewasdifficultto
accumulateforthesmallerjurisdictions,thereforeonlyinformationwithinthefiveyear
timeframewasutilized.
Duetothecomplexityofotherjurisdictionsandtheavailabilityandreliabilityof
informationbeyondthepreviousyearsassessmentfigures,onlyaoneyearreviewof
municipalitiesoutsideofAlbertawasperformed.

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MillRates

Initssimplestformthemillrateisthebasicwayinwhicheachmunicipalitydeterminesthe
taxestobeleviedagainstanindividualproperty.Taxesaredeterminedbymultiplyingthe
propertyassessmentbythemillratethendividingby1,000.

IntheCapitalRegionin2015,nonresidentialmillratesrangedfromalowof9.61inParkland
Countytoahighof18.85intheCityofEdmonton.TheCityofEdmontonsnonresidentialmill
rateisapproximately65%higherthanthemedianmillrateinthesurroundingmunicipalities
and33%higherthantheCityofCalgary.

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PopulationGrowth
Albertahasexperiencedaperiodofpopulationgrowth.Belowisachartshowingthelastfive
yearspopulationgrowth:
2011 2012 2013 2014 2015
Municipality PopulationPopulationPopulationPopulationPopulation
Edmonton 812,201 817,498 847,712 877,926 895,000
St.Albert 61,466 60,994 62,125 63,255 64,004
SpruceGrove 26,171 27,023 27,875 29,526 32,036
Leduc 24,139 25,482 27,241 28,583 29,304
SherwoodPark 64,733 65,465 67,124 68,782 68,782
Calgary 1,090,936 1,120,225 1,156,686 1,195,194 1,230,915
*Italicsindic ateestimatedpopulation

TheCityofEdmontonspopulationhasgrownby10.2%since2011.Thisisslightlybelowthe
averageof12.9%fortheCitiesintheCapitalRegion.Similarly,theCityofCalgarygrewby
12.8%overthesametimeframe.

Inflation
Edmontonhasexperiencedmoderatelevelsofinflationoverthelastfiveyearsaccordingto
StatisticsCanada.Overthelastfiveyearsinflationhasrangedfrom1.1%to2.5%intheCityof
Edmontonandfrom1.0%to3.0%intheCityofCalgary.
Inflation
City 2011 2012 2013 2014 2015
Edmonton 2.50% 1.10% 1.30% 2.20% 1.20%
Calgary 2.20% 1.00% 1.70% 3.00% 1.20%

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AssessmentandTaxBase
Between2011and2015theoverallnonresidentialassessmentbasehasgrownineach
municipalityintheCapitalRegion.Inadditiontotheassessmentbase,thetotaltaxescollected
fromnonresidentialpropertieshavealsoincreased;however,theamountoftaxcollectedover
theperiodhastypicallybeenoutpacedbytheoverallassessmentgrowth.Theexceptionstothis
aretheCityofEdmontonandParklandCounty.

FiveYearNonResAssessmentBase
2011 2012 2013 2014 2015
Municipality NonResAsmt NonResAsmt NonResAsmt NonResAsmt NonResAsmt
Edmonton $34,053M $33,909M 0.4% $37,399M 10.3% $41,030M 9.7% $43,372M 5.7%
St.Albert $1,027M $1,130M 10.1% $1,254M 11.0% $1,388M 10.7% $1,558M 12.2%
SpruceGrove $533M $578M 8.5% $659M 14.1% $767M 16.3% $917M 19.6%
Leduc $932M $1,054M 13.1% $1,259M 19.5% $1,511M 20.0% $1,749M 15.8%
LeducCounty $3,699M $3,025M 18.2% $3,351M 10.8% $3,784M 12.9% $4,313M 14.0%
Parkland $1,901M $2,805M 47.6% $2,900M 3.4% $3,139M 8.3% $3,446M 9.8%
Calgary $59,957M $62,531M 4.3% $74,413M 19.0% $82,812M 11.3% $88,731M 7.1%

FiveYearNonResTaxes
2011 2012 2013 2014 2015
Municipality NonResTax NonResTax NonResTax NonResTax NonResTax
Edmonton $479M $514M 7.4% $544M 5.9% $603M 10.8% $656M 8.8%
St.Albert $13M $13M 6.5% $14M 6.2% $15M 6.2% $16M 7.2%
SpruceGrove $5M $5M 12.7% $6M 10.0% $7M 13.5% $7M 9.2%
Leduc $10M $10M 6.4% $11M 9.6% $13M 10.9% $14M 13.7%
LeducCounty $27M $22M 16.2% $25M 9.3% $27M 9.5% $29M 8.2%
Parkland $13M $18M 43.2% $20M 5.6% $23M 15.5% $26M 13.4%
Calgary $537M $594M 10.7% $643M 8.2% $682M 6.1% $772M 13.1%

TheCityofEdmontonsnonresidentialassessmentgrowthof27.4%versusthenonresidential
taxescollectedincreaseof37.1%createsanunfavorabletaxpositionof9.7%fornonresidential
propertyownersintheCityofEdmonton.Incontrast,theCityofCalgarysnonresidential
assessmentgrowthof48.0%hasoutpacedthetaxincreaseof43.7%resultinginafavorabletax
positionof4.3%.

FiveYearIncreaseCommercialAssessmentvs.Tax
2011 2015 2011 2015
Municipality NonResAsmt NonResAsmt NonResTax NonResTax
Edmonton $34,053M $43,372M 27.4% $479M $656M 37.1%
St.Albert $1,027M $1,558M 51.7% $13M $16M 28.8%
SpruceGrove $533M $917M 72.1% $5M $7M 53.7%
Leduc $932M $1,749M 87.6% $10M $14M 47.2%
LeducCounty $3,699M $4,313M 16.6% $27M $29M 8.6%
Parkland $1,901M $3,446M 81.3% $13M $26M 98.2%
Calgary $59,957M $88,731M 48.0% $537M $772M 43.7%

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OverallTaxGrowth
Asmunicipalitiesgrowtheirneedfortaxdollarsunderstandablyincreases.Belowisachart
showingtheCityofEdmontonstaxbasegrowthversespopulationgrowthandinflation.

Edmonton
Year TaxRevenue YoY
2015 $1,335M 8.5%
2014 $1,230M 10.8%
2013 $1,111M 8.2%
2012 $1,027M 7.8%
2011 $952M 7.4%
2010 $886M 7.3%
2009 $826M 7.7%
2008 $767M 14.9%
2007 $668M 10.8%
2006 $602M

OverthelastfiveyearstheoverallgrowthinrequisitionedtaxesintheCityofEdmontonhasby
faroutpacedthecombinationofinflationandpopulationgrowth.Inthistimeperiodthe
municipaltaxbasehasincreasedby40.24%comparedtothecombinedpopulation(10.19%)and
inflation(5.80%)increaseof15.99%.
Anotherwaytocomparethetaxrequirementsofvariousmunicipalitiesistoreviewthetotal
propertytaxespercapita.

MunicipalTaxesperCapita
$1,600

$1,400

$1,200

$1,000

$800
2011 2012 2013 2014 2015

Edmonton St.Albert SpruceGrove Leduc Calgary

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TaxesperCapitaCities
2011 2012 2013 2014 2015
Edmonton $1,172 $1,256 $1,310 $1,401 $1,492
St.Albert $1,220 $1,286 $1,328 $1,357 $1,412
SpruceGrove $841 $881 $917 $958 $963
Leduc $1,121 $1,127 $1,148 $1,201 $1,319
Calgary $999 $1,057 $1,141 $1,189 $1,229


In2015thetotaltaxespaidpercapitawerehighestintheCityofEdmonton.TheCityof
Edmontonwas9.3%higherthanthemediantaxespercapitaof$1,365withincitiesofthe
CapitalRegionand21.4%higherthantheCityofCalgary.

AllCapitalRegionmunicipalitieshaveraisedtheoveralltaxbasesignificantlyoverthelastfive
years.TheCityofSt.Alberthasbeentheleastaggressivewithanaverageincreaseof4.8%per
yearandParklandCountybeingthemostaggressivewithanaverageannualincreaseof11.2%.
TheCityofEdmontonisjustabovetheregionalaverageat8.8%.

St.Albert SpruceGrove Parkland

Year TaxRevenue YoY Year TaxRevenue YoY Year TaxRevenue YoY
2015 $90,341,735 5.2% 2015 $30,863,841 9.1% 2015 $49,362,757 10.2%
2014 $85,841,944 4.0% 2014 $28,283,340 10.7% 2014 $44,796,213 12.1%
2013 $82,519,091 5.2% 2013 $25,547,891 7.3% 2013 $39,945,118 4.7%
2012 $78,408,660 4.5% 2012 $23,816,236 8.3% 2012 $38,162,192 17.9%
2011 $75,002,827 2011 $21,997,800 2011 $32,370,675

Leduc LeducCounty Edmonton

Year TaxRevenue YoY Year TaxRevenue YoY Year TaxRevenue YoY
2015 $38,655,015 12.6% 2015 $44,337,188 5.4% 2015 $1,335M 8.5%
2014 $34,320,365 9.8% 2014 $42,050,631 6.7% 2014 $1,230M 10.8%
2013 $31,260,971 8.9% 2013 $39,428,387 7.0% 2013 $1,111M 8.2%
2012 $28,713,949 6.1% 2012 $36,863,465 8.7% 2012 $1,027M 7.8%
2011 $27,054,004 2011 $33,923,350 2011 $952M

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NonResidentialTaxBias
Taxbiasisasimpleratiotoshowtherelationshipbetweenthepercentagesoftaxespaidbythe
nonresidentialsectorincomparisontothepercentageofthetotalassessmentbase.The
formulaisasfollows:

%ofTaxesNonResidential
%ofAssessmentNonResidential

2015
Municipality NonResAsmt TotalAsmt Asmt% NonResTaxes TotalTax Tax% Bias
Edmonton $43,372M $164,329M 26.39% $656M $1,335M 49.15% 1.86
St.Albert $1,558M $11,274M 13.82% $16M $90M 18.07% 1.31
SpruceGrove $917M $5,199M 17.64% $7M $31M 23.53% 1.33
Leduc $1,749M $5,535M 31.60% $14M $39M 37.50% 1.19
LeducCounty $5,168M $7,794M 66.31% $35M $44M 78.68% 1.19
Parkland $3,679M $9,480M 38.81% $27M $49M 55.27% 1.42
Calgary $88,731M $299,250M 29.65% $772M $1,513M 51.00% 1.72

Forexample,in2015theCityofEdmontoncollected49.15%ofpropertytaxesfromnon
residentialproperties;nonresidentialpropertiesrepresent26.39%ofthetotalassessmentbase.
Thisrepresentsaratioof1.86.

CommercialBias
2011 2012 2013 2014 2015
Edmonton 1.98 1.99 1.88 1.82 1.86
St.Albert 1.56 1.45 1.38 1.34 1.31
SpruceGrove 1.47 1.49 1.45 1.41 1.33
Leduc 1.44 1.37 1.29 1.20 1.19
LeducCounty 1.24 1.24 1.22 1.21 1.19
Parkland 1.62 1.40 1.41 1.42 1.42
Calgary 1.94 1.90 1.68 1.60 1.72


IntheCapitalregion,theCityofEdmontonsignificantlyoutpacesotherjurisdictionsinregards
tononresidentialtaxbias.Thisillustratesthephilosophyofhavingatypeofpropertyclass
paymorethantheirproportionalshareofthetaxrequirementsofthemunicipality.Each
municipalityhasabiastowardsnonresidentialproperty;however,thebiasintheCityof
Edmontonisnearlythreetimestheaveragebias(1.29)ofthesurroundingcommunities.

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OverthefiveyearperiodEdmontonhasanaveragebiasof1.91comparedtotheCapitalRegion
averageof1.45.Calgaryhasafiveyearaverageof1.77.

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NonResidentialTaxBias
Itisalsopertinenttoreviewtaxbiasandassessmentlevelsinthemajormunicipalitiesin
Canada.BelowisachartshowingthenonresidentialtaxbiasintheseCities:

2015
Municipality NonResAsmt TotalAsmt Asmt% NonResTaxes TotalTax Tax% Bias
Winnipeg $13,925M $74,347M 18.73% $132M $504M 26.14% 1.40
Ottawa $22,718M $145,477M 15.62% $210M $791M 26.60% 1.70
Saskatoon $5,950M $24,120M 24.67% $50M $175M 28.82% 1.17
Toronto $104,971M $527,620M 19.90% $1,470M $3,769M 38.99% 1.96
Edmonton $43,372M $164,329M 26.39% $656M $1,335M 49.15% 1.86
Calgary $88,731M $299,250M 29.65% $772M $1,513M 51.00% 1.72
Montreal $46,521M $245,537M 18.95% $1,734M $3,159M 54.88% 2.90
Vancouver $42,309M $251,110M 16.85% $323M $693M 46.65% 2.77

InmajorcentresacrossCanadaweseeaclearbiastowardsnonresidentialproperties.TheCity
ofEdmontonfallsbetweenthemedianbiasof1.79andaveragebiasof1.93.

Thechartaboveshowsthepercentageoftheoveralltaxbasethatnonresidentialtaxaccounts
for.TheCityofEdmontoniswellabovetheaverageof40.3%.

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Forcomparisonpurposes,Altushasreviewedtheassessmentspersquarefootandtaxesper
squarefootfordowntownclassAofficepropertiesineachmajorcentreacrossCanada.

TheCityofEdmontonfallsinthemiddleofthegroupwithataxrateof$5.61/sf.Thisis
comparabletowhereEdmontonsvaluepersquarefootratesacrossthecountry.

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Conclusions

WithintheCapitalRegion,theCityofEdmontonhasexhibitedthehighestnonresidentialmill
rate,municipaltaxespercapita,andnonresidentialtaxbias.Inaddition,theoveralltax
demandintheCityhasfaroutpacedthepopulationgrowthandinflation.

Whencomparedtoothermajormunicipalitiesacrossthecountry,thebiastowardsnon
residentialpropertiesistowardstheaverage;however,uponremovingthelargemetropolitan
marketsofToronto,MontrealandVancouver,Edmontonexhibitsthelargestnonresidentialtax
biasofthemorecomparablemidsizedmarketsofOttawa,Winnipeg,andCalgary.

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Notes:

1. TheassessmentinformationforStrathconaCountyislimitedtotheassessedmillrates.
Altuswasunabletofindreliablepublishedinformationonthetaxdollarscollectedor
thetotalassessmentratesofthevariousclassesofpropertieswithinthemunicipality.

2. Theassessmentfiguresandtaxrevenuesarecalculatedusingtheapplicableyears
propertytaxbylawswhenavailableandmaybedifferentthantheactualtaxesand
assessmentfiguresofthemunicipalities.

3. Allopinions,estimates,data,andstatisticsfurnishedbyothersourcesarebelievedtobe
reliable;however,wecannotguaranteeitsvalidityoraccuracy.Possessionofthisreport
orcopiesthereofdoesnotcarrywithittherightofpublication.

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