Calgary woes familiar to Montreal
High downtown office vacancy rates and daunting tax shift to non-residential businesses
Decades ago, Montreal found itself staring down a problem too familiar to Calgary: head offices fleeing downtown and an economic downturn.
An expert said Calgary might want to explore how Montreal pulled through.
For much of the 20th century, Montreal was a prime economic engine of Canada’s economy. But throughout the ’60s and ’70s, some of them were lured west to Toronto, a city growing faster than Montreal and receiving more business investment.
Montreal lost a lot of wellheeled downtown office tenants and suffered an economic slowdown until the early 1990s. But the city’s solution wasn’t to try to wrangle them all back at once. Raphäel Fischler, dean of the faculty of environmental design at the Université de Montréal, said it changed tack instead.
“I’d say that the strategy of Montreal was to turn its downtown into a multi-functional entity rather than a just a central business district.
This stands in stark contrast to Calgary’s traditional boom-bust attitude to economic conditions. When the oil and gas industry crashed in 2014, corporate head offices in Calgary slashed staff or fled the city entirely. Today, many of these tenants have not returned, and city council is still wondering how to ensure the property tax burden once shouldered by downtown head offices doesn’t
crush non-residential property owners outside its core.
City manager Jeff Fielding told the city’s priorities and finance committee Tuesday the past three years have seen core property values from office space tumble over $12.5 billion, amounting to a $192million tax burden that has to be shared between 13,815 commercial properties. And there isn’t a clear way forward for Calgary just yet.
“This is our hot potato. I’ve never seen anything like it. It’s unique to Calgary.”
Take the Cité de Multimédia, a neighbourhood just south of Montreal’s core. Once a derelict site, it filled up after the Quebec offered a 40 per cent tax credit to multimedia companies willing to move in, calculated on the salaries of their employees.
See city’s potential solutions at thestar.com/calgary
A bird’s-eye view of downtown Montreal, which underwent heavy revitalization over a span of 20 years. Many people agree that it’s something Calgary could consider.