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Calgary approves coronavirus property tax penalty relief

Calgary taxpayers will have the option to put off paying their property taxes June 30 without penalty, but they’ll have to make it up after Sept. 30.

Calgary city councillors kept this year’s property tax increase intact, while voting to forgo the penalty for late payment up until Sept. 30.

After City of Calgary Chief Financial Officer Carla Male laid out the city’s financial picture, in which the city loses nearly $18 million in revenue per month under the current strain of COVID-19-related pressures, Male outlined what the tax situation might entail for citizens and business owners.

In the end, the city still needs to collect $1.9 billion in property tax.

“The actions Council approved support citizens and businesses today, as we continue to analyze and consider additional measures for medium- and long-term recovery,” said Mayor Naheed Nenshi.

Here’s specifically what the city approved today, according to a release sent out Monday evening.

  1. The tax payment deadline has been extended from June 30 to September 30 without late payment penalties; and
  2. The Tax Installment Payment Plan (TIPP) has suspended its 2% filing fee for taxpayers who join TIPP after January 1, which has been suspended until January 1, 2021.

‘It would be preferable if there was some sort of abatement’: Chad McCormick

At the end of the day, citizens and businesses are still on the hook for their full property tax amount. Allowing a deferral, just puts the burden off until later in the year, said Chad McCormick, member of the business support task force.

“It would be preferable if there was some sort of abatement,” he said.

“Or the very least if the utilities are deferred, it needs to be a very long payback over years, not months.”

McCormick said even when business starts back up, there’s going be an avalanche of restart costs. That’s on top of the mountain of debt they’ve incurred by putting off utilities and property taxes.

And still, many haven’t had the chance to make any revenue to pay these bills.

“I know it’s not in the best interest of what the city’s put forward today, but (businesses) are not in the deferral business in how we receive funds,” McCormick said.

Tweet thread on what deferrals could mean to Calgary businesses.

Coun. Sean Chu said he anticipated a situation where many companies would defer their taxes, hoping to survive. He was concerned the city would see hundreds of business failures. That makes the collection of those taxes difficult, if not, impossible.

“People still have to pay at the end of the day,” he said.

Mayor Nenshi acknowledged this and said it keeps him up at night thinking about it. He said, as he has many times throughout all of this, that the city can’t run a deficit.

“We’re not in a position to forgive the taxes because we have to balance our budget,” he said.

“But if we can get an infusion of funds from the federal government, provincial government, or some flexibility in how we think about our budget, that we might need to position to be able to forgive things.”

Coun. Farkas attempts run at property tax hike

Current revenue impact to the City of Calgary.

Coun. Jeromy Farkas attended council in person Monday, the sole councillor who joined Mayor Nenshi in council chambers. All others dialled in remotely considering the coronavirus public health measures.

Coun. Farkas stood up in council and said the deferrals weren’t enough. He proposed an amendment to freeze city taxes.

“This proposal to still increase property taxes by seven and a half percent but offer deferrals is just not acceptable,” he said.

“As we’ve seen previously, other orders of government are taking needed steps to provide relief, not just delaying and worsening the pain. I believe that we have a moral obligation to step up as well.”

Farkas pointed to city reserves, including the “corporate welfare slush fund” in his plea to have the tax bill reduced.

Mayor Nenshi responded, critical of Farkas’s “attempt to profit off” this crisis.

“What a shame. What a shame that all it takes is one council meeting to revert back to these ways to attempt to use the emergency as a platform to get stuff done that you couldn’t do through council normally,” Nenshi said.

He said this increase amounts to $20 per month for a homeowner. For businesses a drop of $1,000 per month. The downside is the impact to tens of thousands of citizens with the loss of programs and supports, Nenshi said.

Coun. Evan Woolley said Coun. Farkas should be ashamed of the amendment.

“I think your political profiteering off of this very, very difficult time, when we’ve all been working so hard to come together, and the use of the language that you just did is just unbelievably shameful,” Woolley said.

Coun. Sutherland piled on with, “I would say It’s just a case of panic and limited skill set of the individual.”

That amendment was defeated.