Calgary will try to hold the property tax change at zero for 2022, but the mayor warned they can’t hold that line indefinitely.
Councillors received a budget update at Tuesday’s Priorities and Finance committee meeting.
City of Calgary Chief Financial Officer (CFO) Carla Male said they would try limit property tax changes
“With the significant changes our city is experiencing, we will make every effort to limit the strain on Calgarians by working towards a zero per cent change to the property tax rates in 2022,” said Male.
Male said they’d get there by continuing work on the Solutions for Achieving Value and Excellence (SAVE) program.
“We believe that this is the most effective and efficient vehicle for working towards zero per cent,” she said.
In November 2019, city council had directed administration to target a $24 million reduction in the city’s operating budget in 2021. They hoped for $50 million in 2022.
The use of city services
Throughout the pandemic, the city has seen consistent use of services by Calgarians, with growth in several sectors.
Councillors saw slides that showed how the city has maintained a static budget recently.
City manager David Duckworth said it would be difficult to sustain a long-term quality of life for Calgarians at this pace. Even with the signs of improvement in the economy and things like building permit value increases.
“By not keeping up with inflation and population growth is just simply not sustainable for municipalities, without having significant impacts on city services,” he said.
Councillors were shown slides from a recent city survey showing an uptrend in Calgarians’ desire to increases taxes if they saw services increase commensurately.
The chart showed 57 per cent of people in the city supported an increase in taxation with expansion of city services.
Nearly 40 per cent said they would rather cut city services if it meant a reduction in taxes.
Concerns about the current plan
City Manager Duckworth said that continuing with the goal for zero per cent tax rates in 2022 may result in push back from citizens.
“If you look at our metrics compared to other municipalities, we’re going to start hearing increasing pressures from citizens, as well as our service providers, internally for reinvesting in services because there will be impacts to services if we continue on the journey that we’re on,” Duckworth said.
Compared to other cities in Canada, Calgary was one of the few that managed to keep the tax rate at zero per cent during the pandemic. Still, citizens saw substantial year-over-year increases in the years leading up to the pandemic. Calgary Mayor Naheed Nenshi has said Calgary still has the lowest property tax rates for Canadian major cities.
Mayor Nenshi also warned against city council continuing down this zero-increase path.
“I don’t want administration tied so heavily to these targets, so much so that services are impacted,” Nenshi said
Nenshi said slow, incremental increases would prevent a future spike that shocks taxpayers.
City businesses have seen substantial property tax spikes in certain sectors due to the tax shift. The city’s phased tax program (PTP) could also contribute to a bow wave for taxpayers if that program is eliminated.