March 23, 2020
Greg McLean MP today wrote to Mayor Naheed Nenshi and Premier Jason Kenney, calling on them to allow businesses in distress to defer their municipal taxes. At a time when many businesses are seeking federal and provincial financial support to keep the lights on, they should not be using some of that support to pay taxes to another level of government. The text of the letter to Mayor Nenshi follows:
23 March 2020
His Worship Mayor Naheed Nenshi
Mayor of Calgary
PO Box 2100, Station M
Calgary, AB, T2P 2M5
We are governing in interesting times.
Last week, the Government of Canada presented its financial plans to address the economic and liquidity crises that will arise as a result of the COVID-19 emergency. Let me say that there will be no city more affected by this slowdown than Calgary, as a result of the global oil pricing shock that will virtually sideline a large part of our largest economic driver for this season.
Amongst billions of dollars in federal support is $10 billion earmarked for supporting businesses directly with credit to see them through the next few months, when revenue will be scarce for most small businesses. The intent is clear – to keep these businesses open so that they continue to provide jobs and are ready to serve their customers when this tempest passes. Having establishments fold, so that new ones may rise to take their places will delay the eventual recovery and cause further economic hardship and potential dislocation from our city.
In that light, I came to realize after a conversation with a constituent business owner, who enquired about funding so he could ‘keep the lights on’ through this period when he has no customers, that part of his fixed expenses was – municipal taxes!
Now, I’m certain you agree with me that the intent of the emergency federal program is not to take funds from one level of government in Canada, so that the bills at another level of government can be paid. The intent of the emergency relief is clearly to pay the operational bills for the sake of the survival of the small business enterprises, and not to transfer part of the funds to the municipalities that have the financial relationships to withstand the delay that will be encountered in collecting fees and taxes.
I know the City has bills to pay; for the most part, these are fixed expenses – and will be the same whether hundreds of small businesses fold and are, thus, unable to contribute to our services, or not.
I sense the federal government is cobbling together this financial rescue as best they can, with the resources and tools at their disposal, so this financial assistance ‘leakage’ may not have occurred to them yet.
Therefore, could I please ask you and Council to consider a move to postpone the collection of taxes from these targeted businesses, for the period when much of their operations will be shut down.
A more appropriate and broad-based approach would be to forgive municipal taxes for all businesses and properties for a two-month period. This would address not only the businesses that will face hardship, but also the landlords and homeowners whose income has been disrupted by this emergency. Any tax savings to landlords could be tracked to flow to their tenants. The City’s forbearance in this manner would lower the fixed expenses for everyone, so that funds can flow properly to the necessities we all require.
By moving forth with these measures, you will be coordinating efforts from all three levels of government in confronting an economic tsunami that we have not previously witnessed. The benefits will be evident immediately, and our economic advantage will grow in the future.
To borrow a phrase from the investment world, ‘the first step in building wealth is not to destroy wealth.’ Likewise, with Calgary’s businesses and property owners and renters.
I will also be writing the Premier on this matter, to suggest a province-wide approach.
If you need any input, please contact me directly.
Greg McLean, M.P.