What a proposed 0.64% tax hike could mean for Calgarians, and police

City of Calgary is asking council to approve a small tax rate increase for 2022, despite hopes for a freeze.

It's the fourth and final year of the city's current four-year budget cycle.

The proposed tax rate change can be broken down to a 0.64 per cent base budget increase and a recommendation to invest a further 0.35 per cent in the police service budget.

If approved by council, this combined total would see a 0.99 per cent tax increase — down from the previously approved 3.46 per cent tax rate directed in 2018. 

This year, homeowners saw a 1.7 per cent property tax cut, and administration said in May there was the possibility of a tax freeze for next year.

But the city says given inflation and the fact that Calgary's population continues to grow by about 18,000 people each year, it's not sustainable to freeze or lower property taxes without affecting the services Calgarians rely on.

As well, the COVID-19 pandemic has had lasting effects on services, such as lower transit ridership and less revenue from parking, penalties and recreation facilities.

The city says the tax hike of less than one per cent for next year will cover small spending increases, including better maintenance in parks and moving ahead with two temporary fire stations to ensure good response times to new communities.

The proposed budget adjustments hold most city fees at 2021 levels, meaning there will be no change for things like transit fares and fees for waste and recycling cart services.

City manager David Duckworth said at a news conference Monday that council is still in a good position to bring in some other strategic investments, such as affordable housing and transportation improvements.

"We will continue to find opportunities where we can save, but at this point in time, we're at that point where we probably do strongly recommend to get ahead on some of those files we need to start to reinvest."

Property tax

The proposed property tax increase as well as expected increases in property assessment would add about $90 a year to the tax bill for the median-priced Calgary house. 

A year-over-year change for the typical single residential home will be slightly over 2.0 per cent for 2021, and around 2.6 per cent for 2022.

The anticipated property value changes are partly the reason for the tax impacts.

After several years of declining property values, downtown office buildings are expected to have a slight recovery in their values.

That is forecasted to result in a small increase in property taxes.

Police service budget

The tax increase could be slightly higher if council approves a call from the Calgary police commission to boost the police budget by $6.1 million. The money could fund 38 new positions — a blend of civilians and officers.

This would be on top of the 60 positions council had already approved for in next year's budget.

• Calgary police chief says he can support reallocating $8M of police budget next year

Investment in policing is in response to operational pressures, impacts from the pandemic and employee wellness, among other items.

In a press conference on Monday afternoon, Calgary police Chief Mark Neufeld said putting forward a request to increase the police budget in 2022 was an "extremely difficult decision."

"I understand this is a very difficult time for Calgarians, and just how challenging that makes it for members of city council, who are required to balance a variety of priorities," Neufeld said.

Neufeld said reports of social disorder, hate crimes, violent crimes, protests and demonstrations have been increasing in Calgary.

The budget increase would be used to help reduce gun violence, meet the police service's commitments to equity, diversity, inclusion and anti-racism, and to improve community-based policing and engagement, he said.

"I want to reassure you there's been an incredible amount of thought and scrutiny over this request," Neufeld said.

"Having this growth will allow us to focus existing resources on significant demands in a growing city."

Mayor and council react

Mayor Jyoti Gondek says council has to set the stage for Calgary's economic recovery, and she wouldn't be surprised if council wants to restore some of the budget cuts made in the past.

"I think if we are very prudent about what we are making decisions about this time around, it will guide us well into the next four-year cycle," she said.

"Serving the best interests of Calgarians should not be stuck on a number. I think what we need to do is figure out what it is that people are seeking to have a great quality of life in our city, and then we figure out what the numbers look like from there."

A newcomer to council, Courtney Walcott, representing Ward 8, said that during the election campaign, he heard from the public that some city services haven't been up to par.

"In particular, things like transit, whether we start looking at how we get to pre-pandemic service levels, but also actually how we can increase the frequency of transit so that we're actually reaching some climate targets that go along with diversification for how we move," he said.

However, he says, the proposed budget won't be able to fund some of these initiatives.

"The reality is that the target of this budget was as minimal of a property tax increase as possible, but that alone is not going to address the needs many of us have discussed over the last six months."

Citizen survey

Calgarians are still split over whether taxes should be slightly raised or services cut, according to the city's 2021 fall citizen research results.

The results were released Monday and 50 per cent of the 2,500 people surveyed said taxes should be slightly raised to improve or maintain city services — a slight decrease from last year when 57 per cent preferred for taxes to be raised.

On the flip side, 43 per cent wanted services cut and taxes kept the same.

City council will discuss the proposed adjustments and other proposals they might have during the annual budget debate, which will start Nov. 22.