John Milino says when he opened his new tax assessment from the City of Calgary Tuesday night he first felt sick and then he got angry. It’s hard to blame him.His monthly tax payments have gone up by a whopping $2,000 over the already exorbitant taxes he was paying for the first six months of the year when he paid $8,408 per month. Now he’s saddled with a $10,440 monthly tax bill.“My city taxes have gone up 100 per cent in five years — or 99.203 per cent to be precise,” says the owner and operator of Alberta Storage Place — what he says is the largest privately held self-storage business in Calgary.Back in 2015, Milino paid $46,983 in business taxes to City Hall. In 2019 he must pay $93,592.It’s devastating blow to his bottom line and Milino says the incompetence of City Hall politicians and its bureaucrats to trim some fat and find some efficiencies from its $4.5 billion budget, like every other business in Calgary has had to do during the recent recession, shows they are completely out of touch.
Milino says he can’t sell his business and retire because property taxes have devalued it so much.
Darren Makowichuk /
Just perusing the career opportunities available at City Hall proves that point. The city is seeking to hire a Coordinator of Cycling to be paid anywhere from $88,307 to $137,252 annually for 35-hour work week with an extra day off every three weeks to the already flush Liveable Streets division of Transportation Planning. As if that’s not enough, the city also has a job for a new Coordinator of Walking, for the same amount of pay in the same department! This is not a joke!Milino says he cannot pass the cost of this tax increase onto his customers. The other self-storage businesses in Calgary, he says, are mostly multi-nationals and because they have more employees than he does they are not considered “passive earners” like he is under federal legislation and their federal tax rate is lower than his so they already have an unfair advantage.“This is a competitive business. If I raise my prices my customers will go elsewhere. And, because he’s a large bricks-and-mortar business, he can’t just pack up and move locations to a nearby municipality, like Airdrie,” reasons Milino, 60, who has two grown and married children.“Not only does a tax increase like this take a huge amount of money from my bottom line but it devalues our business, something that’s happening to all businesses in Calgary.”Richard Truscott, vice president of B.C. and Alberta for the Canadian Federation of Independent Business said their offices are getting a lot of calls from upset members.“There’s a lot of pain,” says Truscott. “Business owners are very disappointed that city council has been unable to not only provide a short-term solution but to create a long-term strategy to deal with the fundamental issue of the imbalance between what residents pay and what businesses pay.”“Can you imagine what would happen if residents saw a 30 per cent increase in their tax bill in one year?” asked Truscott. “People would be grabbing torches and pitch forks.”
A sign for WURST restaurant in Calgary’s Mission district shows the amount that the business’ property taxes have gone up in recent years.
Dean Pilling /
In an effort to make up for the lost revenue caused by the hollowing out of Calgary’s downtown core — where more than 30 per cent of business towers are empty — City Council has shifted the tax burden to small businesses.“I would imagine that this tax increase will cause some business closures,” predicted Truscott. “This huge cost increase, which goes right to the bottom line of these small businesses, could become the tipping point and force some of them to close up shop. Others might move to less costly municipalities.”While city taxes keep going up, at least there is some relief provincially, as the new United Conservative government has scrapped the carbon tax, cut corporate taxes and introduced legislation that will lower some other business costs to help boost job creation.But what one hand gives the other takes away.Milino says he cannot afford to retire and sell his business, which is devalued by these excessive tax bills.At a recent townhall meeting hosted by his ward councillor, Milino says he challenged what he heard.“I said: ‘You’re telling me you have a $250 million problem — a gap in funding — but you don’t have a $250 million problem on the income side, you have a $250 million problem on the spending side.’”The councillor asked what council could do to resolve it.“I said, ‘It’s easy, you should never have allowed Enmax to buy that utility in the state of Maine,’” he said referring to the city-owned utility agreeing in March to purchase Emera Maine for US$1.3 billion — or 1.8 billion in Canadian dollars.Under the deal, Enmax will pay $1.29 billion for the acquisition and assume about $500 million in debt.Milino, a born and raised Calgarian, says his councillor said this was a great investment for the city.“The city should not be the investment business,” said Milino. “They are into picking up garbage, policing and fire departments. Buying this utility is poor optics and as far as I’m concerned it’s a really bad message to every business in this city that we’re not good enough to invest in. They’d rather take their money, spend however much in foreign exchange that’s gone and subject that capital to things we have no control over and plunked it into another country. How is that okay when they keep telling us we have a problem?”
City of Calgary black cart garbage collection
It’s a good question, and even though Enmax runs as a separate entity it is owned by the citizens of Calgary. If Enmax can afford to spend $1.8 billion on a foreign utility, then the city could have demanded a larger dividend and provided some relief to hurting Calgary businesses.If, as Truscott believes, these huge tax increases cause more businesses in Calgary to close shop then the tax gap will continue to grow and the burden — unless efficiencies and cuts are made at our bloated city hall, then residents will shoulder more of the burden in the future.Last year, city hall announced is was finding $600 million in efficiencies. “We asked for details on that and there weren’t any,” revealed Truscott. “The Emperor was completely without clothes. There’s nothing behind that. No detail, no actual cost cutting. It’s really quite shocking.”John Milino says the shock has worn off. As he tries to figure out how he’ll make ends meet, his anger grows.Licia Corbella is a Postmedia opinion columnist. email@example.com