The City of Calgary is proposing a decrease to the property tax rate for 2021 while cutting its budget by more than $90 million dollars, as it deals with the impact of an ongoing economic downturn and COVID-19.

The City of Calgary’s chief financial officer, presented the mid-cycle adjustments to the One Calgary Service Plans and Budgets report Monday to council.

“We believe this budget supports citizens during this prolonged downturn and with COVID-19,” said Carla Male, Chief Financial Officer. “We have seen the demand for our services continue to rise and so we have prepared mid-cycle adjustments keeping the citizen at the centre of everything that we do.”

The city is proposing the average residential property tax rate would decrease 0.67 per cent. The city’s four-year budget approved in 2018 called for a tax rate increase of 3.23 per cent in 2021.

“From a dollars and cents point of view, the typical single family homeowner will see a 0 per cent change in their taxes year over year,” said Male.

“I was pleased when council suggested a tax freeze or better and I was very pleased to see what was being able to be accomplished,” said Naheed Nenshi, Calgary Mayor.

According to the proposed changes, the average non-residential property tax rate would decrease 0.55 per cent, but most businesses will see a significant increase.

Double digit increases for some businesses

Some retail businesses and warehouses could see increases in the double digits.

“The reason the warehouses are seeing a huge increase is people are online shopping so there’s a lot of demand for warehouses,” said Nenshi. “As much as I hate saying it, I think we’re going to look at some sort of a rebate for those businesses in this year ‘cause you don’t want to just pile on with what a difficult year they’ve had but at some point we actually have to let the market work.”

The city will be looking for ways to cut the 2021 budget by $90 million, including some cuts to funding that would have gone to the police budget or transit. 162 full-time equivalent positions with the city could also be eliminated.

Proposed adjustments include $26 million identified by the Solutions for Achieving Value and Excellent (SAVE) program, which was directed by council to find ways to find ways to reduce costs.

According to the city, some savings will replace a one-time rebate for 2021 previously directed by council with permanent reductions.

“If we didn't have that money we wouldn't be talking the we way we’re talking, we couldn't do any reduction, in fact there would be significant problems,” said Ward Sutherland, Ward 1 Councillor.

Maintaining service

The city is trying to maintain service levels, which is challenging in a growing city. Calgary is receiving some federal and provincial funding to help cover revenue shortfalls.

Ward 11 Councillor Jeremy Farkas doesn’t believe the proposed changes are aggressive enough, but he is arguing against cuts to emergency workers.

“I think we have to the find money elsewhere in the budget that the tax relief is sustainable and its long term,” said Farkas.

“It is an election year so it isn’t surprising that council could come in with a hail-Mary tax freeze on the typical home owner but its coming on the backs of first responders on certain industrial areas that we need to be cultivating right now.”

The proposed changes have not been approved. Calgarians are able to provide feedback to the city until Nov. 23 when council will debate and vote the proposal.

More information can be found online at City of Calgary Mid-Cycle Adjustments.