Property Tax Equity

Property Tax Equity

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The greatest source of revenue for any municipality comes from its ability to collect property taxes from businesses and residents. In 2012, The City of Calgary collected approximately $563 million in residential property taxes and approximately $793 million in non-residential property taxes including business property tax, totaling $1.35 billion in tax revenue.

However, while Calgary has historically had one of the lowest residential property tax rates in Canada, the city’s tax advantage to other Canadian municipalities becomes less apparent when non-residential and business property taxes are factored in.  Notably, businesses pay approximately five times the property tax of residents and account for almost 59% of total property tax revenues collected by The City.

This raises the issue that many businesses pay a much larger share of municipal services, but do not receive many of the services they pay for.  Consequently, businesses find it harder to stay open, may move to municipalities with more favorable tax configurations, and customers may end up paying more for services, hurting the competitive advantage of all Calgarians. Taxes are important to ensuring that Calgary provides public services to the city, but businesses should not have to disproportionately shoulder the burden. Moreover, it is important that citizens understand the true cost of what they’re paying for.

In April 2012 City Council approved a plan by City Administration to consolidate the current business property tax into the non-residential property tax by 2019,  creating administrative savings for The City, simplifying property tax assessments for businesses and creating tax savings for many businesses. However, the tax split still generates a higher burden on the non-residential tax base.

In order to keep Calgary competitive, we need to continue to strive toward achieving greater equity between the non-residential and residential tax base.

As a result, the Calgary Chamber recommends that The City of Calgary:

  • Recalculate property tax rates so that the burden is not disproportionately borne by businesses and Calgary remains a competitive place to do business.
  • Ensure the tax shift that is revenue neutral, so that no additional taxes or costs are levied on citizens.
  • Implement user fees, where appropriate, so that businesses are not paying for services that they do not use or benefit from.
  • Clearly communicate tax burdens to residents and businesses and exactly where residential and non-residential tax dollars are going.

Download our full Great Calgary 2013 policy book

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