May 28, 2019 12:27 pm

Calgary city council votes against small business grant program

Calgary city council engaged in a heated conversation as it debated a proposal to implement term limits and councillor recall.

John Himpe / Global News
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There will not be a safety net for any Calgary businesses facing property tax increases this year.

As tax bills arrived in the mail to property owners, city council voted 12-3 vote Monday to scrap the idea of a small business grant program.

The idea pushed by Mayor Naheed Nenshi would have provided grants of between $750 to $4,000 to businesses with fewer than 20 employees.

READ MORE: Calgary small business grant program defeated in committee


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Because of the significant drop in property values in the downtown core, businesses in other areas of the city have to pick up the tab.

In the past couple of years, council did provide a rebate program through the city’s fiscal sustainability reserve fund, which capped the increases. There had been criticism of that program because relief didn’t always flow down to operators of small businesses.

READ MORE: Calgary city council to look at streamlining process for pop-up, interim businesses

The mayor admits the small business grant program wasn’t perfect but it attempted to provide some relief.

“What’s been difficult for me is that every program that comes up is roundly criticized and the next program that comes up is like, ‘Why don’t we go back to the previous program?,'” the mayor said Monday.

READ MORE: City of Calgary assessing public golf courses for possible tax dollar savings

In Nov. 2018, council did provide some relief to non-residential rate payers by taking a 1% tax break and shifting it away from homeowners to businesses. However, in the past few months politicians have not come up with any other solutions.

“I’d like to apologize to the business community,” Ward 1 Councillor Ward Sutherland said Monday. “As a council we failed to address the issue.”

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“It’s too late now. We don’t have the options and at some point we have to take responsibility.”

Sutherland didn’t agree with implementing the grant program, saying it was the last resort for council this year.

“We could waste money, it might not be fair,” Sutherland said. “We’re better off doing it right and getting this problem fixed.”

READ MORE: Calgary’s downtown vacancy rate predicted to stay in 20% range into next decade

The small business grant program would have been funded through the city’s fiscal sustainability reserve fund and the city’s budget savings account.

Ward 3 Councillor Jyoti Gondek proposed to increase residential property tax rates to match the rate paid by businesses leaving the $70.9-million to be used as a rebate to buffer the increases.

READ MORE: Calgary councillors give Kensington legion one-time tax break

Gondek said the small business grant program was panned by businesses.

“Their primary concern is that this program won’t be equitable, it won’t be enough and is not providing certainty or any kind of predictability for the future,” the Ward 3 councillor said.

Council did approve the establishment of a financial task force which will make recommendations that will come back later this year. Unfortunately, those recommendations will not in time for this year’s business tax increase.

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