ST. PAUL – Town of St. Paul council raised concerns during the Aug. 25 council meeting about banks potentially viewing the region as a low-value market, which they say makes it harder for people and businesses to get loans.
The discussion came during St. Paul Elk Point Economic Development Alliance's (STEP) presentation of its 2025-2027 priorities. STEP is a regional partnership between the County of St. Paul, Town of St. Paul, Town of Elk Point, and the Summer Village of Horseshoe Bay.
STEP Economic Development Officer Linda Sallstrom said investment attraction is a key focus for the organization. When people consider moving into a region, like businesses, they look at several basic factors: land and buildings, labour, land use, taxation, utilities, transportation, and quality of life.
Sallstrom said STEP started looking into “rural valuation” as part of its work in promoting land and properties in the region, because commercial and residential properties in rural areas like St. Paul are often assessed at lower values compared to urban areas.
Federal policies give banks and lenders the ability to apply stricter risk assessments in regions they consider weaker markets, according to Sallstrom. And if banks or lenders determine the St. Paul region as a “low market,” they can use this discretion to deny mortgages or business loans.
“Well, it's been huge to get over that hurdle because that's been a holdback for so long for multiple investment,” said Mayor Maureen Miller.
County of St. Paul Coun. Darrell Younghans, who is also a member of STEP’s board, expressed concern that the issue is getting worse.
“How are we going to grow rural Alberta when you can't borrow [money]?” he asked.
Miller replied, stating, “Somebody has to recognize the discrimination, actually.”
"It becomes a self-fulfilling prophecy," said Coun. Nathan Taylor, who is the town's representative to STEP's board of directors.
Taylor explained the problem is how banks perceive property values in rural areas. If someone seeks a $200,000 loan from a bank to buy a house, for example, they might get denied because the banks “haven't heard of St. Paul,” said Taylor.
And if banks perceive St. Paul as a low market, this makes it harder for people to buy homes or start businesses, leading to decreased demand.
As demand drops, sellers may lower their prices, which leads to actual decreased market value - all because of the bank's initial perception of the area, suggested Taylor. “They are causing the depreciation.”
Another concern for Taylor is the disconnect between rural areas and larger, urban-based financial institutions. Many mortgage brokers are located far away in cities like Red Deer or even Toronto, which means they don’t understand the local market, he said.
Brokers are more likely to see rural areas as risky investments, according to Taylor, which makes it even harder for people to secure loans for homes or businesses.
Thus, advocacy is important, he said. “The value of having that local person - even if they're individually not giving the loan - they can help advocate.”
Younghans agreed, adding, “And as we see the closure [of] more and more rural branches . . . That disconnect is much, much more [apparent] because you don't have that [local] relationship.”
Sallstrom confirmed STEP has already flagged both rural lending and branch closures with Alberta HUB, a regional economic development group, as matters of concern, and is gathering feedback from local realtors.
