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Increase to Calgary residential property tax share up for debate

A one per cent shift in the city tax distribution would mean roughly $4 per month for a typical single-family homeowner in Calgary.

Calgary single-family homeowners could be on the hook for a little extra property tax, pending the outcome of a debate next week at city council.

On the table is the city’s tax distribution formula, which determines the ratio of property tax shouldered by either residential and non-residential properties. Currently, the city is at a 52 per cent residential, 48 per cent non-residential tax distribution. 

During the recent four-year budget deliberations, Calgary Chamber of Commerce CEO Deborah Yedlin said they’d like it to shift even further towards homeowners.  She said in November 2022, that an additional one per cent shift would cost a Calgary homeowner $46 annually, but save a local business (valued at roughly $5 million) about $2,000 annually.

They’d ultimately like it at 60 residential and 40 per cent non-residential, Yedlin said.

Council will be presented with three options: Status quo, bumping up residential share to 53 per cent, or bumping it up to 54 per cent. According to the city, a one per cent change in tax share responsibility transfers roughly $21.7 million to residential properties. That could tack on either $0, $4 or $8 per month for a typical single-family homeowner, depending on the scenario.

Calgary taxpayers are already on the hook for roughly $10 a month more in 2023.

City administration said that depending on the amount of the provincial tax requisition for 2023, they may be able to provide one-time inflationary relief to offset the change.

Ward 5 Coun. Raj Dhaliwal said there are two competing forces, each with their own interests in mind.  He’d like to see the status quo stay in place for this year. There are a lot of unknowns in the economy, Dhaliwal said.

“I’m kind of leaning towards keeping the status quo… and let’s see where the chips fall, so we have a clearer picture,” he said.  

“We will have a new government – whoever forms the government will have a budget at our disposal. We will see where our economy lands probably after summer.”

Low taxes, high level of service, said Carra

Ward 9 Coun. Gian-Carlo Carra said Calgary has relied too heavily on the non-residential tax base to fund residential services for years. Further, due to the plummeting property values of downtown real estate, the correlative impact on small- and medium-sized businesses has been exponential.

“I am absolutely supportive of spreading the wealth or spreading the responsibility more onto the residential side,” he said.  

“It’s just fundamentally the right thing to do.”

Carra said there’s never a right time to pay more for the services a citizen receives. Still, he feels it has to happen.  There are small and medium businesses out there where this relief would make a big difference, he said.

“We absolutely have to share that responsibility across the entire base. We can’t hit our small businesses,” Carra said.

Ward 13 Coun. Dan McLean said he won’t support a heavier burden on Calgary homeowners. He does recognize, however, Calgary’s non-residential tax regime makes Calgary less attractive to business owners.

His solution is to lower city spending.

“This is where spending restraints, tax relief, that’s how we will achieve relief for businesses. Not to shift it over to the residential,” he said.

Calgary city council’s decision will influence the final property tax bills, which are expected to be mailed on May 25 and 26.