Calgary’s small business community hit hard by double-digit property tax hike

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Five years after the price of Alberta oil tanked and the provincial economy went into a tailspin, the fallout from waves of layoffs in past years is continuing to reverberate

Ms. Doody and her small business, which teaches digital marketing to entrepreneurs, are among the latest victims of Alberta’s oil crash. More than 8,000 businesses are facing double-digit property tax increases at the end of the month as the city’s tax burden shifts from vacant towers to properties in the ring of gentrifying neighbourhoods surrounding downtown. The value of dozens of gleaming towers in Calgary’s downtown has undergone a crash with little precedent in Canadian history.

“Frustration isn’t the right word. There’s a point of incompetence at this stage,” said Sandip Lalli, the president of the Calgary Chamber of Commerce. No issue has troubled the city’s businesses more during the past half-decade of economic hardship than the sudden hike in tax bills, she said. According to Mr. Nenshi, the city’s total tax take from businesses is going down by three per cent this year. Along with small businesses reporting large tax increases, Mr. Nenshi said some partially vacant downtown buildings are seeing their taxes fall by 75 per cent.“They are outliers, but there are lots of them,” he said of people such as Ms. Doody. “That is why it’s such a problem. There are roughly 8,000 businesses that are looking at an increase of 10 per cent or above this year.

The scale of Calgary’s problem can be seen three kilometres west of Ms. Doody’s business at Fifth Avenue Place downtown. The two-tower complex is an ocean of blue glass and was the headquarters of Imperial Oil until recently. Its market value, and consequently its property tax bill, has plummeted according to data from the city. In the single year before 2019, the municipal assessment for the complex fell by 46 per cent from $429-million to $231-million.

“It’s no secret that Calgary is experiencing an extremely challenging office market that has impacted values for owners across the city," said Daniel O'Donnell, a spokesman for building owner Oxford. He said the vacancy rate at Bow Valley Square is currently 10 per cent below the downtown's average vacancy rate.

 

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