Calgary council votes against property tax boost, but homeowners face increase in tax shift

CALGARY (660 NEWS) — As budget discussions come to an end at Calgary City Hall on Friday, councillors have rejected the idea of a property tax increase.

But homeowners will still be paying more as councillors adjusted what has long been described as a structural problem.

To reduce a burden on businesses, a tax shift was approved so homeowners pay more starting in 2020.

Before Friday’s decision, the split between non-residential and residential property taxes was 51 per cent to 49 per cent but the change approved by a vote of 10-5 shifted it to 52 per cent for residential and 48 per cent for non-residential.

Councillors Peter Demong, Sean Chu, Joe Magliocca, George Chahal, and Jeromy Farkas voted against the plan.

This means homeowners will face a tax increase of more than seven per cent but many businesses will face a significant decrease in taxes.

Some councillors noted this may be a tough pill to swallow for homeowners, but it means businesses will not be struggling to pay their bills.

“We have to make this move now,” said Ward 8 Councillor Evan Woolley. “We will have businesses banging on our door in January if we don’t do this.”

“We have to be nimble, we have to be proactive and we have to be open to all options,” said Ward 6 Councillor Jeff Davison. “The percentage is likely going to seem large to homeowners, but I think the thing to remember here is that it’s the dollar value you should be thinking about. For about $130 a year, we keep those businesses open. The businesses that we value and ultimately love to have in our neighbourhoods.”

Also, others noted that tax reform from the province is still needed.

“And smooth out some of these extremes,” said Ward 5 Councillor George Chahal.

“Since I’ve arrived here, for the 19 or 20 years with Mayor Duerr and Bronconnier,” added Ward 13 Councillor Dianne Colley-Urquhart. “We’ve been dealing with asking for tax reform under the municipal government act for a long, long time. And even through the whole city charter business, we’ve been asking for a long, long time this haven’t been working for us. What we’re left with is solving the problem ourselves.”

Mayor Naheed Nenshi noted that he could approve this budget plan, as they still maintained services for vulnerable Calgarians and can help protect businesses at the same time.

Ward 3 Councillor Jyoti Gondek said they have been stuck in a tough position, and there was a nasty narrative going around about certain property classes paying more than others.

“I am not looking to whack homeowners at all,” she said.

Ward 1 Councillor Ward Sutherland noted a similar issue in talking to Calgarians.

“Not one single one of them understood what non-residential tax meant. When I explained to them, by the way, where you’re standing right now in your house you pay $1,000. If a business shows up, it’s $4,200,” he said. “And they went ‘what? That’s crazy!’ Every single person agreed it was crazy and I said well, it’s not fair. Are you willing to take some of that responsibility and shift it over so that they don’t go under? Every single person, once you explained it, was willing to take some of the burden.”

Earlier, a proposal from Gondek and Colley-Urquhart passed by a slim margin, to effectively freeze property taxes for 2020 and maintain some other services.

It included a series of amendments, including restoring 42,500 hours of transit service and prevent an increase in cost to the low-income transit pass, along with finding $24 million in one-time money to eliminate the need for a 1.5 per cent property tax increase.

Gondek said this essentially includes the service levels of a 1.5 per cent tax increase scenario, but due to the extra money found, it will be able to freeze the tax level.

Then, in a vote at around 4:30 p.m., council voted 8-7 to approve the budget adjustments and the city’s budget is finalized.

However, it’s not quite as simple, as there still will likely be a slight increase on Calgarians’ tax bills in 2020 anyway.

This will be due to the fact the city needs to make up $13 million in changed funding from the province, and there will also be a slight hike in order to account for a tax shift, so residential and non-residential rates come closer to a 50-50 split.

Also, if council cannot find that $24 million in savings for 2021, then property taxes will increase by 1.5 per cent anyway.

In addition, this plan still includes the need to cut 138 jobs from the City of Calgary.

The amendments were voted on separately, with the prevention of an increase to the low-income transit pass passing by a vote of 9-6.

Councillors Sean Chu, Joe Magliocca, Shane Keating, Peter Demong, Jeff Davison and Ward Sutherland voted in favour of raising the pass price.

But on the amendment to take $24 million from other funds and use it to prevent a tax increase, it first failed by a vote of 10-5 — meaning it set the stage for an increase.

It took two more votes before all of the amendments were passed, and eventually, a zero per cent increase on the base budget was secured.