The city council is considering boosting this year’s tax hike to help lower business tax bills
With a property tax increase already approved for 2023, the City Council will debate on Tuesday whether to raise that figure a little higher.
The administration has presented three scenarios to the city council as politicians tackle the thorny question of how much tax revenue it should generate from non-residential versus residential real estate.
Currently, private clients pay 52 percent of all tax dollars, while commercial property owners pay 48 percent.
The administration suggests the council could shift that equation to 53-47, which would cost the owner of a home that averages $555,000 an additional $46 in taxes this year.
It says shifting this equation to 54-46 isn’t too risky either, but that would cost the same homeowner an additional $93 in taxes in 2023.
Alternatively, the administration says another option for the council is to simply leave the formula alone, as a 4.4 per cent tax hike has already been approved for this year.
Calgary Chamber of Commerce President Deborah Yedlin said her organization supports the council changing the ratio.
“We really need to make sure our companies are competitive. 95 percent of our businesses in Calgary are small businesses,” said Yedlin.
“Let’s make sure that they can be as successful as possible, because then everyone benefits.”
She said a government report notes that business owners in Calgary pay a higher percentage of the total tax bill than many other cities in Alberta and Canada.
“If we want to attract more opportunities to the city, we need to be cost competitive. And if we’re not keeping up with the rest of the country, we’ll have to think about it.”
From her perspective, Yedlin said she believes a two percentage point shift is sellable given the benefits that would accrue to the city-wide economy.
She said this type of increase translates into less than $8 more per month for a typical homeowner.
count. Sonya Sharp supported the idea of moving this tax deferral discussion from last November’s budget debate to the new year.
She said she wanted taxpayers to take a look at the updated property valuation information so they could see how the tax increase approved in November would affect them.
Now that they have that information, and the owner of a home at the average price knows they’re going to face a 5.5 percent tax increase, they don’t think this is a good time to increase that increase any further.
“I don’t think it will go down well,” Sharp said.
“We talk a lot about affordability and the cost of everything going up. So I don’t think this is the right time to increase that load.”
With the city’s four-year budget already providing for annual tax increases for 2023-26, Sharp was asked when would be a good time for the council to support a tax shift.
She suggested waiting until downtown office vacancies fall further, as that would help the recovery in office property values. They are important sources of tax revenue for the city.
Sharp also suggested that the city continue to lobby the provincial government to change the municipal tax system.
Municipalities cannot currently create new tax categories in the non-residential sector. For example, she said the city council cannot create a separate tax rate for small businesses.
The administration wants a decision from the council on a tax deferral soon.
The UCP government is expected to hear the tax requirement for provincial formation soon when the annual spring budget is presented in the legislature.
The city needs all the final numbers as it prepares to send out this year’s tax bills in late May.