The city will provide $45 million from the rainy day fund to cap property taxes at five per cent instead of the 30 per cent some businesses would have faced otherwise.

Council voted 12 to two to support the solution that will come out of the Community Economic Resiliency Fund. It was prompted by the 30 per cent tax hike needed to offset lost taxes from a drop in the assessment of properties downtown.

“Dropping non-residential property values in the core have meant a re-balancing through the city that means even with the property tax freeze, some businesses like this one would have experienced a dramatic increase in their assessment and a dramatic increase in the amount of non-residential property taxes they pay,” said Mayor Naheed Nenshi.

But the break comes too late for one restaurant that closed down recently. The former owner of Nicastros Public House said his business faced many challenges and didn’t need a massive tax hike at the same time.

“I think short-term, it’s great, it’s good to see the city realizing that we have an issue as small business owners, we have issues here with food costs being up, labour, minimum wage going up, now the property taxes,” he said. “My only concern as a business owner is ok, we’ve got this year covered, what’s next year going to look like?”

But the mayor says the plan is only to have the program in place for a year.

"Certainly I'm very comfortable we have the fiscal ability to do this this year, we can't do it every year, but given the difficulties people are facing with the economic downturn this was the right year to do it,” he said. "This doesn't solve the structural problem we’ve got but it certainly helps stem the bleeding. Will this keep small businesses in business that are fundamentally having lots of other problems, it's hard to say. Is it a very, very strong signal that Calgary is open for business and that we hear the concerns and within our limited sphere of accountability, remember we only account for eight cents of every dollar people pay in taxes, but within that eight cents, we are going to do the best possible job with that eight cents and minimize the take as much as we can.”

The Calgary Chamber of Commerce disagrees, saying a longer-term solution is needed.

“The reality is we need to see greater tax reform, we need a model that reduces the massive swings we are seeing this year and balances the distribution between residential and non-residential,” said Adam Legge.

About 6,000 non-residential properties will benefit from the tax cap program, and no application is required.