December 1, 2018 10:11 pm

Calgary businesses encouraged by new city budget

WATCH: The city of Calgary now has a new four-year budget and it contains some good news for businesses. As Carolyn Kury de Castillo reports, the city has come up with a plan to help keep a lid on tax increases.

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Vanna Nguyen and her business partner Doby Tcholakova got a letter in November from their landlord informing them their rent is going up. The owners of Nice Look Family Hair Care in Forest Lawn said they’re not sure how they’ll stay afloat with the latest increase.

“It’s increasing more and this time I don’t know how we can survive because the taxes, they are up and the common fee is up,” Tcholakova said. “Practically, we cannot make any money.”

But they are encouraged by the new budget. Calgary city council has managed to keep the non-residential tax hike to 1.42 per cent. Homeowners face a 3.45 per cent increase.

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“It starts on filling the hole,” said Mayor Naheed Nenshi on Friday. “With this shift and one-time money in the same amount in the last two years, we’ll be able to cap the property taxes for businesses outside the downtown core at 10 per cent.”

READ MORE: 4 things to know about Calgary’s proposed four-year budget

The one-time money comes from reserves. The city also managed to find additional savings in salaries and wages. The other part of the equation that will help entrepreneurs is a shift in the tax burden from businesses to homeowners. Businesses still pay the majority of the municipal taxes in Calgary, but their share is now shrinking.

“We found 1.25 per cent in savings and we are applying those savings entirely to the non-residential side of the ledger so homeowners will not see those savings but businesses will,” Nenshi said.

The city still faces the problem of plunging property values in the downtown core but with the latest budget, council has done the best it can, said the head of the International Avenue Business Revitalization Zone (BRZ).

“We were obviously very nervous about it and we are very pleased they were able to find efficiencies in order to decrease the tax burden on small businesses,” said Alison Karim-McSwiney, executive director of the International Avenue BRZ.

The city plans to go even further than capping property taxes for businesses outside the core at 10 per cent.

Nenshi said before the tax rates are finalized early next year, the city plans on looking at other options to bring that number down.

© 2018 Global News, a division of Corus Entertainment Inc.

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