Calgary's businesses given another tax reprieve
Councillors approved another $45 million for businesses to help with whopping tax bills as economy recovers
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Once again, Calgary's small businesses will be shielded from an astronomical non-residential property tax increase as councillors passed a motion to spend $45 million and again cap hikes at 5 per cent.
On Thursday, Mayor Naheed Nenshi offered some of his colleagues a deja-vu pitch. For the second time, he pitched cash for businesses to help soften the burden of wacky economic tax shifts as the city continues to grapple with a hollowed out downtown.
"It's the right thing to do," said Nenshi.
The motion passed and that cash will flow from the Fiscal Stability Reserve to businesses – but his Worship has said it's not a permanent solution, even though it's the second time council has used that same fix.
In January, councillors approved a similar fix after weeks of deliberations to figure out how they could help business owners who would otherwise be facing at least a 30 per cent tax increase due to lowered values in the downtown.
But Coun. Evan Woolley said the city's fix didn't quite cut the taps for drowning businesses.
"Council approved $45 million of this in January, but only $15 million of this has gone out the door," said Wooley. "We have no way of knowing whether the benefit has actually flowed through to tenants, they're not compelled to flow that through."
Nenshi said what the city's really seeing is that most businesses have a triple net value lease where the property tax value gets handed on. He said two-thirds of the $45 million is going to large landlords that own shopping malls and other big properties. They're in the appeal process, but once that process is done, cash will flow to tenants. The small businesses have already received their cash injection.
Coun. Gian-Carlo Carra defended the rebate, telling his colleagues it was the best program they could come up with when faced with all the legalities of attempting to help out businesses that needed a boost when facing the shift in non-residential taxes.
"We looked at this problem six ways to Sunday," said Carra. "To categorize this program as a failure is hyperbole."