Calgary

Calgary approves $15M to help struggling businesses — it's just not sure how to do it

The city is looking at ways to ease the tax crunch on some Calgary businesses next year and has set aside $15 million in order to do it. The only problem: council isn't sure exactly what to do with the money.

Restrictions in the Municipal Government Act, mean city council will have to get creative in delivering funds

Mayor Naheed Nenshi says the city is constrained in how it can help struggling businesses, but it's setting aside $15 million to do so. (CBC)

The city is looking at ways to ease the tax crunch on some Calgary businesses next year and has set aside $15 million in order to do it. The only problem: council isn't sure exactly what to do with the money.  

"We are really, really, really constrained under the Municipal Government Act (MGA) around how we treat businesses," said Mayor Naheed Nenshi.

The MGA, which lays out the roles and responsibilities of the city under the purview of the provincial government, means the city is lacking the authority to get creative.

"This is why we had to go in camera to have a very big legal discussion around what our degrees of freedom are, because, for example, we don't have the ability to really offer a tax rebate to one group and not another group, and that's where life starts to get very, very complicated."

Nenshi used the opportunity to once again mention how important it is for the city and the province to conclude negotiations on a city charter for Calgary, which would give the municipal government expanded powers and freedom. 

$15-million question

The money was pulled from one of the city's reserve funds in order to offer some sort of tax relief, as businesses in the suburbs are expected to see increases to make up for a hollowed-out downtown.

Council has yet to decide exactly what it can and will do, aside from a vague promise of help. Vagueness could also describe the $15-million figure.

"At some point you've just got to put a stick in the ground and that number was one that we felt could really assist," said Nenshi.

"It's also a number that the city is comfortable with. You know, this is a year where we're really pulling out a lot from our rainy day fund, so we were comfortable pulling out another 15, but we want to make sure we're ready in case there's still problems next year that we need to address as well."

Short-term

Amber Ruddy, with the Canadian Federation of Independent Business, said she's mostly pleased with the city's decision.

"It's a positive measure to have the city look at ways to help businesses in this down economy," she said.

"What I'm concerned about is this is a short-term fix, this is a one-year fix to get us through the election period, and then what are we left with after that?"

Council voted unanimously to approve using reserve funds to help businesses.

With files from Scott Dippel

now