In an effort to bolster the economy for the 2021 construction season, Edmonton’s city council will review a proposal to provide tax relief to developers of residential towers downtown.
Three developers; Open Sky, Edgar Developments and Langham Developments, spoke to executive committee at city hall on Monday about the challenges they’re facing during the COVID-19 pandemic.
City administration worked in consultation with the private developers to create an incentive program that would essentially freeze taxes on pending residential tower construction for multiple years.
“It would be a shot in the arm for downtown — for job creation — and get some projects moving in this construction season, would be the idea,” explained Mayor Don Iveson.
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The change would mean instead of paying increased property taxes as improvements are made and tenants are found, the developers would only pay the property tax as assessed before any construction was done.
The incentive would only apply to builds that would cost more than $10 million and create at least 50 new homes for Edmontonians in the downtown core.
“That ultimately, in the case of these residential buildings, will mean thousands of extra people living downtown in the coming years to support street life and the retail that is concerned about its future,” Iveson said.
Administration identified 10 projects that could be eligible, and if all of them move ahead, it could mean a potential loss of nearly $23 million in tax revenue.
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To make up for that, the city would pull from COVID-relief funding from Ottawa as well as its own savings.
The Canadian Taxpayers Federation said it’s happy to see government contemplating tax relief.
“We do need to get the economy going, we do need to create jobs, and the best way to do that is just by letting businesses and families keep more of their own money,” Alberta director Franco Terrazzano said.
He believes property tax reductions should happen across the board and not just industry by industry.
Terrazzano said it’s also important the lost tax revenue isn’t being put on the shoulders of already struggling families.
Edmonton has already committed to a zero per cent tax increase in 2021.
The proposal will be looked at in further detail by city council on Jan. 25.