Calgary

Calgary councillors delay finalizing this year's tax hike

City council gathered on Monday to figure out how to head off large property tax hikes for business property owners outside of downtown. It had eight different options on the table.  

More information needed before shifting burden from business to homeowners, council says

Councillors are debating moving the tax burden off downtown businesses and onto residential properties. However, they've put off the decision in order to gather more information. (Devin Heroux/CBC)

Sometimes it seems the best decision on a tough problem is to delay a decision.

Calgary City Council gathered on Monday to figure out how to head off large property tax hikes for business property owners outside of downtown.

It had eight different options on the table.  

And after hours of debate, council voted to wait one more week before deciding which of two scenarios it will use to set 2019's tax rates.

$250M problem

The city has a $250 million problem it's trying to solve.

That's how much less tax money it will take in from downtown property owners as their assessments decline. That load will land on business property owners outside the core.

However, council is looking at options for shifting some of that load onto the half-a-million residential property owners.

Under a new scenario presented by Mayor Naheed Nenshi on Monday, the owner of a median-priced house assessed at $485,000 could end up paying about $120 more in 2019 than last year.

That's a tax hike of 3.45 per cent.

There could be a bigger tax increase under another scenario.

Another option

Coun. Jyoti Gondek suggested transferring more of the tax burden to homeowners so that residential and non-residential accounts each pay half of the city's tax requirements.

Where things get complicated is in deciding who the city chooses to help as the tax burden shifts.

Under Nenshi's proposal, a $70-million grant program will be developed for this year and next year to help businesses still facing large tax increases.

"My point is," he said, "I've got $35 million a year and can we use that $35 million a year to funnel larger grants to people who really need them, rather than spread it across many, many people. That's my goal."

Mayor Naheed Nenshi and city councillors have delayed making a decision on property taxes until next week. (Dave Will/CBC)

Under Gondek's plan, the city would reach into savings to give homeowners rebates to ease their adjustment to higher tax levels.

In each of the past two years, the city spent almost $30 million per year to give business property owners a rebate to limit tax increases to no more than five per cent.

Nenshi makes no apologies for council's decision to delay finalizing this year's tax rate.

"Look, this is a tough decision, and we've kicked it from meeting to meeting to meeting already. Hey, what's one more week?" the mayor said.

Absolutely not, says council

A proposal from Coun. Evan Woolley to cut this year's budget by $100 million was roundly rejected by council.

Woolley said afterwards that without reducing the tax requisition, it's that much tougher to resolve this problem without affecting business property owners.

"The business community will continue to bear the significant burden of that downtown shift and I don't think that that's fair," Woolley said.

"We are unwilling to take a deeper look at our own budgets and move those efficiencies up."

Mailing time nears

He also expressed disappointment that on the day council was supposed to make a decision and set tax rates, it didn't. 

"We're unwilling to make a decision. We've punted this for another week," he said. "We have to get our tax bills out the door."

The city does need some lead time to print tax bills once it sets the mill rates for the year. 

Normally tax bills are mailed out in May with the deadline to pay the taxes owing by the end of June.

Council did decide to delay until later this year on making any changes to tax rates for 2020, 2021 and 2022.

About the Author

Scott Dippel

Politics Reporter

Scott Dippel has been at CBC News for more than two decades across four provinces. His roles have included legislative reporter, news reader, assignment editor and national reporter. When not at Calgary's City Hall, it's still all politics, all the time.

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