This Week at Council: COVID-19 Relief, Tax Shift and Budget 2020

April 07, 2020

Immediate Tax Relief for Citizens and Businesses

The City is allowing taxpayers on a monthly and lump-sum payment plan to delay their tax payments if they are experiencing financial hardship from June 30, 2020, to September 30, 2020 penalty-free.

We are also encouraging lump sum ratepayers to join Tax Instalment Payment Plan (TIPP) in order to spread tax payment throughout the year and have enabled ratepayers who are on the City TIPP plan, to cancel their monthly payments within 2020 and rejoin by end of year without incurring fees.

The tax payment deadline has been extended from June 30 to September 30 without late payment penalties and TIPP has suspended its 2 percent filing fee for taxpayers who join TIPP after January 1, which has been suspended until January 1, 2021. You can read more about it here: https://newsroom.calgary.ca/council-approves-new-relief-measures-to-support-citizens-and-businesses/

 

How To Access The Payment Delay Program

No action is required by property owners to benefit from the payment delay if they are paying a lump sum. Those property owners on TIPP can contact 311 or access the following link to request cancellation of the TIPP program: https://www.calgary.ca/cfod/finance/Pages/Property-Tax/Tax-Instalment-Payment-Plan-TIPP/TIPP-Cancel-TIPP.aspx

It is important to remember that bills will be sent out as usual and any property owner who pays their property tax account in full on or before 2020 September 30 will not incur a late payment penalty. As of now, penalties will be charged on any property tax balances that remain outstanding on 2020 October 1.

Budget 2020

As you may recall, last November I voted against the budget. This came after many of my proposals to reduce the City’s operating budget were rejected. I believe that City Council should have held the line at zero – instead, a majority voted to increase the operating budget.

Before budget, I also called for a voluntary pay freeze for most unions as the City had no other authority to use during contract negotiations. However, by Council passing an increase to the budget, it cost us our negotiations with these unions, costing the City an additional $34 Million increase to our operating budget.

Prior to budget, I also proposed several private sector partnerships and sustainable models to decrease our reliance on one-time funding. These ideas were also rejected during budget deliberation, despite being passed at the committee level, costing taxpayers an additional $7 Million increase to the operational budget.

While I wholeheartedly disagree with these actions by City Council, during this time of unprecedented crisis, I must rationalize with my fellow Councillors and work together with them to move our City forward.

I wrote a blog post about my budget decisions in November 2019, which you can read here: https://www.jeffdavisonyyc.com/blog/2019/12/3/2020-budget-how-i-voted

Business to Residential Tax Shift

Yesterday, my vote confirmed my support of the business-to-residential tax shift.

As you may recall, due to the collapse of downtown office valuations, businesses outside the core were given the lion’s share of the tax burden. This proved to be unsustainable and required an immediate, long-term solution. Therefore, Council voted to shift the way we take taxes to 48 percent from non-residential, and 52 percent from residential.

While the percentage will seem large, the dollar value is what we must remember - for an average of $11 per month, we can keep the businesses we value open, and keep Calgarians employed. At the same time, this allows for an 11.24 percent reduction to business taxes which was desperately needed during this time of economic crisis.

We all love to take our kids to their favourite play place, music or ice cream store. We love to eat at local restaurants. We love our local shops and pubs. We love the businesses near and dear to us that make our lives better every day. I bet you can think of at least one local store where you will do some holiday shopping. But, we have to understand that our current assessment process is broken, and the stores we love are closing in record numbers.

Businesses have been subsidizing the cost of services that all citizens enjoy. These same businesses employ thousands of Calgarians. A long term fix was necessary: previous council decisions have forced our hand as they band-aided this issue with a “one-time” capital solution every year that did not address the core issue and was ultimately unsustainable. Remember that almost $100 million over the past five years has been used as a band-aid solution – that is money we will never see back.

We must also remember that business owners in Calgary are residents who pay property tax on their homes. When all things are taken into account, small business owners are the largest employers of our citizens. Those employed by small businesses also pay property tax. Although the tax shift decision was difficult, we cannot allow businesses to suffer disproportionately – especially in this new COVID-19 environment.

The tax-shift discussion is precisely why I’ve advocated for tax assessment reform. The tax assessment system is established by the Province of Alberta, as the City of Calgary is a creature of provincial legislation. For there to be meaningful reform, we need assistance from our partners in the Province to change the system.

I wrote a Notice of Motion on this very issue, which had the support of a majority of Council. You can read about it here: https://www.jeffdavisonyyc.com/blog/2020/1/26/news-release-city-of-calgary-councillors-call-on-province-to-form-task-force-on-property-tax-assessment-reform

As a result of this shift, the average City portion of the property tax increase is $130 for the year. I also remind you, the Province of Alberta takes about 38 percent of your property taxes. I’ll allow our local MLAs to answer for they are providing property tax relief at this time which is not a cancellation, but a deferral of a significant increase to Calgary taxpayers.

On Difficult Decisions in the Future

In light of COVID-19, the City needs to do more – and we will. Yesterday’s vote to provide relief, and to confirm the tax shift was the first step.

75 percent of the City’s budget is police, fire, transit, and roads. Since my time at Council, the City of Calgary has reduced and deferred its operating budget by over $500 Million using a smart spending approach – an approach I campaigned on.

Unlike the Province of Alberta and the Government of Canada, the City of Calgary is legally unable to run a deficit. If you demand substantive cuts, know that it will include police, fire, transit and roads.

Since my time at Council, I have focused on smart spending that drives our local economy and jobs. This is why I continue to support the Opportunity Calgary Investment Fund (OCIF), the $100 Million tool that is being used to attract and retain jobs to Calgary. Since 2017, Since its inception, OCIF has created 988 jobs, with another 640 coming quickly. Out of the $250,000 spent to date – we have leveraged $163.5 Million in total project investment with a funding commitment of $23.5 Million. This is a great example of how the City is working with the private sector to capitalize on opportunities that benefit all Calgarians. Some disagree calling this corporate welfare, but it is one of the only tools we have to ensure we can compete better against other municipalities fighting to take jobs away from us.

The above example is also why I supported the Event Centre and the Entertainment and Cultural District. Yes, the City investment is $290 Million in capital dollars, but the potential economic uplift of the district is valued at over $1.4 Billion per year, and when coupled with the BMO Convention Centre upgrades, it will create 3,000 - 4,000 jobs in Calgary at a time when we desperately need employment opportunities.

Our City’s survival requires strategic thinking and a plan to get us moving forward again. I can assure you this – I am constantly thinking about the bigger picture and the opportunities we need to create for the next generation of Calgarians – our kids. While it is easy to distract people with cheap media headlines rooted in hateful messaging – now more than ever, the facts matter. Now more than ever, we must come together as Calgarians and collaborate to find solutions with three words in mind; survive, recover, resiliency.

As citizens, we must do better to educate ourselves before we allow reactive opinion to take over – it is toxic and completely unproductive. We are a capable and highly educated City of over 1.2 million people. We have been known to the world as many things, a Cowtown, an oil town – even a town of entrepreneurs – but more than anything, we have been known as a town of resiliency. And there is no time in our history when it has been more important to remember that.

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