Calgary

Nenshi says rebates could virtually freeze business property taxes this year

City council will debate a property tax rebate package next Monday which may relieve financial pain for thousands of business property owners facing large tax hikes.

Council to debate rebate tax package next Monday

Calgary is looking at how to fill a hole left in its tax income from growing office vacancies in its downtown core. (Robson Fletcher/CBC)

City council will debate a property tax rebate package next Monday which may relieve financial pain for thousands of business property owners facing large tax hikes.

More than half of business property owners in Calgary are looking at property tax hikes above 10 per cent this year.

Council voted to cut non-residential property taxes for 2019. But the owners of many business properties are seeing increases in their tax bills due to lower property values downtown.

After months of debate over what to do about the ongoing tax burden shift from downtown to business properties outside the core, council seems to have a last-minute solution ahead of the June 28 deadline for tax payment.

All but one of the 15 members of council have signed on to a proposal that would use $70.9 million for rebates to non-residential accounts and ask administration to come up with $60 million in spending reductions this year.

In a news release issued last Thursday, council members also suggested the city should request the provincial government match the $60 million reduction with a cut in the education property tax.

That was rejected out of hand by the provincial government.

Mayor Naheed Nenshi said if council approves the proposal that's now being refined by Coun. Shane Keating, the rebates will result in a virtual tax freeze this year for business property owners.

"We capped at five per cent for the last couple of years. This would actually cap it at more or less zero. It's 0.5 per cent so that's actually very substantial," said Nenshi.

"It'll make a big difference to people."

Farkas sole member of council not supporting proposal

Coun. Jeromy Farkas is the only member of council who has not supported the tax rebate proposal.

He's pitching his own plan, which calls for salary cuts, reductions in council office expenses, taking $50 million from the Opportunity Calgary investment fund and cutting city spending by $35 million.

Farkas said the plan his colleagues are proposing is just a band-aid solution that doesn't structurally reduce city spending.

"What I'm looking for is a long-term solution. Not just a band-aid. We need to look at structural issues and address the core cause of the tax burden that's facing Calgarians, which is overspending."

The mayor acknowledges that a third year of a rebate program is another short-term fix for what is becoming an ongoing problem.

"There is no question that it's a band-aid. I don't deny that," said Nenshi. 

He points out council has rejected larger structural changes which would affect the city's budget for future years but he wants council to revisit that later this year.

Although taxes are due at the end of the month, city officials say a rebate program can still be applied so business property owners won't have to pay the amounts actually showing on their tax bills.

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