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Future still uncertain for small businesses in Calgary as city hikes tax rates

WATCH: The City of Calgary’s shift in tax rates is worrying some local businesses already dealing with a struggling economy. Global’s Tomasia DaSilva reports.

Struggling Calgary businesses will have to wait until the new year to find out if they will be getting a reprieve from higher tax rates.

Calgary city council approved the 2020 city budget late last week. It contained a 7.51 per cent hike in taxes for the typical family home — an amount that equates to $12.50 per month.

The bulk of the increase came from council’s decision to shift more of the property tax burden onto homeowners from businesses. But when city administration was asked what the property tax rate hike would be for businesses, officials couldn’t say.

“It varies on the kind of business you have,” the city’s chief financial officer Carla Male said.

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“What I can tell you is the amount shifted from non-residential to residential is about $60 million in total.”

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The NW Calgary community of Kensington is one of many struggling with commercial vacancies
The NW Calgary community of Kensington is one of many struggling with commercial vacancies Global News/Loren Andreae

Calgary Mayor Naheed Nenshi said some business will actually see cuts in taxes — while others, increases.

“Your average office building, your distribution centre, your warehouse, your downtown will still see a significant cut,” Nenshi said. “Your 17 Avenue retail and your neighbourhood strip mall are basically the ones where I’m still a bit concerned because I think those increases are a bit high.”

READ MORE: Calgary city council votes to shift some tax burden from businesses to homeowners

The executive director of the Kensington Business Improvement Area, Annie MacInnis told Global News she believes the city is doing what it can to help small businesses.

But she didn’t dispute times are tough.

“People are pretty close to the bone I think,” MacInnis said. “We’re trying to survive.”

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A restaurant that has closed in Kensington puts up a sign thanking customers
A restaurant that has closed in Kensington puts up a sign thanking customers Global News/Loren Andreae
A popular restaurant in Kensington closes its doors
A popular restaurant in Kensington closes its doors Global News/Loren Andreae

The Kensingston neighbourhood has a number of empty storefronts waiting to be leased. But MacInnis said that is also not out of the ordinary.

“I’ve been the executive director in Kensington for 16 years,” she added. “So businesses have come and gone in the past 16 years. We’re seeing a few more at the moment but some of that is a natural occurrence.”

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MacInnis added seven of those empty shops are set to be leased in the next few months.

Nenshi said he’s hopeful a solution will also be reached by then.

“Nobody wants to see a 15 per cent increase,” he said.

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“So we’re hopeful we’ll still be able to cap, at some level, the ones that are going up this year and then the shift will ultimately address part of the structural issue.”

The city expects to have answers about how to help small businesses with their tax increases in January.

WATCH: ‘I’m going to be pretty livid’: Calgary councillor urges city council to quit avoiding the tax shift problem

Nenshi said another part of the solution to help local businesses lies with Calgarians, and he’s pushing a buy local approach.

That’s something MacInnis couldn’t agree more with.

“For every one dollar you spend in a local business, you’re helping the Calgary economy recover,” she said. “Buy local, shop local — that’s the best way Calgarians can help in the short term.”

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