• It's a pleasure to be here today to discuss the process surrounding the potential harmonization of Calgary's business tax. I would like to first thank Alderman Lowe for bringing forward this important issue, and the administration for the work they have done so far.

• Many of the previous speakers have clearly identified some concerns regarding the process, and I fear being a bit repetitive, but I do think it is worth emphasizing some of them again.

• For starters, the CTF was very pleased to see that the second directive given to administration when working on this process was that there would be no impact on the residential tax base. Our supporters include both small business owners who pay the non-residential property tax as well as the business tax, and residents who only pay residential property taxes. We could not support the approach or the process if it meant an increase in residential property taxes.

• However, what we feel is missing, is a directive that the harmonization process should not result in higher revenues from businesses or an increase to the tax load borne by businesses.

• According to the recommended Stage B Stakeholder Consultation and Communications process, the only opportunity for the business community to raise this issue, and to ensure this does not end up being a back door approach to increase taxes on Calgary businesses would be during the meetings scheduled for June and July of this year.

• Moreover, if this is intended to be implemented as soon as 2009 (as referenced in part C), obviously, the discussions scheduled in September and December would be focused on the minutia rather than the more important fact that, unfreezing the business tax without a firm commitment of freezing revenues, would mean higher taxes for Calgary businesses.

• Therefore, the time to point out this alarming fact seems to be in June and July, which in addition to being too quick and in the middle of the summer, when many Calgarians are spending time with their families, it does not allow enough time for a thorough debate.

• Further in regards to the process timeline, no where in the proposed timeline does it discuss the need for a broader public consultation. While residential taxpayers have been given some assurance that their taxes will not be going up as a result of harmonization, many will still undoubtedly be concerned about the impact on the city as a whole.

• Most Calgarians rely on businesses in Calgary for their employment. A recent KPMG Competitive Alternatives Study indicated that the City of Calgary is now the second most expensive location in Canada to do business.

• It further indicated that whereas six years ago Calgary had a large competitive advantage over US cities in terms of costs to businesses, it is now more expensive than most.

• The missing directive to ensure taxes on businesses will not go up, threatens to push up the cost to do business in Calgary even further.

• Because of this, we feel strongly that if there is any potential for harmonization to further disadvantage Calgary businesses, and risk the employment of thousands of Calgarians, it would seem appropriate that this process involve consultations with all Calgarians, and not just business associations.

• So we would recommend the consultation process be expanded significantly.

• In addition to allowing more people to join the discussion, we would like to see the city consider something the City of Winnipeg incorporated in their process.

• The City of Winnipeg struck an expert committee to find efficiencies and savings within the city as to ensure neither residential nor business taxpayers were burdened by phasing out of their business tax.

• I've brought with me a copy of the final report of the Winnipeg Economic Opportunities Commission. As you will see from the report, the commission was a very valuable part of their process.

• The commission found the roughly $56-million required to eliminate the business tax through: expenditure savings, alternative revenue, priority allocation of revenue growth and provincial-city efficiencies.

• In conclusion, the Canadian Taxpayers Federation is supportive of the idea of eliminating the extra bureaucracy of the business tax and the potential for efficiencies and savings. However, it is clear that what is being proposed here will very likely result in higher taxes from Calgary businesses, which we do not support.

• Further, the potential process you are considering today is also not broad enough and does give adequate opportunity for Calgarians to debate the potential negative ramifications of higher business taxes on their city.

• Unless this committee is prepared to re-direct administration to ensure business taxes will not go up, or commit to an Economic Opportunities Commission like Winnipeg's, we would urge you to reject the current process.

• Thank you.

By: Scott Hennig
Posted: May 13, 2008
Topic: Alberta

Contact the regional director Scott Hennig for further information.

Type: Related

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