Chamber Position on Non-Residential Property Taxes

CALGARY – The Calgary Chamber is, once again, calling on City Council to restructure property taxes in the next municipal budget. The Chamber released a property tax proposal aimed at relieving the tax burden on businesses that would see a significant shift in property tax allocation, which they are urging City Council adopt as part of their budget deliberations.

“The property tax issue in Calgary needs to be fixed now to avoid significant business disruption and closure,” Chamber CEO Sandip Lalli warned. “The Chamber has been advocating for a property tax shift for over a year and it’s time for Council to act.”

Property taxes on businesses in Calgary have seen the largest hikes among major cities in Canada for the last four years. The tax increases are a result of a substantial reduction in assessed value in the downtown core due to high vacancy rates. These vacancies have shifted the tax burden to businesses in other parts of the city, leading to tax rates that have become unsustainable.

Council has ignored the non-residential property tax issue by creating band-aid solutions that have cost over one hundred and fifty million dollars but have not solved the problem. Taxes have continued to increase and, with no money left to create temporary solutions going forward, non-residential property taxes will skyrocket by 2020. The Calgary business community will not survive under the current non-residential tax system.

Calgary currently has the highest tax ratio of non-residential to residential property tax (4.2-1) in Canada. This means that Calgary businesses pay a significantly higher portion of municipal tax compared to residential properties in the City. Lowering the non-residential to residential property tax ratio will increase Calgary’s competitiveness, encourage new business to develop here and will allow existing businesses to flourish.

The proposal that the Chamber will be submitting to Council recommends a redistribution of property taxes in the city and move the non-residential to residential property tax ratio to 3.1:1 by 2021 with a tax split of 52 per cent residential to 48 per cent non-residential. The current tax split is 49 per cent residential to 51 per cent non-residential.

The proposed shift better represents the use of services provided by municipal tax dollars. Under this proposal, the typical family home (valued at$455,000) would see a property tax increase of $136 annually or an additional $11/month. This ratio shift was one of the options in the final report of the Tax Shift Assessment Working Group, which was given to the City’s Priorities and Finance Committee in early October 2019.

This ratio inversion coupled with a 0 per cent spending increase, will be a massive step toward relieving the burden on businesses and creating a business environment that can support the businesses Calgarians love and rely on.

Along with reducing the ratio from its current state, the Chamber recommends the City practice fiscal restraint and continue to find operational efficiencies. As well, the Chamber recommends that they also sell non-revenue generating city owned land.

For more information: Our case for rebalancing the property tax

Media inquiries

For all media inquiries, please contact media@calgarychamber.com or (403) 750-0401.

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.