TAMRMS#: B06
10.4
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Establish Derelict Residential and Non-Residential Tax Subclass
Notice given by: Councillor Korotash
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PROPOSED MOTION(S):
recommendation
That administration bring forward a report to Council outlining:
The implications, and required bylaw amendments to establish a Derelict Residential Tax Subclass for St. Albert; and
A framework or plan to position St. Albert as a pilot or early-adopting municipality for a Derelict Non-Residential Tax Subclass;
And that a derelict non-residential tax subclass be added to St. Albert’s advocacy priorities.
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ADMINISTRATION’S UNDERSTANDING OF THE INTENT OF THE MOTION
The motion directs Administration to assess the feasibility of establishing a Derelict Residential Property Tax Subclass for the City of St. Albert. This assessment would include reviewing the authority available under the Municipal Government Act (MGA), identifying the implications and potential benefits of implementing such a subclass, and outlining any required amendments to municipal bylaws. The review would also consider the eligibility criteria, administrative processes, and enforcement mechanisms necessary to support implementation.
The motion further seeks the development of a framework or implementation plan to position St. Albert as a pilot or early adopting municipality should the province enable municipalities to establish a Derelict Non-Residential Property Tax Subclass in the future. As municipalities outside Edmonton and Calgary do not currently have legislative authority to create such a subclass, this work would focus on preparing the City to take advantage of any future amendments to the MGA that would provide this authority.
The motion also proposes adding advocacy for a derelict non-residential property tax subclass to the City's advocacy priorities; the desired outcome of this advocacy priority would be implementation in support of legislative changes that would expand the taxation tools available to municipalities to address long-term derelict properties. If approved by Council, this item would be added to Council’s Advocacy Priorities and Administration would develop and implement appropriate tactics seeking to achieve the stated outcome.
PURPOSE OF REPORT
The purpose of this report is to present a motion for which Councillor Korotash gave notice on September 30, 2026.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
Bylaw 32/2015 - Vacant Residential Property Tax Subclass Bylaw
The City currently utilizes its authority under the MGA to establish a Vacant Residential Property Tax Subclass through Bylaw 32/2015. The proposed motion contemplates consideration of an additional residential property tax subclass and would require review of existing taxation bylaws should Council choose to proceed.
Municipal Government Act
Sections 297 and 354 of the MGA authorize municipalities to establish residential assessment subclasses and to set different tax rates for those subclasses through an annual property tax bylaw.
The MGA does not currently authorize municipalities outside of Edmonton and Calgary such as St. Albert to establish a “derelict” non-residential property subclass (it is limited to strictly “vacant” non-residential sub-class). Non-residential subclasses are limited to those prescribed in legislation and regulation. In undertaking this work, further conversations would need to occur, to understand Council’s definition and intention of “derelict” to ensure appropriate properties are captured within the sub-class. At this time, provincial legislative amendments would be required before St. Albert could establish a derelict non-residential property tax subclass.
BACKGROUND AND DISCUSSION
Derelict Residential Property Subclass
The MGA permits municipalities to establish residential assessment subclasses and apply different tax rates to those subclasses through a tax bylaw. St. Albert currently uses this authority through its Vacant Residential Subclass Bylaw 32/2015, which was established to encourage development of serviced lots and support efficient use of municipal infrastructure.
In 2023, the City of Edmonton established a Derelict Residential Property Subclass, using objective criteria focused on significant deterioration, abandonment, or uninhabitable conditions. Edmonton’s framework is intended to encourage redevelopment and reduce the impacts of long-term property neglect.
The MGA provides municipalities broad discretion to create residential subclasses; therefore, Council has the authority to consider a derelict residential property subclass in St. Albert. Should Council choose to pursue this option, Administration would need to develop clear eligibility criteria, inspection and designation processes, and property owner notification procedures to ensure the subclass can be administered fairly, consistently, and defensibly. The primary purpose of a derelict residential subclass would not be to generate additional tax revenue, but rather to encourage remediation, redevelopment, sale, or reinvestment in significantly deteriorated and abandoned residential properties.
Derelict Non-Residential Property Subclass and Intergovernmental Engagement
Unlike residential property, the MGA does not currently authorize municipalities such as St. Albert to create a derelict non-residential property subclass. The Act only permits prescribed non-residential subclasses of vacant non-residential, small business, and other non-residential property.
Consequently, provincial legislative amendments are required to implement this tool. At the recent 2026 Alberta Municipalities Convention and Trade Show, members approved a resolution requesting provincial amendments to extend this legislative tool to all municipalities, and to exempt that subclass from the current 5:1 tax rate (ratio) limitation. The resolution received strong support from Alberta municipalities and reflects growing interest in providing local governments with additional tools to address long-term property neglect. Specifically, the resolution requests:
• Amend sections 297 and 358.1 of the Municipal Government Act to allow all municipalities the option to create a derelict subclass under Class 2 Non-Residential property;
• That such an amendment include an exemption from the 5:1 tax rate ratio limit, for a derelict non-residential tax subclass, to ensure municipal councils have the necessary flexibility to set a deterrent tax rate;
• That Alberta Municipalities advocate to the Government of Alberta to remove the requirement that a property be unoccupied for a year before it can be assessed into a derelict non-residential tax subclass.
Approval of this Council Motion would add this item to Council’s Advocacy Priorities and Administration would develop and implement appropriate tactics seeking to achieve the stated outcome. Administration would seek to leverage tactics through advocacy partners such as Alberta Municipalities, to the extent possible.
IMPACTS OF RECOMMENDATION(S)
Approval of the recommendations would provide Council with information on the extent of derelict residential properties in St. Albert and the feasibility of a derelict residential property subclass as a policy tool to encourage property maintenance, reinvestment, and redevelopment.
It would also support ongoing advocacy efforts aimed at expanding municipal authority to address derelict non-residential properties. Implementing the recommendations would require staff resources to develop evaluation criteria, reporting processes, and assess any required assessment, taxation, and system modifications. As a result, some existing departmental priorities and projects may need to be reprioritized to accommodate this work.
Financial:
Given the current limitations of the MGA regarding the creation of a non-residential derelict property subclass, this option would does not have a current financial impact, as the City cannot implement such a subclass under the current legislative framework.
If Council pursues and establishes a residential derelict property subclass, the financial impact is expected to be minimal, as relatively few properties within St. Albert are anticipated to meet the criteria for classification as derelict. Any additional property tax revenue would therefore likely be limited.
Administrative costs would be associated with developing and implementing the new bylaw, establishing eligibility criteria, identifying and reviewing qualifying properties, and administering the subclass on an ongoing basis.
Compliance & Legal:
Any future derelict residential property subclass would require clear, objective, and consistently applied criteria to ensure compliance with the MGA and reduce the risk of assessment appeals or legal challenges. A subclass that is overly narrow to target specific properties could be subject to increased legal risk. The City does not currently have legislative authority to establish a derelict non-residential property subclass, and provincial legislative amendments would be required before such a subclass could be considered.
Program or Service:
None at this time.
Organizational:
If Council directs Administration to explore and implement a derelict residential property subclass, additional staff resources would be needed to develop the required policy framework, eligibility criteria, bylaw amendments, assessment processes, inspection protocols, and appeal procedures. This work would require collaboration across several business areas, including Assessment & Taxation, Legal, Planning and Development, Finance, and Municipal Enforcement, and Government/Indigenous Relations and Environment, and would need to be balanced against existing departmental priorities and available resources.
Given current workload and resource capacity, advancing this initiative may require reprioritization of other projects and work plan commitments. Once implemented, ongoing administrative impacts are expected to be manageable given the relatively small number of properties anticipated to qualify for the subclass.
Risks
Similar to Bylaw 32/2015 any future potential residential classifications would need to be based on physical characteristics that relate to the property type rather than be created in such a way that may be viewed as discriminatory. Caselaw suggests a subclass may be invalidated if it is focused on a single property. Tax classifications are appealed to the Assessment Review Board, and those decisions may further be subject to judicial review by the Court of King’s Bench.
Property taxes are a consideration of any re-development; however, they may be considered negligible to a developer in comparison to demolition costs, developing, constructing, and maintaining a property.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
N/A
Initiative aligned with Strategic Plan:
Not Applicable
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
N/A
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Report Date: November 3rd, 2026
Author(s): Shane Crooks/Stephen Bannerman
Department: Financial and Strategic Services
Department Director: Anne Victoor
Managing Director: Diane McMordie
Chief Administrative Officer: William Fletcher