Returning $52M surplus could negate Calgary's 2014 tax hike

City council decided to return $52 million in tax surplus to Calgarians next year as they passed the 2014 budget. It could mean homeowners will pay less or roughly the same amount in municipal property taxes next year as this year.

Budget passed with roughly 5% increase, but rebate could even bring a small property tax cut in 2014

City council decided to return $52 million to Calgarians next year as it passed the 2014 budget.

The rebate, which will come off next year’s property tax bill, could mean owners of the average Calgary home will pay less or roughly the same amount in municipal property taxes next year as this year — despite an estimated tax increase of five per cent in the city budget.

The money became available after the city absorbed the unused portion of the provincial education property tax announced in Alberta's budget this year, which then became part of the city's tax base indefinitely going forward.

The additional $52 million went towards flood-related projects in 2013, but it was a controversial debate that spanned over many weeks.

Council decided today in a 12-3 vote to give taxpayers a one-time rebate.

The only members of council opposed were councillors Druh Farrell and Jim Stevenson and Mayor Naheed Nenshi.

Mayor wanted surplus for flood costs

Nenshi agreed with city administrators that the fund should be earmarked for flood mitigation projects, as it was in the current budget year.

"I think that the 2014 money should have been spent on flood, both mitigation and resiliency," said Nenshi.

"We've still got a couple of big resiliency projects that we have to do, including the berm around the zoo, so we're gonna have to find other funding for that."

While the budget has passed, chief financial officer Eric Sawyer says there are still several variables in play that could adjust the property tax rates for next year — including salary negotiations with 2,100 city employees.

The full extent of the tax hike will be finalized in the spring when the province sets the rate for the education portion of the property tax.

$520M earmarked for transitway 

But taxes will go right back up in 2015.

Council voted to use the $52 million in tax surplus from 2015-2024 to fund the Green Line transitway, a notion put forward by Coun. Shane Keating on Monday.

He said the money would kickstart a separate bus-only roadway stretching from the city’s far north to the new hospital in the far south.

The Green Line would be designed so ultimately it could be converted for C-Train use.

The new transit line is expected to cost the city $764 million, but costs would escalate even more once if the LRT conversion happens.

Because the project wasn't the top priority in the 30-year RouteAhead plan set out by the city, it means other transit projects can go ahead in the near future.

CBC city hall reporter Scott Dippel was in council chambers tweeting the budget developments. Follow along in the box below:

With files from CBC's Scott Dippel


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