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Friday, December 3, 2021

Calgary to spend $43M to help local businesses

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Calgary businesses will be getting some help with their property tax bills, but in a more targeted way.

Monday morning, Calgary city council passed a notice of motion that capped increases in non-residential income taxes to 10 per cent, costing the city an estimated $13 million.

This is the fifth year in a row the city is offering a phased tax program (PTP), and the same measure council agreed to during budget deliberations in Nov. 2020.

In addition, Ward 6 Coun. Jeff Davison suggested creating a $30 million fund for Calgary-based businesses who have seen business decline during the coronavirus pandemic.

“We know that about 56 per cent of those that would receive (PTP) benefit would be those publicly traded companies, those private equity firms that have been supported and have profited through the pandemic,” Davison said.

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“One of the things we need to do is figure out a better way that we can support local.”

Details on how businesses can tap into those funds are still preliminary, with council directing administration to work with the business advisory committee through the COFLEX program to develop that process by March 22.

Davison said the nascent program is intended for businesses city-wide.

“We didn’t want to look whether it’s in the industrial land sector, we didn’t want to look at just downtown,” he said. “Across the board, where can that money help support local?”

Mayor Naheed Nenshi said council previously considered a similar program in 2018, saying they could “dust that off” rather than start anew.

“If we’re willing to take that money out of the bank and spend it for the benefit of businesses, let’s do that,” he said.

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Annie Dormuth with the Canadian Federation of Independent Businesses said the PTP and local business fund was “definitely good news,” but said more work is needed.

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“It really doesn’t address the fundamental issues with regards to property tax unfairness in Calgary,” Dormuth said.

Dormuth said even an 10 per cent increase in property taxes will hit businesses in the 17th Avenue Retail & Entertainment District hard.

“Keep in mind, 17 Avenue is filled with some of the hardest hit businesses, specifically thinking about the hospitality industry along that one street,” Dormuth told Global News.

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“That is why I think we need to look at creative solutions to look at that $30 million funding earmarked for COVID relief and specifically look at those hardest hit industries in Calgary and get some additional relief to them.”

The CFIB is part of the city’s business advisory committee and will assist in drafting criteria for the COVID-19 relief funds.

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Dormuth said the business advocacy group is also planning to take aim at the property tax problem municipalities are facing.

“I know the municipal governments are in a bind a bit about municipal tax rates, property tax rates, because it is set by the province.”

The Calgary Chamber of Commerce welcomed council’s decision, calling for “fairness and sustainability in our property tax system.”

““The city’s current financial position demands thoughtful and creative solutions to reduce costs and generate revenue without placing the tax burden on businesses and the citizens they employ and serve,” interim CEO Murray Sigler said in a statement.

“Today’s measures point us in the right direction, but many businesses in Calgary will still see property tax increases next year due to structural problems within the tax system, and the shift of the tax burden from the high-rises in our downtown to businesses outside of the core.”

–with files from Adam MacVicar, Global News

© 2021 Global News, a division of Corus Entertainment Inc.

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