Following large increases to non-residential property taxes, Calgary’s mayor and 13 city councillors have come up with a plan to cut those taxes for local businesses.
But support from the province isn’t a sure thing.
In a joint media release on Thursday, the mayor and councillors announced an urgent notice of motion would be brought forward at the June 17 council meeting.
“Property values of businesses have dropped, and then, on top of that, you have huge amounts of vacancies in the core. So then, how are you going to reconcile this $300 million problem?” Ward 13 city councillor, Diane Colley-Urquhart, said. “I think where the divide started was, some at council wanted to transfer this whole burden onto homeowners.
“This is the yin yang that we’ve been struggling with back and forth.”
The plan would give $71 million to non-residential property taxpayers, cut $60 million from the budget, and request the province reduce what it takes from property taxes by $60 million.
The plan comes after a decision to kill a small business grant program that was seen as a potentially viable solution to the tax burden on businesses.
“They’ve just been pleading with us to do something, but that answer is not taking that $300 million problem and putting it on the backs of homeowners as well,” Colley-Urquhart, said. “We certainly could have done better, and we could have done this faster.”
But the province isn’t keen on the city’s idea.
Following the announcement on Thursday, Minister of Municipal Affairs Kaycee Madu rejected the idea of the government stepping in to ease the tax burden.
“The City of Calgary needs to look after its own house,” Madu said in a statement. “They have hiked operational spending far beyond inflation and population over the last decade. Council needs to think about where this money has gone and why it has become so reliant on passing its spending hikes onto businesses.
“It is hard work, but we are doing our part at the Legislature.”
Premier Jason Kenney was in Calgary on Friday speaking at an Economic Club of Canada luncheon in the city’s struggling downtown core.
When asked about the city’s plan, Kenney said the province is doing way more than its part to help businesses in Calgary and across the province.
The premier pointed to the recent tabling of Bill 3, legislation that would cut the corporate tax rate from 12 to 11 per cent on July 1, and to 10 per cent on July 1, 2020.
“It’s not the provincial government’s responsibility to subsidize municipal property taxes, and I wish them well in trying to come up with a solution here,” Kenney said. “It seems to be they’re going to have to go through a period of fiscal responsibility.”
Sixty-four per cent of Calgary businesses are facing a tax hike of over 10 per cent due to the downtown vacancy rate.
Canadian Global, a company in southeast Calgary that specializes in re-certifying and re-selling parts for oil and gas drilling, was expecting a tax increase, but not the amount that was on the notice mailed out to businesses this week.
According to the company, property taxes jumped from $6,100 to $8,500, a big hit to the business’ bottom line.
“We can try to hire people but instead we have to lay people off because that increase alone from last month to this month is an employee,” Canadian Global president and owner, Cory Connelly, said.
Four years ago, the company was annexed from Rockyview County, where it paid $2,200 in property taxes.
According to Connelly, the southeast industrial park doesn’t have any city services like transit, water or sewage, and he feels the large hike is unfair.
“We’re in an industry right now that we can barely make ends meet as it is,” Connelly said. “It’s impacting us.”
Connelly’s company has operations in Oklahoma, and he said he is seriously considering moving his operation stateside.
With a tough decision on his mind, he isn’t optimistic council can fix the problem.
“I don’t think there is a solution, not in the next two years,” Connelly said.
Council will discuss the notice of motion on June 17.
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