Calgary businesses may yet get tax relief again this year as a city committee voted in favour of extending the city’s phased tax program (PTP).
Councillors on the Priorities and Finance committee voted 4-3 Tuesday in favour of providing $30 million in one-time tax rebates in 2020 for Calgary businesses. This is effectively an extension of a program that began in 2017.
This cash will limit the tax increase for Calgary businesses to plus 10 per cent.
This measure will still need to be approved at a full meeting of council next month.
Councillors debated whether they should extend the tax relief for one more year or make budget cuts to ensure that they don’t need as much tax revenue.
Late last year during budget adjustments, city businesses benefitted from council’s decision to shift the bulk of the city’s property tax burden to residential accounts. Still, some Calgary businesses were looking at a potential tax increase this year of 18 per cent.
“We know the PTP is imperfect,” said mayor Nenshi.
“Last year, I stood up and said, ‘the PTP is imperfect, let’s find a better solution.’ We did not find a better solution.”
Nenshi said that even though they made the tax shift changes last fall, this was a chance to ease the transition for city businesses.
“It’s interesting that those who have claimed to have been the largest advocates for business are precisely the ones saying, ‘nah, just let them hang in the wind,’ and I’m not really interested in doing that,” Nenshi said.
Calgary business wanted to see structural change: Gondek
Coun. Jyoti Gondek, who voted against the proposal, said that the city needs to examine further the amount of revenue it needs to operate. That’s how they can achieve longer-term tax relief for city businesses.
“Last year we heard loud and clear from businesses that the phased tax program wasn’t working and that was not what they wanted to see,” said Gondek.
“They wanted to see a major structural change. They wanted to see a permanent solution and they pushed for a proportional share shift – which is what we did.”
Gondek said to make the tax shift changes and then “compound” it with the additional PTP, businesses aren’t going to get used to paying the full amount of their property taxes.
“We’re going to make them deluded for another year that they’re going to keep getting a break and I can’t keep doing that,” she said.
Gondek said the operating budget is what drives property taxes and if there’s no change there, then businesses will continue to see taxes rises.
“We need to fund an operating budget. The smaller the operating budget, the less people have to pay in taxes. It’s pretty simple, but we’ve never really looked at it that way.”