Proposed Calgary budget adjustments call for more cash from homeowners

Proposed adjustments to Calgary's 2024 budget were publicly released Tuesday — and if all of those changes are accepted by council, homeowners could face a 7.8 per cent property tax increase next year.

Currently, that tax hike sits at nearly 3.4 per cent.

But to meet the needs of a fast-growing city, city administration has recommended additional spending for 2024. It also suggests council take steps to ensure businesses can stay competitive by shifting some of their tax burden to residential accounts.

If all of the measures are approved, it could add $16 a month to the property tax bill next year for owners of a median priced house worth $610,000.

The city says even if the measures are approved, Calgary's taxes would be increasing below the rate of inflation plus population growth. Over the past two years, Calgary's population has jumped by 5.1 per cent.

City administration presented its suggestions Tuesday. City council will debate the proposed adjustments to the 2024 budget during the week of Nov. 20.

The city's chief administrative officer, David Duckworth, said administration and council have worked hard to minimize property tax and user fee increases in recent years.

He said in the 2019 to 2023 period, Calgary averaged an annual tax increase of 1.19 per cent.

In a media availability Tuesday, Duckworth said administration has been focused on listening to Calgarians, prompting proposed investment in three main areas: transit, housing and public safety. 

Administration recommended spending in areas like transit and public safety, permanently funding the city's mental health and addictions strategy, and making more money available to cover inflationary pressures that the city is facing.

Administration is also making a recommendation on how council could deal with shifting some of the property tax burden from business properties to residential accounts.

"We have heard from them that they need help. They need help to remain competitive to ensure that we have a thriving business economy here in Calgary," Duckworth said. 

For every dollar of assessed property value, Calgary business property owners are  paying more than four times as much as a residential property owner.

The current ratio for property taxes is 52 per cent coming from residential properties and 48 per cent from non-residential accounts.

Administration is recommending that council shift that ratio by one percentage point annually for the next three years to lower the amount businesses pay. 

Doing so would add two full percentage points to next year's property tax increase for residential property owners, giving them a 7.8 per cent tax hike while dropping the non-residential accounts by two percentage points. That would result in a 3.5 per cent tax hike for 2024 for those property owners.

Calgary Mayor Jyoti Gondek has said many Calgarians also own small businesses — and they need help. 

"As a result of the shift that we need to make, it will fall upon residential property owners to the tune of about $16 a month — about $192 for the year — to do this," she said. 

The same topic was discussed during a vote in February. Ultimately, council voted to leave the tax ratio unchanged.

If that happens again, Gondek said, within a few years the province will intervene. 

Coun. Sonya Sharp said she thinks city administration didn't take enough initiative to cut down on priorities. 

She added that if the proposed budget went to a vote in its current form, she would vote against it.

"When we talk about an increase of $16 a month, that's a lunch or coffee or food for your kids. So there are going to be some difficult conversations to have in the next two weeks," the Ward 1 councillor said. 

She said a 3.4 per cent increase is what Calgarians were told, and it's the number she wants to stick with. 

Current projections show Calgary property taxes are neither the highest nor the lowest among Canadian cities.

Besides funding the new housing strategy approved earlier this year by city council, administration is recommending significant new spending that would be funded through tax revenues, use of reserve funds and budget surpluses.

A $100-million surplus is expected for the 2023 calendar year. The city is also expecting a $165-million windfall in local access and franchise fees due to higher energy costs this year.

Earlier this year, council heard about 30 possible additional spending items to meet Calgarians' priorities.

Administration is recommending only two projects from that list should not be funded in 2024. One was adding more capital money for a proposed new multi-sport field house, and the other was funding two new interchanges on Macleod Trail south of Stoney Trail.

If council accepts the recommendations, those projects will be delayed until the next four-year budget cycle (2027-30).

The full property tax bill for next year will not be finalized until the spring as the city must wait for the provincial government to set the education property tax.