Council approves another tax relief program as it sets out 2021 budget

$21-million rebate plan for businesses not ideal, but necessary, Nenshi says

City council will again use onetime money to blunt steep property tax increases caused by ongoing tax-assessment shifts.

Council approved the 2021 budget adjustments Thursday evening after four days of discussion, adding in a $21-million rebate for businesses, ensuring non-residential property tax bills don't increase by more than 10 per cent.

Certain types of businesses would have faced property tax bills with 25 per cent hikes compared to this year without that money. Large-format industrial warehouses were due for the biggest increases, but retail businesses along stretches such as 17th Avenue S.W. were also looking at increases in the neighbourhood of 17 per cent. Those numbers are a result of decreases in value among other types of businesses, which have to be made up elsewhere — this year, tax assessments for hotels are plunging because the COVID-19 pandemic has drastically decreased their value.

Council has already spent nearly $250 million on this problem in recent years in a struggle to ease the ongoing effect of the economic downturn and persistently high downtown office vacancy rates. And the final day of budget debates brought a familiar chorus of council members saying that as much as they don't like it, another tax rebate is necessary.

“Yet again, as much as we all hate it, we just can't,” Mayor Naheed Nenshi said. “We just can't allow this small number of people to pay a very high tax increase.”

Coun. Jeromy Farkas added that it isn't “the long-term solution that Calgarians deserve to have,” but without further spending cuts, “this will allow us to live another day.”

Part of the rebate program's $21-million total comes from unused money allocated for relief in previous years, and some of it comes from the city's rainy-day reserve fund.

Council ultimately made few changes to the budget adjustments city officials proposed. The 2021 budget sees about $90 million in cuts across city services to deliver a slight property tax decrease for the “average” single detached homeowner, with a property worth $445,000. Condo dwellers with an average valued property around $235,000 will see a decrease of about two per cent.

Transit fares and black, blue and green bin fees will be held flat at 2020 levels instead of going up next year. Council also agreed to a small increase in capital funding for the city's tree canopy.

The budget cuts mean the city will shed 162 full-time positions. The proportion of job losses that will be direct layoffs isn't yet known, and officials are still working out which departments will lose staff.