Cold Lake city council has voted against granting municipal property tax exemptions for two medical clinic spaces operating inside the Cold Lake Hospital.

Both applications were brought forward under the Municipal Government Act and the Copter regulation, which outline when property can qualify for tax exemption as a non-profit use. In both cases, administration recommended that the exemptions not be granted.

Council ultimately agreed.

How Hospital Space Is Assessed

Chief Administrative Officer Kevin Nagoya and the administration explained that the hospital building is assessed as a single property, not as separate units for each tenant.

“The assessment of the hospital is $56 million,” administration told council.

Because the medical clinics occupy only portions of the building, they do not have their own individual assessments.

“We don’t have a separate assessment for the medical clinic space because it’s just a portion of that larger parcel,” administration explained. “So what we do instead is we calculate the full space of the whole hospital and then they break it down… and derive that estimate from there in order to calculate what that property tax amount would be.”

They acknowledged the approach is imperfect but necessary.

“It’s not a great… It’s the best way we have to calculate the portion of the space they use.”

Merit Medical Clinic Application

The first request involved space operating as Merit Medical Clinic within the hospital.

Administration noted that the context behind the application was included directly in the clinic’s submission.

“The only reason… that we have sort of the background information… is because that was included within the applications made by the medical clinics themselves.”

Council was reminded that other for-profit entities operating within hospital or municipal facilities continue to pay property taxes on the portions they occupy.

“There is another for-profit entity that operates out of the hospital. That’s the associated ambulance. Taxes are levied for that portion of the hospital as well… and they have been paid annually.”

Administration also pointed to similar examples within the community.

“For example… Booster Juice… Johnny Waffles in the municipal facility. So they’re all one tax roll and you’re taking components of the overall assessment and taxing them… according to the municipal government act.”

The same principle applies to other shared-use facilities.

“The Harborview community centre… the portion of that building that they rent out to for-profit entities is taxed.”

Administration also referenced a broader provincial clarification around non-profit ownership and for-profit tenants.

“Not for profits… have been purchasing… assets and then housing kind of for-profit companies within them to try to shield from municipal property taxes…”

Concern About Setting a Precedent

During the discussion, councillors raised the issue of consistency and precedent.

“If we were to allow this application… then we may see an application coming from another medical clinic… and the beat goes on, right?” one councillor said.

Administration responded that each application would still be reviewed individually.

“Each one would have to be based on its own merit.”

Council also heard that the legislation itself is restrictive.

“The legislation is pretty restrictive… in what would qualify as sort of a nonprofit use and what wouldn’t under the purposes of the legislation and its regulation.”

A motion was made to grant the exemption for Merit Medical Clinic. Council voted against the motion.

Lakeland Medical Clinic Application

Council then considered a second, similar request for space to operate as the Lakeland Medical Clinic within the hospital.

In this case, the leaseholder is Dr. Joseph M. Standard in his individual capacity, not a non-profit entity.

“It’s 4,676 square ft of the Cold Lake Hospital that we’re speaking of,” administration said. “The municipal portion of the property tax is estimated approximately $25,000.”

Administration reiterated its position.

“The lease holder does not meet the definition of a nonprofit… and because of that, our recommendation is that the tax exemption not be granted.”

A motion was again made to grant the exemption. Council voted against it.

What This Means

In both cases, the motions to grant municipal tax exemptions did not pass.

That means property taxes will continue to be levied on the portions of hospital space occupied by both clinics, calculated using the proportional method applied to the overall hospital assessment.

Had the motions carried, council would have authorized municipal tax exemptions for those spaces. Instead, the current tax structure remains in place.

The decisions were based on how the Municipal Government Act and the Copter regulation define non-profit eligibility — not on the services provided by the clinics themselves.