Calgary is Considering Taxing Home Owners to Help its Suffering Businesses

The city of Calgary is considering shifting business tax burden to homeowners. Councillor JyotiGondekwho represents Ward 3 on Calgary City Council, was the one who proposed this motion, and she says although it is not a popular idea, this is a decision that should have been made years ago.

There is a gap in Calgary’s tax income, left there by the rising number of vacancies in the city’s downtown core, now the city is reviewing possible ways to lessen the tax burden on businesses by increasing taxes on homeowners.

"What we've learned is that the program that we've used over the last couple of years was not as effective as it should have been," said Calgary Mayor, NaheedNenshi.

"We have gotten into a situation where some businesses in the city are seeing a lot of potential damage and that's not right and it's not fair."

The city has always relied heavily on its downtown income tax, only to witness a sharp decline from the increased vacancies in the same area in recent years. Worse still, the supply for office spaces in the downtown core keeps going up and is expected to blow up to around 45 million square feet in 2019 as Telus Sky is completed, meanwhile, demand is still as low as 33 million square feet.

A report of CBC.ca, says that according to city documents, about $14 billion has been lost in property value since 2015, with an annual $258 million tax impact shared by nearly 14,000 properties, this money would have to be made from elsewhere.

In the last two years, the city had had to raise additional money from its fiscal stability reserve fund, and this year, it was proposed that the city take $44 million from savings to help limit hikes on business property tax to no more than 10 percent, but MayorNenshi said this was not a permanent solution.

Instead of once again spending savings to soften business tax hikes this year, the city council started to consider the option of raising residential property taxes to rebalance the ratio between home and business property owners. This would mean an extra $65 in 2020, 2021 and 2022, on a $475,000 residential property value. Council is also trying to find savings and could implement a separate small business tax bracket.

Coun. JyotiGondekhad suggested that the $44 million could instead be spent on rebates for residential property owners.

"If you think about it in quite simplistic terms, if you give a business $100 to apply against a million dollar tax bill, it's not a lot. If you give a homeowner $100 to apply against a $2,000 tax bill, that's a much different situation," Gondek said, quoted on CBC.ca.

"It is not popular. I understand that. I'm already getting the onslaught of messages about 'Gondek loves taxes.' This is a decision that should have been made years ago."

The councillor insists that not only was this action absolutely necessary, it was also urgent.

"We have seen record numbers of businesses closing. We have seen record unemployment," she said. "This is a serious situation we have to help our business community."


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