Jack Mintz: Canmore’s new ‘livability tax’ will make house prices even harder to live with

A housing development near the Three Sisters mountains on the eastern edge of Canmore, Alta. Photo by Colette Derworiz/The Canadian Press files

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Canmore, Alta., is a picturesque town offering people who live there the joys of fresh air, mountains and skiing. The town provides the good life to higher-income Albertans: median family income is $125,000, 30 per cent higher than in the rest of Alberta.

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As of 2023 about three-quarters of Canmore’s 9,100 dwellings were occupied by individuals or families who were residents, while other homeowners were non-residents.

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In addition to its natural attractions, Canmore has also been financially well-managed. The latest financial statements show a surplus of $11 million (on revenues of $83 billion and expenditures of $72 million), largely due to surging investment income and development levies. A 2023 Ipsos survey of 400 residents indicated that over 90 per cent were satisfied with their quality of life. Any mayor or councillor would also be thrilled at the 85 per cent support for the town’s programs and services.

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There is one large cloud darkening the sky, however. The survey found concern over housing affordability. This prompted the town council to put social housing on the front burner. But it has come up with the wrong solution: more taxation, which is likely to discourage supply.

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As in many other parts of Canada, Canmore’s housing costs have risen sharply in recent years. They’re up fully 70 per cent since 2018, reaching a median price of $1.3 million last month. That’s double Calgary’s median price of $570,000, though still far short of Banff’s $2.1 million. Of course, housing supply is severely limited in Banff, which has made Canmore popular sitting outside Banff National Park.

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You would think Canmore’s council would look for ways to reduce the housing squeeze by freeing up land and encouraging more homebuilding. But in fact housing starts have fallen — from 452 units in 2019 to 250 in 2023 (with rock bottom being 162 starts in 2021). Both federal and provincial authorities have criticized Canmore’s town council for taking too long to issue building permits.

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Instead of streamlining its regulations Canmore decided to raise taxes to curb demand. For 2025, both expenditures and revenues are ballooning 20 per cent, to $98 million. Most new revenues are coming from higher taxes rather than growth. Property tax rates are rising by an inflationary 3.9 per cent, but the biggest hit is coming from a new “Livability Tax” on “vacant” homes. It is expected to generate $10 million, which will be put into a reserve to build social housing.

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The Livability Tax applies to any “tourist home,” defined as one owned by someone who does not have a Canmore address on their driver’s licence or personal income tax statement and fails to live at least 183 days a year in Canmore (of which 60 days must be consecutive). The Livability Tax rate on the vacant home results in non-resident homeowners paying almost three times more municipal tax than residents. For example, at the current median housing price, municipal property taxes would be $7,410 rather than $2,495 for a non-resident homeowner — and that doesn’t include the provincial education tax, which is also a property levy.