Reluctant council OK’S tax rebate for businesses

The city will blunt the impact of tax hikes on small businesses one more time after a latenight council vote Monday.

The decision came just before 9:30 p.m. after a full day of council, approving $30 million in property-tax rebates to cap non-residential tax increases at 10 per cent this year.

Only Couns. Druh Farrell and Jyoti Gondek were opposed. Couns. Evan Woolley, Ray Jones and Diane Colley-urquhart were absent.

Multiple councillors said they would support the move, but only reluctantly.

“It doesn’t solve the problem,” Coun. Gian-carlo Carra said. “It softens the blow, sort of. I hate it, but I understand the use, so I’m going to reluctantly vote for it.”

Coun. Ward Sutherland said he was in favour, but he wished council would find the money for the rebate in cuts rather than savings.

The vote comes after members of council’s priorities and finance committee narrowly passed the tax relief program last month. At the time, Mayor Naheed Nenshi urged councillors to vote in favour of another cash injection or risk “exactly the situation we had last year” when business owners arrived at city hall in droves, protesting steep tax hikes.

Monday’s vote brings the total amount the city has spent since 2017 on tax relief programs for businesses to nearly $250 million.

TAX SHIFT

City council has been struggling with Calgary’s thorny “tax shift” problem for years as the economic downturn spurred persistently high office vacancy rates downtown. Suppressed property values followed, triggering an automatic shift in the tax burden to businesses outside the core.

Despite council’s decision to rebalance the tax burden between businesses and homeowners last November, without another rebate program, some retail properties in the city would still face tax hikes of up to 17 per cent in 2020.

Last fall’s budget adjustments shifted to a split in which homeowners pay 52 per cent of municipal taxes while businesses pay 48.

Nenshi argued the rebates are necessary to ensure businesses have a chance to adjust to the “new normal.”

But some councillors said the city is fuelling unrealistic expectations of ongoing tax breaks without truly dealing with underlying budget issues.

Gondek said she couldn’t support continuing the program.

“Sorry, no change of heart here,” she said.

“I understand that it’s at least doing something ... but I would ask the question what else could we do with $30 million that would assist the business community?”

Nenshi said he agreed with the need for a better way, but council wasn’t able to come up with a solution last year and, “I don’t want to go through that again.”

“Like everyone else, it is a hold-my-nose vote for me.”

Several councillors have also issued a proposal to ask the Alberta government to set up a task force to explore reforms to the property tax assessment process.

Council was set to debate the motion Monday, but didn’t finish the agenda by the end of the night. They’ll discuss it Tuesday.