Why Alberta Should Say No to a Land Transfer Tax

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For Immediate Release, Calgary – Alberta’s deficit is high and might be growing. There are two solutions to fix that – either cut spending or raise new revenue.  The School of Public Policy has launched the Alberta’s Fiscal Future program to study various options for getting us back on track.

As part of that program, The School is looking at various tax revenue options. One is a tax used by BC and Ontario.  It’s the Land Transfer Tax.  That’s a tax on the sale of property.  That tax is generating a lot of revenue in BC and Ontario.  So, should we consider it in Alberta?

The answer is a definitive “no” according to noted tax expert Prof. Bev Dahlby and his co-author Braeden Larson.

This paper examines previous research on land transfer taxes in Canada, Australia and Europe, and concludes that such a tax would only add more volatility to Alberta’s resource revenue-based economy. A one-per-cent land transfer tax in Alberta would have yielded between $460 million and $500 million for provincial coffers in 2017. However appealing that amount of revenue sounds, the tax benefits do not outweigh the drawbacks. Land transfer values in Alberta can undergo substantial change from one year to the next, making a land transfer tax a highly precarious revenue source. Nor would a land transfer tax benefit Albertans who are in the market for a home. Studies show that such taxes discourage residential real estate transactions. If land transfer taxes are burdensome for homebuyers, they are equally so for sellers who may be compelled to lower their asking prices to make up for the extra costs. This leads to a drop in fair market value of homes with a negative impact on the volume and value of real estate transactions.

According to Dahlby, “While a land transfer tax could potentially raise a significant amount of revenue for the Alberta government it still would be insufficient to cover the province’s current fiscal deficit. The situation would be made worse by a negative spin-off effect for the economy due to the reduction of transactions, and a slippage in tax revenues because of declines in the value and volume of land transfers. This paper estimates those declines to be between five and 15 per cent.”

If tax reform is needed to re-align the revenue/expenditure formula for Alberta, a sales tax is preferable to a land transfer tax.

The paper can be downloaded on from The School of Public Policy’s website.

Media contact:
Morten Paulsen
morten.paulsen2@ucalgary.ca
403.220.2540

Understanding Behavioural Environmental Design Contributors of High Radon Exposure to Protect Canadian Health

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2017-2018 Annual Report Highlight

Radon is the second leading cause of lung cancer— after smoking— and the invisible, odorless, radioactive gas may be lurking in your home. AREF is supporting Evict Radon, an awareness campaign that encourages homeowners across the province to test their houses for radon gas while also providing data for researchers who are looking for a solution.

“We want to educate people about the effects of radon gas and encourage as many Albertans as possible to test their homes while also gathering data for medical research,” says Dr. Aaron Goodarzi, an assistant professor at the Cumming School of Medicine at the University of Calgary and lead of the Western Canadian Prairie Radon Study.

Radon occurs naturally when radium in the soil and rock breaks down. Goodarzi and his team have detailed radon gas analysis from more than 11,000 homes across Alberta and Saskatchewan. They found a staggering one in six houses contain hazardous levels of radon.

“We now have radon readings from all across Alberta and other parts of the prairies,” says Goodarzi. “We know that homes with higher square footage have higher radon. However, there are still several unknown home metrics that are contributing to high radon.” They’re trying to determine the “X factor” about why newer houses have higher radon than older houses.

The researchers are aiming to test more homes in Edmonton, Lethbridge, Red Deer and Medicine Hat and rural parts of Alberta. The best time to test for radon is during the winter. “That’s when we spend more time inside, and due to the cold, our homes are sealed up tight — the perfect conditions for radon exposure,” says Goodarzi.

People order a $60 Evict Radon test kit at evictradon.ca. They put the device in the lowest level of their home where they spend more than four hours a day and leave it there for at least 90 days. They register their device online, enter the start and end dates and fill out a short home metric survey. After the 90 days are up, the homeowner sends their device to the lab for analysis. They’ll get their radon level within a few weeks.

Radon occurs in areas all across the country. It’s the primary cause of lung cancer diagnosis in 10,000 to 40,000 Canadians every decade. And every day, an Albertan is diagnosed with radon-induced lung cancer despite never having used tobacco.

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Read the Alberta Real Estate Foundation’s full 2017-2018 Annual Report.