Alberta Politics & Government Thread 3.0

[TheIronMaiden]

Originally Posted by bizaro86

Right. On a dramatically lower-than-market value. Farm land is taxed on a value set by its carrying capacity based on a formula. A formula that massively undervalues it. So farmers are paying, in most cases, tax on something like 10% of the actual value of their land. While everyone else pays tax on the full value of their land.

I think that there is a meaningful difference in the economic value of land when it is farmed, and property value if someone were to buy it. Sure a quarter is worth $800,0000 if it is treated like a fungible asset, but it is not, it is a resource, and the economic potential of growing crops is far beneath the property value.

[Cappy]

Originally Posted by White Out 403

You can only imagine the hot steaming takes if Notley won the election, how this was a frightened oil market reacting to the evil communist win

This announcement was intentionally delayed until after the election 100%.

Having worked at a company that performed mass layoffs like this, they are planned 6-12 months in advance. 3 days after a Provincial election? sure.

[bizaro86]

Originally Posted by TheIronMaiden

I think that there is a meaningful difference in the economic value of land when it is farmed, and property value if someone were to buy it. Sure a quarter is worth $800,0000 if it is treated like a fungible asset, but it is not, it is a resource, and the economic potential of growing crops is far beneath the property value.

One big reason for that is that expenses don't match the value - low property taxes are artificially inflating land prices.

I have a feeling many don't understand the scale of this discrepancy, so I think a quantitative example is appropriate. I went to a broker website and took the first farmland listing I found.

https://hansenland.ca/listings/656-acres-at-eagle-lake/
656 acres listed for $2.9 MM. That's a list price not a sold price, so it might be high, but it's probably in the ballpark. This listing is comprised of 5 taxable parcels:

https://arcgis.wheatlandcounty.ca/re...i=0&rn=7989000 assessed at $13,590

https://arcgis.wheatlandcounty.ca/re...i=0&rn=6244000 assessed at $450

https://arcgis.wheatlandcounty.ca/re...i=0&rn=7981000 assessed at $14,900

https://arcgis.wheatlandcounty.ca/re...i=0&rn=7983000 assessed at $16,490

https://arcgis.wheatlandcounty.ca/re...i=0&rn=7984000 assessed at $14,220

So the total assessed value of this farm is $59,650. The owner of this is paying tax on $60k in assessed value. It's currently listed for 50X that amount, so they're paying tax on 2% of what they listed it for. Maybe their list price is too high, so it could be that they're paying tax on 3% of the value or 4% of the value.

But personally, I think once we're above a 90% discount on the taxes that everyone else pays that's just splitting hairs.

But maybe you say, ok, that's too close to Calgary, that's affecting the value. The next parcel on that broker site is up between Caroline and Rocky Mountain House, a half section listed as "sold" with a price of $925k. https://hansenland.ca/listings/%c2%b...t-of-caroline/ It's two parcels, which I found on Clearwater County's assessment site:

https://clearwater.municipalwebsites...021_SUM_RP.PDF

and
https://clearwater.municipalwebsites...021_SUM_RP.PDF

Total assessed value of $22,120, so assessed value is 2.4% of list price.

Basically, I think there are two reasons that farms get a 95% plus discount on their taxes.

1) Farmers vote and control lots of ridings
2) The system is complicated enough that people in the city mostly don't understand how big the discount is.

[GGG]

Originally Posted by bizaro86

One big reason for that is that expenses don't match the value - low property taxes are artificially inflating land prices.

I have a feeling many don't understand the scale of this discrepancy, so I think a quantitative example is appropriate. I went to a broker website and took the first farmland listing I found.

https://hansenland.ca/listings/656-acres-at-eagle-lake/
656 acres listed for $2.9 MM. That's a list price not a sold price, so it might be high, but it's probably in the ballpark. This listing is comprised of 5 taxable parcels:

https://arcgis.wheatlandcounty.ca/re...i=0&rn=7989000 assessed at $13,590

https://arcgis.wheatlandcounty.ca/re...i=0&rn=6244000 assessed at $450

https://arcgis.wheatlandcounty.ca/re...i=0&rn=7981000 assessed at $14,900

https://arcgis.wheatlandcounty.ca/re...i=0&rn=7983000 assessed at $16,490

https://arcgis.wheatlandcounty.ca/re...i=0&rn=7984000 assessed at $14,220

So the total assessed value of this farm is $59,650. The owner of this is paying tax on $60k in assessed value. It's currently listed for 50X that amount, so they're paying tax on 2% of what they listed it for. Maybe their list price is too high, so it could be that they're paying tax on 3% of the value or 4% of the value.

But personally, I think once we're above a 90% discount on the taxes that everyone else pays that's just splitting hairs.

But maybe you say, ok, that's too close to Calgary, that's affecting the value. The next parcel on that broker site is up between Caroline and Rocky Mountain House, a half section listed as "sold" with a price of $925k. https://hansenland.ca/listings/%c2%b...t-of-caroline/ It's two parcels, which I found on Clearwater County's assessment site:

https://clearwater.municipalwebsites...021_SUM_RP.PDF

and
https://clearwater.municipalwebsites...021_SUM_RP.PDF

Total assessed value of $22,120, so assessed value is 2.4% of list price.

Basically, I think there are two reasons that farms get a 95% plus discount on their taxes.

1) Farmers vote and control lots of ridings
2) The system is complicated enough that people in the city mostly don't understand how big the discount is.

How does this compare to taxes on say an oil battery in owned land, or forestry, or say owning a campground.

[iggy_oi]

Originally Posted by bizaro86

Basically, I think there are two reasons that farms get a 95% plus discount on their taxes.

1) Farmers vote and control lots of ridings
2) The system is complicated enough that people in the city mostly don't understand how big the discount is.

A third reason might be that farmers somehow manage to fund a number of political action lobby groups despite being so hard done by that they need massive exemptions on their taxes and the lowest corporate tax rates in the country.

[bizaro86]

Originally Posted by GGG

How does this compare to taxes on say an oil battery in owned land, or forestry, or say owning a campground.

Oil battery land, forestry land, and campground land are all taxed in the same way, by an assessment of the market value of the properties. So they should all be paying their fair share. Most oil batteries and forestry operations are run on land leased from the province (or farmers for some batteries). Oil batteries would also pay an assessment based on the value of their equipment.

I did find tax assessment information for the Westward Ho Campground near Sundre, which is just to the south of the second listing I mentioned above. The parcel is 40 acres, and the land portion is assessed for $257k, or $6,425 per acre. The improvements (buildings, etc) are separately assessed for another $200k, but land to land should be reasonably comparable.

That's nearly 10X more than the $71/acre the farmland is taxed at. I'm sure there are some differences between the quality of the parcels, but that's a 89% discount in assessed value per acre for the farmland.

[TheIronMaiden]

bizaro86 you've made some really good, well researched posts.

While I understand your point. I think that the intrinsic value suppressing taxes on food production is in the interest of Canadian society. Inevitably, any increase in tax will be passed on to the consumer as profit margins of farmers are not so strong that they will simply swallow the cost.

[Iowa_Flames_Fan]

Well, farmers also make food, which all of us need in order to eat. I’m not giving an opinion on whether subsidizing that is “good” or “bad” (it’s probably a bit of a mixed bag) but to me one reason to give farmers favourable tax treatment is the fact that if you don’t it might lead to higher prices for things like bread and milk at the grocery store.

Edit to add: TheIronMaiden said it way better….

[Ozy_Flame]

Probably a good a place as any to post it:

Edmonton Journal - Opinion: Cutting corporate taxes in Alberta didn't trickle down

Statistics confirm the sustained weakness of capital spending in Alberta, despite lower taxes. Non-residential fixed capital spending totalled just $45 billion in 2021, almost 20 per cent lower than 2018. That equaled 12 per cent of provincial GDP in 2021 — the lowest since Statistics Canada began publishing provincial GDP data in 1981. Preliminary data suggests the investment share declined further in 2022, to just 11 per cent of GDP.

Alberta’s share of Canada-wide business spending has also declined to historic lows since taxes were cut: falling to 21 per cent in 2022, from 24 per cent in 2018. Perversely, Alberta has seen its share of Canada-wide business investment fall more since 2018 than any other province.

Meanwhile, B.C., Quebec, and Ontario have all increased their share of Canada-wide business investment — despite higher provincial corporate tax rates (12 per cent in B.C., and 11.5 per cent in Quebec and Ontario).

[D as in David]

Originally Posted by Ozy_Flame

Probably a good a place as any to post it:

Edmonton Journal - Opinion: Cutting corporate taxes in Alberta didn't trickle down

Statistics confirm the sustained weakness of capital spending in Alberta, despite lower taxes. Non-residential fixed capital spending totalled just $45 billion in 2021, almost 20 per cent lower than 2018. That equaled 12 per cent of provincial GDP in 2021 — the lowest since Statistics Canada began publishing provincial GDP data in 1981. Preliminary data suggests the investment share declined further in 2022, to just 11 per cent of GDP.

Alberta’s share of Canada-wide business spending has also declined to historic lows since taxes were cut: falling to 21 per cent in 2022, from 24 per cent in 2018. Perversely, Alberta has seen its share of Canada-wide business investment fall more since 2018 than any other province.

Meanwhile, B.C., Quebec, and Ontario have all increased their share of Canada-wide business investment — despite higher provincial corporate tax rates (12 per cent in B.C., and 11.5 per cent in Quebec and Ontario).

I blame the Alberta NDP for this for not getting re-elected in 2019.

[Mr.Coffee]

Originally Posted by Ozy_Flame

Probably a good a place as any to post it:

Edmonton Journal - Opinion: Cutting corporate taxes in Alberta didn't trickle down

Statistics confirm the sustained weakness of capital spending in Alberta, despite lower taxes. Non-residential fixed capital spending totalled just $45 billion in 2021, almost 20 per cent lower than 2018. That equaled 12 per cent of provincial GDP in 2021 — the lowest since Statistics Canada began publishing provincial GDP data in 1981. Preliminary data suggests the investment share declined further in 2022, to just 11 per cent of GDP.

Alberta’s share of Canada-wide business spending has also declined to historic lows since taxes were cut: falling to 21 per cent in 2022, from 24 per cent in 2018. Perversely, Alberta has seen its share of Canada-wide business investment fall more since 2018 than any other province.

Meanwhile, B.C., Quebec, and Ontario have all increased their share of Canada-wide business investment — despite higher provincial corporate tax rates (12 per cent in B.C., and 11.5 per cent in Quebec and Ontario).

That's pretty interesting, wonder what's causing all that?

[Aarongavey]

Originally Posted by Iowa_Flames_Fan

Well, farmers also make food, which all of us need in order to eat. I’m not giving an opinion on whether subsidizing that is “good” or “bad” (it’s probably a bit of a mixed bag) but to me one reason to give farmers favourable tax treatment is the fact that if you don’t it might lead to higher prices for things like bread and milk at the grocery store.

Edit to add: TheIronMaiden said it way better….

Maybe, you could get economies of scale if you just had corporate farms with a regular corporate tax rate. Maybe we have too many folks that own farms. Charging them regular tax rates could allow for consolidation and lower food prices.

[CroCop]

Originally Posted by Aarongavey

Maybe, you could get economies of scale if you just had corporate farms with a regular corporate tax rate. Maybe we have too many folks that own farms. Charging them regular tax rates could allow for consolidation and lower food prices.

Most farms in Southern Ab have long been incorporated for business tax purposes and small family farms are dwindling. Also though fewer farmers could result in less quality and quantity of farm commodities which could lead to higher prices for poorer food. Lastly farmers really don’t have a lot if any influence on the price of food.

[Street Pharmacist]

Originally Posted by Mr.Coffee

That's pretty interesting, wonder what's causing all that?

Lower reinvestment of O&G?

[Samonadreau]

Just think of all the farm writeoffs Sutter launders his Millions through.

[Harry Lime]

Just had a sincere conversation with a well put together (not joking) woman, who absolutely believes that books are being brought into schools so that teachers can turn children trans.

Saved by the ucp.

[GirlySports]

Originally Posted by Harry Lime

Just had a sincere conversation with a well put together (not joking) woman, who absolutely believes that books are being brought into schools so that teachers can turn children trans.

Saved by the ucp.

Has she boycotted anything? Otherwise, not seriously nuts yet.

[D as in David]

Originally Posted by Harry Lime

Just had a sincere conversation with a well put together (not joking) woman, who absolutely believes that books are being brought into schools so that teachers can turn children trans.

Saved by the ucp.

Well put together as in she hasn't seen Dr. Nick Riviera?

[belsarius]

Originally Posted by Ozy_Flame

Probably a good a place as any to post it:

Edmonton Journal - Opinion: Cutting corporate taxes in Alberta didn't trickle down

Statistics confirm the sustained weakness of capital spending in Alberta, despite lower taxes. Non-residential fixed capital spending totalled just $45 billion in 2021, almost 20 per cent lower than 2018. That equaled 12 per cent of provincial GDP in 2021 — the lowest since Statistics Canada began publishing provincial GDP data in 1981. Preliminary data suggests the investment share declined further in 2022, to just 11 per cent of GDP.

Alberta’s share of Canada-wide business spending has also declined to historic lows since taxes were cut: falling to 21 per cent in 2022, from 24 per cent in 2018. Perversely, Alberta has seen its share of Canada-wide business investment fall more since 2018 than any other province.

Meanwhile, B.C., Quebec, and Ontario have all increased their share of Canada-wide business investment — despite higher provincial corporate tax rates (12 per cent in B.C., and 11.5 per cent in Quebec and Ontario).

Here is the link to the actual report.

The Failures of Trickle-Down-Economics in Alberta

Pretty straightforward. Trickle down economics does 1 thing very well, increase corporate profits, but fails the economy in every other way.

[accord1999]

Originally Posted by Mr.Coffee

That's pretty interesting, wonder what's causing all that?

COVID, pipeline troubles with TMX, Keystone XL, Coastal GasLink and still no LNG export terminal, O&G companies paying off debt and trying to give something back to shareholders who suffered through stock performance.



But how greedy should Alberta be? Alberta only has <12% of Canada's population so 21% share of capital investment is already extremely high. Some Eastern Canadians still blame Alberta's oil boom for destroying their manufacturing base because it couldn't compete with a strong C$.