Funding Municipal Services: Who Should Pay?

If you read the Calgary Herald today you may have seen a story on non-residential property tax featuring comments from BOMA’s President & CSO. The City is considering changes that would lower the amount of tax non-residential properties pay relative to residential properties. According to the Canadian Federation of Independent Business, non-residential properties pay a tax rate five times higher than residential properties. The result is that over the past five years, non-residential properties that only account for 23% of the total assessed value pay 58% of the property tax. This is an almost $900 subsidy to every residential dwelling in Calgary.



Obviously it is needlessly unfair to tax one class of property – that may use less public services than other properties – at a significantly higher rate. But there are other damaging consequences to consider. This unequal taxation means that people are not facing the true cost of the services the city provides them. As we know, this inevitably means Calgarians will consume more services than they otherwise would. This is inefficient and costs Calgarians. This is why we support a user pay model where taxes more accurately reflect the cost of providing the individual or business with services, as it is the best way we can allocate the necessary resources to pay for it. This is not about securing special favours for business either. Most of us involved in this sector are equally affected by residential property tax increases, but believe that the current model is no way to best pay for the services Calgarians expect.

For that reason I am encouraged that the City is finally having the discussion on the unequal tax system that harms Calgary’s businesses. Improvements are essential to ensuring that Calgary remains the best place to start or locate a business, and I encourage council to serious consider this proposal.