Calgary’s business community unpacking city’s proposed 4-year budget
Many Calgary businesses are waiting to learn how the city’s proposed four-year budget will impact their bottom line, as council prepares for deliberations later this month.
Several types of businesses in the city could see a property taxes increase next year, but how much more individual business owners will pay will be determined by their assessed property values.
According to John Papavacilopoulos, who owns and operates Oak and Vine Inglewood, it comes after a challenging two years of increased costs and labour challenges.
“Anytime there’s additional taxes or levies that are added on top of it, as a small business it’s difficult for us to pass it along to customers,” Papavacilopoulos told Global News.
Preliminary budget documents show a strip mall valued at $4.79 million could see an increase of 9.7 per cent on the municipal portion of its tax bill, while a neighbourhood shopping centre valued at $17.9 million would likely see a yearly increase of 14.32 per cent, or an additional $46,000.
Meanwhile, a retail business on 17 Avenue SW valued at $2.1 million in 2022 could potentially see an increase of nearly $2,000, or 5.2 per cent next year.
The preliminary budget numbers also show a non-residential building valued at $5 million would see a municipal tax increase of $4,092, or 4.58 per cent, next year.
According to those figures, property values of downtown AA class office space are also slowing rising; projected to rise nearly 13 per cent next year.
David Wallach with Barclay Street Real Estate told Global News it’s a positive signal with more diversified activity in the downtown core.
“We’re seeing a mix of users, which is perfect for the long term,” Wallach told Global News. “One of the things we didn’t have before the crash was diversity.”
Although the rise in value means more property tax revenue for the city, which could “ease and balance the burden” on businesses outside the downtown core, Wallach said it’s not an overnight fix and the recovery will still take time.
Calgary Mayor Jyoti Gondek said city council has some “tough decisions” ahead during deliberations, with the potential for a discussion on the distribution of property taxes across the city.
“We have non-residential properties contributing a considerable amount more than residential properties,” Gondek said on Tuesday following the presentation of the proposed budget to council.
Residential properties carry 52 per cent of the property tax distribution, with 48 per cent carried by non-residential properties.
However, Gondek said non-residential properties are taxed with a higher rate, adding that the proposal for next year would see those properties pay more than four times more in taxes than residential properties.
City council can shift the tax burden off businesses, but that would mean homes would need to take on more of the load.
“We’re going to have to balance the interest of the business community, we’re going to have to think of what that means in terms of investment and economic growth, and we’re going to have to think about what it means for residential homeowners,” Gondek said.
Calgary’s Chamber of Commerce is hoping there will be discussions about shifting the property tax ratio, but CEO Deborah Yedlin said it will be challenging in the current economic environment.
“It’ll be tough to find the adjustments we’re hoping for, given the inflationary environment and the challenges that we’re facing from a broader context,” Yedlin told Global News.
“Let’s make sure that they are set up for success, and that we can think about how we rebalance that tax burden so that we can continue to grow and attract people and opportunities.”
Yedlin added the chamber is encouraged by several priorities in the proposed budget, including investments in public safety, infrastructure, transit and downtown revitalization.
“We really want to make sure that some of the initiatives that are in place in this budget don’t get taken off the table,” Yedlin said. “That’s something that we be watching very carefully.”
City council will begin budget deliberations on Nov. 21.
by Global News
