Calgary city council opts not to reduce tax hike for businesses

A decision to keep the residential-to-non-residential tax ratio unchanged has left the Calgary Chamber of Commerce "disheartened."

On Tuesday, city council voted to keep the ratio at 52 per cent from residential properties to 48 per cent from non-residential properties, instead of shifting more taxes onto residential properties.

Council debated adjusting this year's tax increase with a stated goal of relieving some of the pressure being felt by Calgary's business sector.

Ultimately, the motion for the ratio to remain unchanged passed.

"We view the decision to maintain the status quo as a decision in favour of a further imbalance, as the ratio is projected to continue climbing," said Deborah Yedlin, the president and CEO of the Calgary Chamber of Commerce.

The city already approved a 4.4 per cent tax hike for 2023, but some, including the chamber, said a shift was required to help the business sector. 

In addition to the scenario that was adopted, administration put two other possible scenarios on the table. One was to shift the equation to 53-47, which would have cost the owner of a median-priced house worth $555,000 an extra $46 in tax this year.

The other option, a change of 54-46, was also considered. That would cost the same homeowner an extra $93 in tax in 2023.

But because council voted to maintain the status quo, the other options were not voted on.

Council divided on route ahead

Council was split on the way forward.

Calgary Mayor Jyoti Gondek said she believed council needed to take action to help the city's small businesses, adding that those businesses comprise 95 per cent of the city's business community. 

"I can tell you that the chamber has done some pretty good work in identifying the fact that businesses with less than 20 staff, businesses who have been in operation for less than 10 years and businesses that are run by visible minorities are most in jeopardy if we don't take some action," she said.

Ward 11 Coun. Kourtney Penner said she, too, was in favour of making a shift to help the business community. She said though she was in favour of shifting that equation to 54-46, she thought the shift to 53-47 made for a good compromise.

"I think, recognizing where we're at in balancing what we hear from residents and homeowners, but what we're also hearing from the business community," she said. 

Other councillors opposed the move.

"I don't see shifting the tax rate now is the best decision for council to make, and adding that burden on Calgarians," said Ward 1 Coun. Sonya Sharp, who said she preferred to leave things status quo for now and re-evaluate the conversation as the year went on.

Ward 13 Coun. Dan McLean also said he would be voting not to shift.

"I'm pretty sure if [councillors are] looking at their inboxes and talking to residents that they're not going to be looking at a tax shift on to residents," he said.

In the end, council voted to maintain the current formula, with eight including Coun. Wong, Sharp, Dhaliwal, Chu, Chabot, McLean, Pootmans and Wyness in favour while Mayor Gondek, Coun. Mian, Spencer, Carra, Walcot, Penner and Demong were the seven who opposed.

Advocating for shift remains priority: Chamber

Yedlin previously told CBC News that the two per cent shift was saleable given the benefits she said would result to the city's economy, adding that the chamber will continue to advocate for a two per cent property tax shift in the coming years.

She also cited an administration report that said Calgary business property owners pay a higher ratio of the overall tax bill compared to other cities around the country.

"We have been actively working with our business community and city council on the importance of business viability and success in Calgary, knowing a thriving business community leads to a vibrant Calgary community more broadly," Yedlin said. 

"We need a strong business environment to continue having a strong economy."

City administrators had sought to secure a decision on the ratio quickly as they need to get tax bills ready to mail this May.