Council approves $15 million in aid for struggling businesses

City council unanimously agreed Wednesday to withdraw $15 million from its rainy day fund to help struggling businesses affected by the economic downturn.

Exactly how council will cushion the blow for business owners next year, including those expected to get hit with significant property tax increases, is yet to be determined.

City administration will report back to council no later than January with options for how the $15 million could be spent.

“We’re really, really, really constrained under the Municipal Government Act in terms of how we treat businesses,” said Mayor Naheed Nenshi.

“For example, we don’t have the ability to offer a tax rebate to one group and not to another group, and that’s where life starts to get very, very complicated.”

Councillors endorsed the motion from Ward 8 Coun. Evan Woolley to set aside $15 million from the fiscal stability reserve to help struggling businesses, after going behind closed doors for “a legal discussion around degrees of freedom” concerning tax relief late Wednesday.

The approval to spend the funds comes 11 months after council rejected Woolley’s pitch for a $60-million, two-year tax break program for struggling small and medium-sized businesses.

Councillors and the mayor have recently warned the unprecedented 22.1 per cent downtown vacancy rate will affect non-residential properties outside the city centre.

Suburban business owners could face significant property tax increases in 2017.

Harvey Fairfield, Calgary’s acting city assessor, estimates 73 per cent of non-residential properties and 79 per cent of businesses will see a tax increase next year.

Amber Ruddy, Alberta director for the Canadian Federation of Independent Business, said the money is a positive step but doesn’t address long-term challenges.

“This is a short-term fix,” she said. “This is a one-year fix to get us through the election period and then what are we left after that?”