Calgary’s increasing commercial tax rate threatens small businesses, says owner
CALGARY — Another small business is sounding the alarm over Calgary’s soaring commercial property tax rates, which a recent study shows have increased 55% in the last four years.
Calgary saw the largest increase in commercial tax rates among 11 major cities for the fourth year in a row, jumping by 13.36% in 2019 (putting the rate to $22.02 per $1,000 of assessment value) according to Altus Group’s 2019 Canadian Property Tax Rate Benchmark Report, which explores property tax rates in major cities across Canada.
Calgary’s oldest independent book store, Owl’s Nest Book Store, will be restructuring in the new year mainly due to rising costs, with the largest being property taxes.
“They’ve quadrupled in our location in the last few years,” said co-owner Susan Hare.
What used to be a $7,000 bill in property taxes has ballooned to over $32,000 in the past few years.
“We can’t sustain this,” said Hare.
Owl’s Nest will be closing half of its store and introducing a sponsorship plan in November to try and save the business, which has been part of the community for over 40 years.
“It’s a huge challenge for small businesses,” said Kyle Fletcher, executive vice-president of the Prairie region for Altus group.
“The biggest driver of that is the shrinking assessment base,” he added, pointing to the rapid decline of downtown office building values which led to a redistribution of taxes to small commercial properties.
“It’s a structural re-apportionment that the city is dealing with.”
City council approved a $131 million rebate program this year to mitigate huge increases in 2019 tax bills for businesses, similar to the $45 million rebate program implemented in the two previous years.
The Altus Group report shows Calgary’s commercial-to-residential tax ratio saw the largest increase in the survey for the second year in a row, with a jump of 8.31% and now sits above the average with a ratio which has trended upward for six consecutive years.
Council is set to discuss next year’s property tax rates at the end of November.
Fletcher said council is indicating a shift to more residential taxes.
“If the average house in Calgary paid an extra $150 in property tax, that would equate to 12.5% on the commercial tax rate.”