Many small business owners in Calgary are awaiting and dreading the arrival of next year’s property tax bills. They say they expect huge hikes.
Bernard Drouin owns 17th Avenue Framing in Calgary. He said his property taxes have skyrocketed since he bought the business back in 2012.
“The taxes went from $17,000 to $45,000 last year. So I don’t know, what am I to expect in 2019?” Drouin asked.
Calgary City Hall is grappling with that question right now as it faces a huge tax revenue shortfall as a result of burgeoning downtown office vacancies.
One-hundred-forty-two downtown office properties have lost $12.5 billion in value, which means a drop in tax revenue of $192 million for the city.
A city finance committee heard Tuesday that to make up for that shortfall, businesses could possibly see a tax hike of up to 28 per cent if there is no intervention from the city.
“Those are scary numbers,” Mayor Naheed Nenshi said.
City council did cap non-residential property tax rates at five per cent the last couple of years, but the mayor said he doesn’t know if that would be sustainable again.
“For the last two years, we’ve had your back and we’ve managed to cap these increases at five per cent,” Nenshi said. “I don’t think we’ll be able to get it quite to five per cent again, but we will continue to have your back.”
There is also talk by some to shift the tax burden from business owners to homeowners, but some city officials say that won’t fix the problem.
Calgary’s mayor said it’s important not to overburden homeowners or business owners.
“I think it would be a mistake to try and overreact.”
Some of the options the city is considering include continuing a non-residential tax relief program, allowing for vacant office spaces to be converted into residential buildings or just allowing the market to settle into its new reality.
City council will start tackling the budget later this month with property tax bills expected to be in the mail by spring.