Calgary Mayor Naheed Nenshi was one of only three on council who voted for a tax relief plan that would’ve handed out grants to small businesses to alleviate rising property taxes.
Gavin Young / Postmedia
Small businesses hit hard by Calgary’s downtown tax shift problem likely won’t receive any financial assistance from the city in 2019 after council failed to reach consensus on a solution to tackle the problem.At Monday’s meeting, council voted 12-3 to kill the only remaining proposal on the table to provide assistance this year to small businesses suffering through the economic downturn. The small business grant program would have seen $35.9 million distributed in grants to eligible businesses with fewer than 20 employees.Council has also run out of time to conduct a third round of the phased tax relief program that was used in 2017 and 2018 to keep a cap on tax increases to commercial property owners at five per cent.Tax bills for 2019 were mailed out on May 24 and this year it’s expected that non-residential property owners will face the full weight of the tax shift without any buffer or assistance from the city. Preliminary estimates from the city suggest that more than 64 per cent of commercial properties could be facing tax hikes of 10 per cent or more in 2019.“It’s frustrating and I can see how folks in the business community would be frustrated because council keeps saying, ‘we’ve got your back’ — and yet seems unable to do things that actually have their back,” Mayor Naheed Nenshi said Monday evening.“Council made a decision to go ahead with this grant program knowing full well there was timeline and then pulled back on that decision today without any alternative.”Monday’s meeting saw council vote to establish a working group that will work alongside an existing financial task force to come up with recommendations and potential solutions to the tax shift problem for debate in November.
Empty office buildings in the downtown have caused the tax burden to be shifted to homeowners and businesses outside the core.
Holly Mandarich /
Holly Mandarich/Special to The Sun
This is the fourth year the city has grappled with the painful fallout of Calgary’s empty downtown office towers.Shrinking property values in the downtown have triggered a redistribution of the tax burden through the city’s revenue-neutral annual assessment process to commercial properties outside the core, including inner-city and suburban retailers and industrial firms.For months, city council has debated and then voted down various solutions to the tax problem including one that would have seen a radical rebalancing of the tax burden between residential and non-residential accounts. Currently, businesses pay 53 per cent of municipal taxes, while residences pay 47 per cent.“A disappointing result in (council chambers) today with councillors voting to delay 2019 non-residential tax relief,” the Calgary Chamber of Commerce tweeted Monday evening. “Long-term, bold, and strategic decision making is essential for Calgary to move forwards. We continue to implore the City to focus on growing the economy.”The small business grant program that was defeated at Monday’s meeting would have provided qualifying businesses with grants ranging from $750 to $4,000. Preliminary estimates suggest between 20,000 and 50,000 Calgary businesses could have been eligible.A majority of council members said they were opposed to distributing grants to businesses either because they felt it wasn’t the right approach or they were skeptical of the city’s ability to fairly administer the program.Councillors Diane-Colley Urquhart, Jeff Davison, Peter Demong, Jeromy Farkas, Jyoti Gondek, Ray Jones, Shane Keating, Joe Magliocca, Ward Sutherland, Evan Woolley, George Chahal and Sean Chu voted against the grant program. Only Nenshi and councillors Gian-Carlo Carra and Druh Farrell voted in favour.Council also elected to maintain a previously approved fund of $70.9 million to pay for potential solutions to the tax shift problem when the work of the task force and working group concludes in six months’ time.“I would actually like to apologize to the business community,” Sutherland said in chambers Monday. “As a council, we failed to address the issue. It’s too late now. We don’t have the options and at some point we’ve got to take responsibility.”firstname.lastname@example.orgOn Twitter: @mpotkins