Thursday, July 2, 2020 / by Sergey Korostensky
Council asked and an independent task force has delivered.
Last year, council created a financial task force to help it come up with ways to boost Calgary's economy and to give it new revenue options.
The panel's 35 recommendations cover a wide range of ideas. But some members of council are focused on suggestions of new tax powers.
While some see the possibilities for reducing the city's reliance on property taxes as a way of raising revenues, other council members fear Calgarians would just pay more money.
In the past, economic downturns in Calgary were generally short lived but the city's economy has been buffeted by a series of shocks since 2014.
Council has spent more than $200 million in tax rebates to help business property owners cope with the crash in downtown property assessments due to high vacancies.
Last year, council voted to shift some of the business property tax load to residential accounts.
So despite a tax freeze this year, that shift resulted in a 7.5 per cent tax hike for homeowners.
Recommendations from task force
The financial task force has suggested things like multi-year assessments or multi-year assessment averaging as a way of smoothing out the vagaries of the Calgary real estate market.
The panel also suggested a range of new tax measures as a way of opening up new revenue streams for the city.
They include such things as a billboard tax, taxes on home-based businesses or on e-commerce ventures which don't have brick and mortar operations in the city.
However, Mayor Naheed Nenshi points out the menu of taxes would all require the province to enact new laws that would give municipalities the power to levy such taxes before it could pick and choose from the list.
"This really is a plea to the Government of Alberta to say: let's modernize how cities work and get rid of our reliance on the feudal property tax," said Nenshi.
The task force points out that the City of Calgary gets 50.1 per cent of the revenues for its operating budget from property taxes.
User fees for the sale of city goods and services like water and sewer utilities are the next biggest source of revenues at 31.7 per cent.
Some oppose any new taxes
Coun. Jeromy Farkas said he couldn't support any new taxes from the city at this time.
"I think as we emerge from COVID-19 and the global recession and we work to compete on the world stage, we need fewer taxes not more," said Farkas.
"Calgarians need these new taxes like they need a hole in the head."
But Nenshi was quick to respond to his colleagues who aren't keen on any new taxes.
"I've said it before and I'll say it over and over and over again. Any dollar we get in new revenue sources, we will spend a dollar less from property taxes and we need to reduce our reliance on the unfair property tax," said Nenshi.
City council voted to accept the recommendations of the task force and to have the city manager report back to council twice a year on potential implementation.
It also wants administration to provide a costing of the recommendations should council decide to proceed with changes.
No new taxes can go ahead unless the province gives municipalities the powers.