Calgary business groups pan city council's tax hike

Business groups are giving the thumbs down to the tax rate increase approved by city council for 2022.

On Wednesday, city council voted to boost next year's tax rate by 3.87 per cent.

Administration was recommending council back an increase of less than one per cent.

However, council voted for numerous add-ons, which boosted next year's tax rate.

Mayor Jyoti Gondek said most of council was responding to the priorities they heard from Calgarians during this year's municipal election campaign.

More police officers and firefighters, support for expanded climate resiliency programs, and a major increase to the snow and ice control budget were among the many changes.

Chamber finds it 'jarring'

The president and CEO of the Calgary Chamber of Commerce, Deborah Yedlin, described council's decision to boost taxes as "jarring."

"We were sort of expecting something under one per cent and this is a whole lot higher."

She said this isn't the time to be raising property taxes by this amount.

"This is going to come on top of some major pressures, of inflation and the rising cost of doing business. The challenges that we're having with supply chain problems and rising inputs, whether it's labour, energy is more expensive," said Yedlin. 

"There's so many other factors right now at play in terms of our economic challenges, and that four per cent is just going to be adding to that pile."

She did have praise for the new city council's decision to continue backing the city's downtown strategy.

Council voted to take $55 million from reserve funds to continue supporting efforts by downtown building owners to convert empty office space to residential or other uses.

The city put $45 million into that effort for 2021 and the program was fully subscribed. 

Yedlin said the program will help improve downtown land values and that would boost city tax revenues, taking pressure off of business property owners elsewhere in Calgary.

CFIB wanted spending control

The Canadian Federation of Independent Business is also panning council's budget decisions.

Annie Dormuth with the small business group said many business owners have had to layoff staff or tighten their belts over the past couple of years, so no one was anticipating a tax increase approaching four per cent.

"Throughout this entire pandemic, small businesses have learned to do more with less," said Dormuth.  

"I really have to put it on city council, why they couldn't have done the same thing in this year's budget adjustment. In 2020, they were able to reduce operating spending by eight per cent."

She took issue with the timing of some of council's decisions that will ultimately result in hiring more than 150 new public servants.

"For example, hiring 18 new additional staff for climate change. Isn't that something that could have been found with existing administration?"

Dormuth said CFIB surveyed its Calgary members and found that imposing higher taxes was not their top priority.

She expects business owners will have to cut spending or take on more debt to cover any higher tax costs. Dormuth said passing costs on to customers isn't an option as that will merely reduce the amount of business they might receive.

Next year's final tax bill won't be finalized by city council until the spring.

It must wait to receive the province's requisition for the education property tax, something that typically comes in the government's spring budget.