I have witnessed many boom and bust cycles over the years in Calgary. Each time, we wait out the downturn and carry on with business as usual.
Although there are positive signs of recovery, this recession is different. Rather than a regular downturn in the business cycle that will fix itself, financial experts agree Calgary is experiencing a ‘structural recession’. This more serious type of recession exposes the risks of relying heavily on a single industry. We cannot treat a structural recession with tools meant for a cyclical one. In other words, we cannot wait this one out.
Evidence of the downturn is obvious in all areas of Calgary, but particularly in the downtown core. Downtown historically generated around 40% of The City’s non-residential tax revenue and 25% of City-wide employment. With record vacancy rates and declining property values in the downtown, 2016 saw a sharp decline in property tax, parking, and transit revenues. Because Calgary’s economic health is heavily reliant on the health of our downtown, this resulted in a dramatic tax burden shift to businesses outside the core.
Having been a small business owner for 17 years, and the manager of the Kensington Business Revitalization Zone, I understand the challenges businesses face. That is why I supported $45 million in one-time relief for businesses experiencing large increases in property taxes. While The City is able to afford short-term assistance, we need long-term solutions to address the root cause of the tax shift – a struggling downtown core. Businesses across Calgary, both small and large, depend on a strong downtown.
Calgary’s downtown worked well for 1980, but will it work for 2025 and beyond? The problem is complex with no easy solutions. Earlier this year, Council supported my motion to host a Downtown Economic Summit to bring together the best minds to create recommendations for a more resilient, creative, and diversified downtown. Work from the private sector, social organisations, and all three orders of government is required to fundamentally shift the downtown economy and emerge from the recession better than ever.
All is not doom and gloom. We have a tremendous opportunity to create conditions for businesses to thrive and to get Calgarians back to work.
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7, Ward. “Ward 7 News: April Newsletter: Downtown Economic Summit.” The City of Calgary, The City of Calgary, 3 Mar. 2017, www.calgary.ca/citycouncil/ward-7/Pages/News/April-Newsletter-Downtown-Economic-Summit.aspx. Accessed 23 Apr. 2017.