Property tax decision fails to provide needed business certainty, long-term solution

Statement from Calgary Chamber President and CEO, Sandip Lalli, on City Council’s work to respond to the Downtown Tax Shift.

CALGARY - "On behalf of the Calgary business community I would like to acknowledge the time and energy that City Council and Administration has put in to discuss the growing burden many Calgary businesses are facing due to the downtown tax shift.

"While the Calgary business community appreciates council’s efforts to begin the shift to a fairer, more equitable property tax burden for businesses, we remain troubled the decision today does not go far enough in addressing the structural changes needed to fix the inequity problem for the long term.

"We are also concerned about the uncertainty for immediate relief needed this year for businesses experiencing sharply inflated tax bills due to the downtown tax shift.

"It really is situation critical for many businesses that are at risk due to no fault of their own. Council had an opportunity to demonstrate leadership on business forward policies but unfortunately, they came up short today.

"In particular, the Chamber is concerned that a proposed short-term solution involving a targeted grant for certain businesses could be unfair for larger businesses experiencing the same rising price shocks due to the downtown shift.

"Additionally, it is difficult to determine how to define what a small business is and who might be eligible for grants. The Chamber is also concerned about the administrative burden of a grant application process for both the city and businesses. More bureaucracy is not the way forward.

"We recognize and appreciate efforts to use potential provincial tax room to reduce the tax burden on businesses, however this does not offer a reliable long-term structural solution that businesses are looking for.

"Delaying long-term structural changes for a more equitable split between the non-residential and residential tax base will contribute to further business uncertainty and a lack of confidence in the Calgary market.

"For too long the Calgary business community has shouldered the lion’s share of property tax burden. Conditions must change to benefit struggling businesses and to maintain the jobs they create for Calgarians.

"Currently 14,000 non-residential accounts carry 55 per cent of the city’s tax burden, while 500,000 residential accounts carry 45 per cent. The decision today begins the shift for a more equitable split but remains misaligned with the proportion of taxes businesses pay in other cities.

"For instance, in Edmonton, residential accounts make up 52 per cent of the tax burden, and in Toronto, residential properties account for 63 per cent of the burden.

"Additionally, at more than 4:1, Calgary’s non-residential to residential mill rate property ratio (the amount businesses pay compared to residents) is the highest of large cities in Canada. In Edmonton and Toronto, that ratio is a much more reasonable 2.8:1.

"Until that ratio is more equitable and locked in, we will not have the long-term structural certainty in the property tax system that businesses need.

With today’s decision, we have significant concerns that we will be back in this same position a year from now."

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About the Calgary Chamber

The Calgary Chamber is an independent non-profit, non-partisan business organization. For 128 years the Chamber has worked to build a business community that nourishes, powers and inspires the world.