Calgary Mayor Naheed Nenshi said that when he looks back at 2019 year-end interviews, he wasn’t telling journalists then that the 2020 focus would be on a pandemic.
“I did say that (the focus) would be on economic growth,” Mayor Nenshi said.
In part two of our year-end interview series with Mayor Nenshi, he talked about the still-struggling Calgary economy and the impact it could continue to have on city budgets.
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Calgary’s unemployment rate is still the highest in the country. Vacancy rates in the downtown are edging up, but still at 25 per cent. Downtown towers are empty. Oil prices remain low.
Then, the 2020 pandemic. COVID-19 was the economic prizefighter winding up for a knockout blow.
Calgary will get up. It may just have to take an eight count.
“Every time we see green shoots of recovery in our very slow recovery, other forces, external forces, tend to knock them down, Nenshi said.
He said the pandemic hit us in a different way.
“It didn’t only affect the core economic activity, it affected the service economy,” he said.
Restaurants, bars, dry cleaners, store front retail, the personal services industry – it’s all been hit hard in 2020. Businesses have shut their doors across Calgary, unable to survive the lethal combo of public health measures and rising property taxes.
“Those, of course, exacerbated by moving to online retail. So, it really is a perfect storm,” the mayor said.
Impact on city finances
Property values in Calgary’s downtown core continue to flounder. Real estate activity has been fickle, taking advantage of pockets of interest during COVID-19. Still, values are generally down.
All of this, coupled with a poor economy, it leaves the city budget in a bind.
Calgarians got a tax rate decrease in the November mid-cycle adjustment. It will mean a break on the city’s portion of the property tax bill for a typical single-family home.
Some businesses on the other hand, will see a steep increase. In fact, it was projected to be so steep, the city had to cap it at 10 per cent. It’s for much of the warehouse sector, mainly because of the spike in online sales.
But neighbourhood strip malls and 17 Avenue SW retail were also looking at 17 per cent property tax increases.
Mayor Nenshi said the work that’s been done over the past decade to deliver services more effectively and efficiently and still provide Calgary the cash to weather a pandemic.
He likened it to the ant and the grasshopper.
“We were able to put money away in the good times and use it to build our resilience against the bad times,” he said.
Hundreds of millions have been put back into providing rebates for businesses to help them through the tax shift, he said. They’ve also deferred utility payments and property taxes interest free
But, the council that gets elected in 2021 to examine the November budget adjustment might be limited in what they can do.
“I don’t think it will be miserable,” Mayor Nenshi said.
“I will say that the new city council that will be elected in October will not have a lot of money to play with. They won’t have the ability to fund really big promises or big changes.”
That is, unless they want to increase taxes, he said.
Got to get back to economic recovery
Right now, job one is keeping Calgarians safe and healthy, Mayor Nenshi said.
But, it’s time to think about how the city moves forward.
When he looks back at those 2019 interviews, he said he would be on the road selling Calgary, trying to bring in more investment. Mayor Nenshi said for the first eight weeks in 2020 he stayed at seven different hotels in seven different cities.
“I’ve barely left the boundaries of Calgary… in the last 10 months,” he said.
“That’s something we’ve got to get right back on very quickly.”
When things do get back on track, it will be about rebuilding, transitioning and coming back stronger, Mayor Nenshi said.