Calgary has an equalization problem, too

Reduce tax haul from the city, Diane Colley-urquhart urges the premier.

Premier Kenney, I agree with you lowering corporate tax rates in the province to stimulate the economy and create more jobs for Albertans. Corporations and small businesses need the break now more than ever. Small business is the backbone of our economy.

I agree with you in fighting for Alberta to address equalization payments to Ottawa — as our tax dollars get redistributed to other provinces in need. Alberta is now a “have-not province” and hasn’t received any equalization adjustments from Ottawa amid this fouryear recession. Calgary has an equalization problem too.

I know you’re considering a referendum for a new deal on the principle of federal equalization payments in the 2021 municipal election. As you have stated, “it wouldn’t guarantee a particular outcome, but what it would do is elevate our fight for fairness to the top of the national agenda.” That’s what Calgary wants too. Like the Government of Alberta, we also believe it is critical to reduce business taxes and not have

to increase property taxes.

Another 14,000 Albertans lost their jobs this past month. Calgary has been hardest hit. This recession has resulted in a 2019 tax-revenue loss of $250 million in the downtown core due to lower market-value property assessments and a 25-per-cent vacancy rate — millions lost in the previous three years. The province and city can’t work at cross-purposes.

Council addressed the 2019 tax-revenue loss by taking $130.9 million from reserves for immediate tax relief for businesses. In addition, to prevent the tax burden being shifted to homeowners, council just directed another $60 million in permanent operating cuts over the next five months.

Why? Because as a city we are not allowed to run annual operating deficits like the province does. We must balance the books every year. We’ve been cutting red tape for at least five years. More recently, council has directed that we seek proposals from external experts about services available to modernize and transform municipal government into the 21st century and identify provincial responsibilities and constraints in doing so.

Property taxes are the primary revenue source for the city’s operating budget. This is collected from 13,815 non-residential properties and approximately 500,000 residential properties. Property taxes need to stay here. A one-per-cent increase in taxes equates to $17 million.

During this economic downturn, the province has taken approximately $3.7 billion from Calgary property taxpayers over the past five years (2014 — $666M; 2015 — $715M; 2016 — $785M; 2017 — $785M; 2018 — $780M), and redistributed it across the province for educational purposes.

Recently passed Bill 3 will see Alberta’s 12-percent corporate rate cut by one percentage point this year — the lowest in Canada. The rate would be reduced by the same amount in the following three years. I agree that this will reinvigorate Alberta’s economy by cutting taxes, reducing regulations, growing businesses and jobs, which in turn, will create more revenue from other taxes to make up for the cut. As you’ve said, “the economic crisis facing Alberta is not going to be resolved by tinkering, half-measures and a few subsidies.” Nor will it in Calgary. We don’t want provincial subsidies or unreliable grants to run the city.

I’ve been impressed with what you’ve been able to accomplish in your first

100 days and the bills you have legislated — just with the stroke of a pen. It will be counterproductive if the province and the city can’t immediately work together to address this equalization problem. There is an urgent need for taxation fairness between Calgary and the Government of Alberta in order for us to modernize and transform municipal government now and into the 21st century.

So starting in 2020, over a four-year period during your provincial mandate, please consider starting to reduce your annual take of our property tax by 10 per cent, 11 per cent, 12 per cent and 13 per cent. More would be appreciated. Let’s just do it.

We’re not asking for handouts. We just want to keep what’s ours.

Diane Colley-urquhart is city councillor for Ward 13 in Calgary and chair of the community and protective services committee.