A new report confirms what small business owners in Calgary have been concerned about.
A study by the Canadian Federation of Independent Business, released on Tuesday, found that Calgary tops the list of most unfair property tax systems for business in the province. Businesses pay over four times more property tax than residents on the same value of property.
The CFIB’s annual Property Tax Gap Report analyzes the tax treatment of residential and commercial properties by municipal governments across Alberta, including trend lines from 2009 to 2018.
The report has a special focus on the 20 largest municipalities and defines the “property tax gap” as the differential between commercial and residential property tax mill rates, said the CFIB.
“Out of the top 20, Calgary continues to have the biggest gap of any city in the province, now estimated to be 4.14. That means owners of commercial property pay more than four times more property tax than residential property owners, based on the same assessed value of property. Edmonton’s gap is second worst at 2.82,” said the report.
“Too many city governments continue to depend on squeezing more and more property taxes from local businesses to pay for their ever-expanding operating budgets. This a risky and unfair strategy, as exposed by the recent situation in Calgary. In the midst of a struggling economy, assessed values for downtown commercial office space have plummeted, leaving small and medium-sized businesses outside the core expected to somehow pick up the tab. Talk about a tough pill to swallow,” said Richard Truscott, CFIB vice-president for Alberta and B.C., in a statement.
CFIB said consultants working with the City of Calgary are holding roundtable sessions with local business owners this week to discuss short-term mitigation, as well as longer-term solutions.
The CFIB recommends the following:
- introduce and implement a policy that reduces the commercial to residential tax gap over time to an absolute maximum ratio of two to one;
- use restraint in municipal operating spending to help bring down the ratio;
- Eliminate any additional business taxes.
– Mario Toneguzzi for Calgary’s Business
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