Alberta is changing the system for how publicly funded agencies — including school districts, universities and health-care providers — can own and sell property.
If passed, Bill 13, the Real Property Governance Act, would require provincial agencies, boards and commissions to give the province first right of refusal when they’re selling surplus land and buildings.
The proposed change affects Alberta’s post-secondary institutions, school jurisdictions and charter schools, Alberta Health Services and numerous government organizations including the Alberta Social Housing Corporation, among others.
Infrastructure Minister Pete Guthrie said Thursday the province will also no longer transfer ownership of new buildings, like schools and hospitals, to the organization running them. Instead, the plan is for the government to retain ownership and make long-term lease arrangements with operators.
However, institutions like school boards would continue to be responsible for maintenance.
After the bill was tabled Thursday, Public School Boards’ Association of Alberta president Dennis MacNeil said school boards have many questions about what it means for them.
Public agencies still get to make decisions about when land or buildings are no longer needed, although that process requires additional government approval when it comes to schools.
MacNeil said he has concerns about school boards’ autonomy to decide what happens to a school after it closes.
“If it’s in the hands of the government as opposed to the hands of the board, then it would be easier to turn it over to another entity that may be in competition with the public school board,” he said.
Legislation stems from MacKinnon panel recommendation
The government estimates that public agencies, boards and commissions hold $83 billion in assets, while the infrastructure ministry owns just $12 billion.
“That kind of gives you an idea of … the transferring away of assets that we do not hold as having availability to and access to as the government of Alberta,” Guthrie said.
The policy is a call back to the 2019 blue ribbon panel led by former Saskatchewan finance minister Janice MacKinnon that made recommendations for sweeping changes to Alberta government finances.
One of the MacKinnon panel recommendations was to “redefine” government land assets to include the broader public sector. The panel suggested that setting policy to deal with surplus land and buildings could offset other capital costs or provide more revenue for the province.
Guthrie said the province’s goal is to make it easier to understand the full inventory of government-owned property and more readily convert available real estate to “priority” uses — for example, affordable housing or addictions recovery centres.
Bill Werry is executive director of the Alberta Post-Secondary Network, a collective of 26 presidents of the province’s colleges and universities.
He said post-secondary institutions will be looking to work with the government on the regulations around provincial ownership and lease arrangements for public assets.
“Not all of our institutions are the same size and scope, nor do they all have the same history or land and assets,” he said.
“The majority of our members are part of the government’s consolidated financial reporting so they’ve already got obligations to the province relative to land and buildings as it stands.”
According to Guthrie, when it comes to post-secondary institutions, anything held within their land trusts would not be included in the new system.
The B.C. government has announced plans to introduce a tax of up to 20 per cent on profits made when properties are sold within two years of their purchase.
The 20 per cent rate will be in place for a year after purchase and will slide to zero between 366 and 730 days after the acquisition.
B.C. Finance Minister Katrine Conroy announced the tax as one of the province’s latest tools to try to curb speculation over housing in a province where many struggle to afford appropriate shelter.
“Prices went up as governments stepped back and speculators moved in,” said Conroy during her speech presenting her latest budget in the legislature.
“That’s why we’re bringing in a home-flipping tax as our latest measure to crack down on bad actors.”
The tax is one of 20 pieces of legislation the government plans to introduce this session, meaning it will need to be passed at some point over the next three months before becoming law.
The plan is to implement it for properties sold on or after Jan. 1, 2025. It will also apply to properties purchased before then.
Conroy’s 2024-25 budget forecasts that the tax, once in place, would result in an additional $44 million in revenue in the 2025-26 fiscal year.
That revenue will go directly to building affordable housing throughout the province, she said.
Sellers would be taxed around 10 per cent after owning a home for a year and a half, with the tax lifted after ownership for two years.
The tax will apply to income from the sale of properties with a housing unit and properties zoned for residential use. It also applies to income made from condo assignments.
It does not apply to land or portions of land used for non-residential purposes, according to the government’s budget documents.
Other exemptions under the tax include life circumstances such as separation, divorce, death, disability or illness, relocation for work, involuntary job loss, change in household membership, personal safety or insolvency.
“The purpose of this tax is to support housing supply, not impede it,” reads the government’s budget documents.
“Exemptions will be provided for those who add to the housing supply or engage in construction and real estate development.”
The tax is to be paid in addition to any federal or other provincial income taxes incurred from the sale of property.
Alex Hemingway, a senior economist with the Canadian Centre for Policy Alternatives, said although the tax is another tool to try and address speculation, he’s not sure how successful it will be.
“I think a flipping tax can take a little bit of air out of the tires in terms of speculation, but it’s not really getting at the root of the housing crisis, which is a shortage of housing overall and a shortage of non-market housing in particular.”
He also said the tax could inadvertently drive down home sales and transactions, siphoning tax revenue away from property transfers.
First-time homebuyer credit
The budget also introduced expanded property transfer tax exemptions, increasing the First Time Homebuyers Program threshold up to $500,000 on the purchase of a home worth up to $835,000.
The province said the move would result in savings of up to $8,000 per purchase and would double the number of buyers that will benefit to approximately 14,500.
The province will also waive the property transfer tax for eligible purpose-built rental buildings that have four or more units until 2030.