Calgary business groups are asking the city for some relief in light of a big property tax increase this year that some owners say is threatening to close their doors.
But at least one Calgary couple has found a way to expand their downtown business by adjusting to the economic situation.
Baking has always been a passion for Deidre Lotecki, so even with all the doom and gloom in Calgary, she and her husband are opening the doors of their new bakery, Sweet Relief Pastries.
“The goal in my life is to pay myself and to pay for everything. Making a profit isn’t even an option at this point,” said Lotecki at the opening of Sweet Relief Pastries in Victoria Park this week.
READ MORE: Calgary small business sees 265% property tax increase
Like many business owners, Lotecki says skyrocketing property tax bills are a worry.
Business groups are calling on the city to offer a temporary tax deferment program.
“This is all about entrepreneurs and business owners wanting to know that the city is doing something; that they are going to try something to help the hardworking entrepreneurs in the city that are struggling through one of the worst economic climates that we’ve seen in a generation, and the city seems to be sitting on his hands,” said Richard Truscott, Alberta and British Columbia vice president at the Canadian Federation of Independent Business.
“At the end of the day, business owners are getting hit with huge tax hikes. In some cases it’s 50, 60 or even 80 per cent up–and that is really a hard pill to swallow in this economic environment. And it’s calling the underlying survival and viability of many of these small businesses into question.”
READ MORE: 97% property tax increase spurs complaint from Calgary bistro owner
The city plans to eliminate the business tax by 2019 and it has decreased the tax this year, but big increases in property taxes are now hurting entrepreneurs. Calgary Mayor Naheed Nenshi suggests there needs to be a better way to tax businesses.
“The problem is the property tax is a lousy way to fund government from small business. Because it’s not sensitive to whether you’ve had a good year or not,” Nenshi said at city hall on Monday.
“We have a little bit we can do, but not very much on the tax side,” he continued.
“Where we have the ability to really make a difference is in helping make sure the small businesses have customers. If we slam on the brakes and start laying people off in the city and don’t build things, then we will increase unemployment.”
Lotecki and her husband are opening their own shop after outgrowing their old location at a local café.
“We’ve done pretty well. We’ve increased our sales significantly over the past year,” Lotecki said.
She says she found the sweet spot, even in a downturn, by catering to people with smaller budgets.
“We are trying to market to people who don’t have quite as much money to spend on their wedding cake or birthday cake. That way everyone can have something delicious,” she said. “And we understand their price point might not be as high as they had dreamed of, but hopefully we can give them something that they are looking for for their price point.”
“You have to realize what the situation is and hopefully you can just do your business appropriately to that.”
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