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Business Tax Reform

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Extraordinary times, it’s said, call for extraordinary measures. And I doubt that many in Calgary would question that right now is an extraordinary time.

 
At this point, recapping all of the things going against the province and our city in particular feels unnecessary. Whether it’s oil prices, the housing market, or job losses, the challenges Calgary currently faces are well understood.
 
Against such a dismal backdrop, the city is working to figure out what we can do to help Calgary through this downturn and ensure that we’re still intact and ready to go when conditions improve.
 
To that end, at the next City Council meeting I will propose that we give businesses across Calgary a $30 million rebate on their business tax this year and an additional $30 million in 2017.
 
It’s a plan that’s certain to raise any number of questions. How will we pay for this? Could this money be better used elsewhere? Why this and not something else?
 
Calgary, as we know, has been on a good run over the last few years. During those more fortunate times, the City has been prudent enough to put away almost $300 million into what’s known as the Fiscal Stability Reserve. The tax relief I’m proposing will come from this rainy day fund.
 
Of course, the solid financial footing that Calgary enjoys is no accident. The City has made prudent choices around spending, which include not raiding the piggybank at the first sign of trouble. This certainly isn’t that.
 
The sudden drop in oil prices was enough to throw the entire country into a recession. Canada will be lucky to avoid the same fate this year and Alberta definitely won’t. As for Calgary, it’s no surprise that we’re at the epicentre of this hardship.
 
Personally, I don’t know a single person without a friend or family member looking for work. Jobs are the bedrock of any economy and it wasn’t long ago that this type of unemployment would have been unthinkable in Alberta. But here we are. 
 
The City is already going ahead with plans to help our economy become more resilient in the medium and long term, but the positive effects of these will take time to show up on the ground. Tax relief for businesses will provide an immediate counterweight to the economic shock we’re now facing.
 
It will by no means be a panacea, but it will help small and medium businesses at a time when they need it most. Whether a coffee shop, a contractor, an oil company, or a retailer, you don’t have to look far to find a business that’s dealing with falling revenues and higher costs.  
 
An investment made in businesses right now will be paid back as they continue to hire staff, meet payrolls, and pay taxes. Helping local businesses stay on their feet during this downturn fosters a virtuous cycle with direct and indirect economic benefits for the city as a whole. Everyone, after all, works somewhere.
 
During the good times, our local businesses account for a disproportionately large amount of the city’s operating budget. Now that times aren’t as good, it’s the City’s turn to step up and support them.
 
The city has the financial strength to pay for this plan while still maintaining a healthy reserve fund, a strong financial position, and ample liquidity. The businesses that we’ll be supporting now, which helped build the fund in the first place, will be the same ones replenishing it in the years to come.
 
A rainy day fund, by definition, exists for when times get tough. As the rain starts to fall on Calgary in earnest, it’s incumbent on the city to open up an umbre
 
 
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This content represents the personal views and opinions of the Ward Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.

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