Calgary’s business community is gearing up for steep property tax increases, as the newly unveiled provincial budget outlines plans that will see the city’s education property tax requisition rise to a staggering $1.2 billion—an uptick of $200 million from the previous year. With the provincial government projecting total education property tax revenues of $3.6 billion by 2026, local businesses are bracing for the financial impact, which could lead to an additional $3,000 on average in taxes for commercial properties.
The Budget Breakdown
The provincial budget’s implications are particularly stark for the average non-residential property owner in Calgary, who is expected to face an extra cost of £1,816 this year. This figure compounds with the Calgary city council’s own 1.6% property tax increase, resulting in a potential financial burden that could weigh heavily on local businesses already navigating a challenging economic landscape.
Arlen Smith, the operating partner of the Palomino Smokehouse in downtown Calgary, expressed deep concerns about the ramifications of these increases. “It’s terrifying with the cost of everything else right now,” he remarked, highlighting the precarious position many local businesses find themselves in. “We have to at least break even. I’d love to run a deficit, but that’s not in the cards for us.”
Political Response and Criticism
The budget has drawn sharp criticism from the Alberta Opposition NDP, with leader Naheed Nenshi labelling it as a catalyst for increased living costs. During a press conference held at the Palomino, he voiced his frustrations over the rising education property tax, which has surged by 58.6% over the last four provincial budgets. Nenshi pointed out that while Calgary’s requisition stands at $1.2 billion, Edmonton’s is significantly lower at $639 million for the same period, raising questions about the province’s tax distribution strategies.
He accused the provincial government of mismanaging record oil revenues, leading to a projected $9.4 billion deficit. “They were hoping that people would blame the mayor and city council,” Nenshi remarked, “but the mayor is doing a great job of ensuring people know exactly who’s behind that tax increase.”
Government Justification
In defence of the budget, Premier Danielle Smith stated that the increase in education property tax was necessary to accommodate the growth pressures facing Calgary’s education system. “We heard from ratepayers in Calgary that they wanted us to keep up with growth,” she maintained, noting that 40% of the pressures on the education system stem from the city’s expansion.
Smith emphasised that it would be “unaffordable” for taxpayers to cover the full operating costs of education. She highlighted that the two major school boards in Calgary will receive $2.24 billion in funding for the coming school year.
While the budget includes initiatives aimed at supporting local businesses, such as dual credit programmes for apprenticeships, the Canadian Federation of Independent Business (CFIB) has expressed concerns about the financial strains imposed by the tax increases.
Seeking Solutions for Small Businesses
The CFIB’s Alberta director, Keyli Loeppky, has called on both municipal and provincial governments to consider implementing a new property subclass for small businesses. “You could tax small businesses at a lower rate and provide some relief that way,” she suggested, emphasising the need for policies that alleviate the burden on local enterprises.
As Calgary city council prepares to finalise property tax rates in the coming spring, property owners can expect to receive their tax bills in May. The decisions made in the coming months will be pivotal for the city’s businesses as they navigate this challenging fiscal environment.
Why it Matters
The impending increases in property taxes are not merely figures on a balance sheet; they represent a significant hurdle for Calgary’s business community, which is already grappling with rising operational costs. With small businesses often serving as the backbone of the local economy, the financial strain from these tax hikes could lead to tougher market conditions, potentially stifling growth and innovation. As stakeholders seek solutions, the discussions surrounding these tax policies will undoubtedly shape the future of Calgary’s economic landscape.
