Calgary’s mayor, Jyoti Gondek, just had her worst month since being elected two years ago. It was not just her tone-deaf handling of the lighting of a menorah. It was also her failure to control Calgary’s budget, which has resulted in eye-popping property-tax hikes for next year. All this happened to a mayor with Biden-like approval ratings near 35 per cent — before this past month.
Mayor Gondek has stumbled along since Day 1. Setting the “climate change crisis” as her top priority when she became mayor, it seemed to escape her notice that Calgary’s biggest issue was a collapse in the tax base that would leave a deep hole in the city’s finances. Assessments on non-residential property dropped 16 per cent from 2018 to 2022. With many commercial buildings standing empty, especially downtown, the city no longer has a cash cow to fund its services.
But not even that glaring oversight compares with her decisions this past month. Calgary’s budget is in a shambles, with a 7.8 per cent increase in residential property taxes coming next year, likely twice the rate of inflation. In fairness, the increase is partly due to the mayor’s and city council’s sensible decision to shift more of the burden from non-residential to residential payers. The non-residential rate is 3.8 times the residential rate and many businesses can’t cope. A $10-million property incurs $220,000 in taxes, which is almost half the $500,000 profit it would earn with a typical five per cent return.
Even despite the switchover, however, non-residential property owners still face an increase of 3.8 per cent in property taxes in 2024. The fundamental fiscal problem is Calgary’s inability to control spending, which is expected to rise another 7.4 per cent in 2024
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