Keep Calgary Open – Property Tax Crisis Affecting Calgary Small Businesses
By: Nick Clark
All local businesses in Calgary are going to be hurt by the unprecedented increase in property taxes that shocked business owners last week. It is highway robbery.
Around 64% of commercial property owners will see double-digit increases on their tax bills this year due to a redistribution of non-residential taxes as a result of plunging property values downtown.
As the property tax crisis unfolds, Calgary City Council has called an emergency meeting at 8 am on Monday, June 10 to discuss the issue. A group calling themselves #YYCSMALLBIZ has organized a small business rally at 7:30 AM at City Hall to ensure the small business community has its voice heard and council can see, first hand the Calgarians this is impacting.
We will be at the rally, and we hope other Calgarians will join us as we fight to keep Calgary open.
As a small local business, located in Inglewood, our property taxes have almost tripled in the last few years, increasing from $13,000 to $39,000. We cannot afford this stupidity of government spending.
Calgary city council recently asked the province for help in assisting businesses facing steep property tax hikes, but Municipal Affairs Minister, Kaycee Madu, rejected the possibility of the provincial government stepping in to provide assistance to the city. In our opinion, the Minister is correct, it is wrong to expect the provincial government to bail out the city that itself is being mismanaged.
What is the problem at city hall? Let’s look a little deeper; revenue is down and expenses are up. Yet it is a little more serious and complex than that. Many will suggest that our city fathers have been mismanaging the shop, taken their eye off the ball, and are spending money they do not have.
Don Braid of the Calgary Herald said it best in his recent article, this is a perfect example of how inept elected officials can deeply damage a great city.
“Faced with tax losses and layoffs downtown, impose huge tax increases on surviving businesses to make up the loss, ensuring that many of them shut down too.”
“Establish a $100 million fund to attract new business. Then raise business property taxes so much that you drive out companies still here, while frightening away the ones that might come.”
Here is another example of what has gone wrong. In the past, ENMAX was one of the crown jewels of the province. Unfortunately, the city counselors have turned a blind eye to their fiduciary oversight responsibilities.
The latest financial statements of our city’s utility are not all that impressive. If it was managed based on turning a profit rather than predatory business practices (which have included selling below the true commodity value while trying to buy market share) maybe it might not have been necessary to increase local business taxes at all this year. ENMAX should be a cash cow, but unfortunately it is bleeding.
ENMAX, wholly owned by the City of Calgary, pays a dividend to the City each year. Dividends paid to the City were reduced to $40 million in 2018 and that number has been declining over the last few years from typical historical levels of $60 million. One would think that if you increase sales – the dividends paid should also increase, but this has not happened here.
On Total Revenue of $2.378 Billion, ENMAX’s net earnings for the year ending December 31, 2018 were only $5.1 million. Compared with a net loss of $30.3 million the prior year on revenue of $1.970 Billion. Long-term debt increased to $1.686 Billion. Seriously, how can a utility with a guaranteed rate base lose money? With sales this high, they should be contributing a few hundred million towards the city treasury to help offset the need for a tax hike. We shouldn’t be seeing dividends shrinking.
Looking back five years, in 2013 ENMAX’s balance sheet reported Comprehensive Income of $365.8 million. On the 2018 Consolidated Statement, this line item is now running at a Loss of $11.3 million.
Recently it was announced that ENMAX is considering buying Emera Maine, a utility in the States. Can the taxpayers of Calgary really afford to add another $2 billion to the debt? Wake up Mr. Mayor – stop spending money you don’t have. Invest in Calgary, not Emera Maine.
Because of this move, ENMAX’s credit rating has come under review. The credit rating agency, DBRS Ltd. says the deal, which is entirely debt-financed, will weaken the company’s cash flow-to-debt ratio.
Maybe it is time to sell ENMAX and use the money to enrich our city rather than going down to Maine and borrowing $2 billion and putting Calgarians deeper in debt. Maybe one of the solutions to solve the property tax problem is to manage ENMAX as a profitable cash cow and investing in Calgary rather then Emera Maine.
Dear Mr. Nenshi, why don’t you instruct the city’s utility to focus on cutting costs, increasing profits, bringing jobs back home that have been shipped overseas, and increase dividends paid to the city?
As you said, “if you’re bleeding, get a Band-Aid”. It is time to stop the bleeding.
Choosing local independent businesses for your goods and services has many benefits, including, strengthening your local economy, creating jobs and opportunities, giving back to the community, and more.
Shopping locally doesn’t only apply to the coffee you buy each morning, the food you eat, or the clothes you wear. It also applies to services like your electricity and natural gas. There are a number of small, local energy providers in Alberta who are actively part of the community in which they live. Each one has a unique story behind why they decided to sell electricity and natural gas, and each one represents local jobs and economic benefits.
Being a small local company comes with benefits. They aren’t staffed with high paid executives and don’t have to report to corporate shareholders who demand ever increasing profits or have the luxury of the city backing the municipal utility that has unlimited borrowing power – financed by taxpayers. This means the company doesn’t feel the need to bleed the last dime out of consumers. One example of this is the offer of discounted electricity rates for seniors.
“While we may not be the biggest energy company in Alberta, our customer care team and local software development staff truly make us the best,” said Nick Clark, Director of Utility Network and Partners. “Unlike ENMAX, ATCO and Direct Energy, who have shipped many jobs out of Alberta, we are proud to be Albertan and we are working to keep jobs in the province."
We will survive the increase in property tax – and we thank all of our existing and new customers for supporting us. All we need to do is increase our sales to pay for the stupidity of our city fathers who don’t know the value of the dollar. If you know of anyone who is using one of the utilities that shipped jobs offshore – suggest they switch to a local energy company. Here is a list of 20 companies in Alberta that would welcome your business.
UTILITYnet's office is located in Calgary’s popular Inglewood community. You are welcome to drop in anytime to meet the team. Knock on our door at 200, 1316 9th Ave SE.
Around 64% of commercial property owners will see double-digit increases on their tax bills this year due to a redistribution of non-residential taxes as a result of plunging property values downtown.
As the property tax crisis unfolds, Calgary City Council has called an emergency meeting at 8 am on Monday, June 10 to discuss the issue. A group calling themselves #YYCSMALLBIZ has organized a small business rally at 7:30 AM at City Hall to ensure the small business community has its voice heard and council can see, first hand the Calgarians this is impacting.
As a small local business, located in Inglewood, our property taxes have almost tripled in the last few years, increasing from $13,000 to $39,000. We cannot afford this stupidity of government spending.
Calgary city council recently asked the province for help in assisting businesses facing steep property tax hikes, but Municipal Affairs Minister, Kaycee Madu, rejected the possibility of the provincial government stepping in to provide assistance to the city. In our opinion, the Minister is correct, it is wrong to expect the provincial government to bail out the city that itself is being mismanaged.
What is the problem at city hall? Let’s look a little deeper; revenue is down and expenses are up. Yet it is a little more serious and complex than that. Many will suggest that our city fathers have been mismanaging the shop, taken their eye off the ball, and are spending money they do not have.
Don Braid of the Calgary Herald said it best in his recent article, this is a perfect example of how inept elected officials can deeply damage a great city.
“Faced with tax losses and layoffs downtown, impose huge tax increases on surviving businesses to make up the loss, ensuring that many of them shut down too.”
“Establish a $100 million fund to attract new business. Then raise business property taxes so much that you drive out companies still here, while frightening away the ones that might come.”
Here is another example of what has gone wrong. In the past, ENMAX was one of the crown jewels of the province. Unfortunately, the city counselors have turned a blind eye to their fiduciary oversight responsibilities.
The latest financial statements of our city’s utility are not all that impressive. If it was managed based on turning a profit rather than predatory business practices (which have included selling below the true commodity value while trying to buy market share) maybe it might not have been necessary to increase local business taxes at all this year. ENMAX should be a cash cow, but unfortunately it is bleeding.
ENMAX, wholly owned by the City of Calgary, pays a dividend to the City each year. Dividends paid to the City were reduced to $40 million in 2018 and that number has been declining over the last few years from typical historical levels of $60 million. One would think that if you increase sales – the dividends paid should also increase, but this has not happened here.
On Total Revenue of $2.378 Billion, ENMAX’s net earnings for the year ending December 31, 2018 were only $5.1 million. Compared with a net loss of $30.3 million the prior year on revenue of $1.970 Billion. Long-term debt increased to $1.686 Billion. Seriously, how can a utility with a guaranteed rate base lose money? With sales this high, they should be contributing a few hundred million towards the city treasury to help offset the need for a tax hike. We shouldn’t be seeing dividends shrinking.
Looking back five years, in 2013 ENMAX’s balance sheet reported Comprehensive Income of $365.8 million. On the 2018 Consolidated Statement, this line item is now running at a Loss of $11.3 million.
Recently it was announced that ENMAX is considering buying Emera Maine, a utility in the States. Can the taxpayers of Calgary really afford to add another $2 billion to the debt? Wake up Mr. Mayor – stop spending money you don’t have. Invest in Calgary, not Emera Maine.
Because of this move, ENMAX’s credit rating has come under review. The credit rating agency, DBRS Ltd. says the deal, which is entirely debt-financed, will weaken the company’s cash flow-to-debt ratio.
Maybe it is time to sell ENMAX and use the money to enrich our city rather than going down to Maine and borrowing $2 billion and putting Calgarians deeper in debt. Maybe one of the solutions to solve the property tax problem is to manage ENMAX as a profitable cash cow and investing in Calgary rather then Emera Maine.
Dear Mr. Nenshi, why don’t you instruct the city’s utility to focus on cutting costs, increasing profits, bringing jobs back home that have been shipped overseas, and increase dividends paid to the city?
As you said, “if you’re bleeding, get a Band-Aid”. It is time to stop the bleeding.
Shopping Locally Makes a Difference
What can Calgarians do? First; hold the Mayor and city counselors’ feet to the fire. If they refuse to face the facts then get rid of them. Secondly, consider choosing a small local business for your goods and services. It is time for Calgarians to band together and support each other’s local business. Buying local is now more important than ever. If you have the opportunity to support a local business, then why not?Choosing local independent businesses for your goods and services has many benefits, including, strengthening your local economy, creating jobs and opportunities, giving back to the community, and more.
Shopping locally doesn’t only apply to the coffee you buy each morning, the food you eat, or the clothes you wear. It also applies to services like your electricity and natural gas. There are a number of small, local energy providers in Alberta who are actively part of the community in which they live. Each one has a unique story behind why they decided to sell electricity and natural gas, and each one represents local jobs and economic benefits.
Being a small local company comes with benefits. They aren’t staffed with high paid executives and don’t have to report to corporate shareholders who demand ever increasing profits or have the luxury of the city backing the municipal utility that has unlimited borrowing power – financed by taxpayers. This means the company doesn’t feel the need to bleed the last dime out of consumers. One example of this is the offer of discounted electricity rates for seniors.
“While we may not be the biggest energy company in Alberta, our customer care team and local software development staff truly make us the best,” said Nick Clark, Director of Utility Network and Partners. “Unlike ENMAX, ATCO and Direct Energy, who have shipped many jobs out of Alberta, we are proud to be Albertan and we are working to keep jobs in the province."
We will survive the increase in property tax – and we thank all of our existing and new customers for supporting us. All we need to do is increase our sales to pay for the stupidity of our city fathers who don’t know the value of the dollar. If you know of anyone who is using one of the utilities that shipped jobs offshore – suggest they switch to a local energy company. Here is a list of 20 companies in Alberta that would welcome your business.
UTILITYnet's office is located in Calgary’s popular Inglewood community. You are welcome to drop in anytime to meet the team. Knock on our door at 200, 1316 9th Ave SE.