City hall must fix structural problem with the property tax system
July 22, 2019
Over the past few years the Chamber has worked with City Council and administration to find solutions to address the ongoing property issue facing our city.
This work includes the recommendation to cap business property taxes at 5 per cent in 2017 to provide short term relief. Unfortunately, this program wasn’t designed to be used over multiple years and became less effective each year as the underlying tax increases were built in to the portion that was being capped.
What we really needed to see, and what the Chamber has been asking Council to do since the 2017 election, is a long-term structural adjustment to the property tax system. Along with this adjustment to the tax system there also needs to be a course change at City Hall to bring a needed focus to driving efficiencies and reducing costs.
The Calgary Chamber has supported a multi-faceted approach that combines short, medium, and long-term strategies to address the structural issues with property tax system in our city. The three approaches that we believe the City should consider are:
- Reduce the non-residential to residential tax ratio to 3:1 by the end the current council’s term in 2021 and committing to a long-term fixed ratio of 2.8:1 by 2023.
- This must be done in conjunction with other measures to build trust that the city is operating efficiently.
- Reduce the cost and increase the effectiveness of local government.
- While we appreciate the City making low-impact budget cuts, long term efficiencies must remain a focus. This could include: privatizing services, hiring lower cost consultants, and increase operational effectiveness of administration departments.
- Sale of city-owned land.
- Selling non-revenue generating land will increase the tax base for the City, as it does not collect property taxes from itself, while increasing interim revenues that can be applied to tax relief.
Tackling the property tax issue in our city will need a focused effort using multiple levers. The Calgary Chamber appreciates that the City has been listening to the concerns of the business community. This is a problem that does not have an easy solution, and we need the City and the business community to continue working collaboratively to resolve it going forward.
We have seen this course change at the provincial level with recently announced cuts to corporate taxes, a reduction in labour costs imposed on businesses, and changes announced in Bill 7 on June 4, which gives municipalities more tools to help attract business. We need the City to follow the province’s lead and start to make it easier to operate a business in Calgary.
For more information on the Chamber’s perspective on this problem, and what solutions are needed, read an recent opinion piece published in the Calgary Herald on June 4, 2019, or a blog post published on April 15, 2019.