City Spending & Small Business

I don’t like paying high taxes as much as the next person, but I also understand that my taxes are used for good things: I am proud of our waste management system; I believe we are long overdue for neighbourhood infrastructure renewal, and, though expensive and irritating for two years when it is one’s neighbourhood being renewed, is necessary for a functional urban setting. However, the over-50% increase in taxes in ten years is extreme by Canadian standards, and we are ranked as the highest-taxed city in the country. Edmonton’s seniors simply cannot afford these perpetual increases and are forced out of their homes. People on the verge of extreme poverty are feeling the brunt of high taxes, and these people become homeless, or at least require greater social assistance, adding to other problems that we have to pay for in taxes in a different form, either provincially or federally. And, businesses find it more cost effective to move out of town to smaller centres around town. This does not bode well for urban densification or community growth because we are now slowly forcing people to move out of our city to the smaller urban centres around us. This is a trend that has been developing for the past ten years and is only increasing.

Business taxes are five times what they are for residential tax rolls, enough to chase hundreds of local start-ups outside of the city limits, or even out of town completely, and thus decreasing the profitability for everyone. Take the recent business report on Global News as an example. With reduced rents and less profitability, I have a question for the councillors who are ambivalent to our current taxes: how long do you think we can keep raising taxes every year without serious consequences for the city’s core growth and long-term business sustainability?

An independent report made for a group of concerned businesses last year has clearly stated that “between 2011 and 2015, the City of Edmonton has created an unfavourable tax position of 9.7% for the non-residential property owner, [whereas] the City of Calgary has created a favourable tax position of 4.3%.” Thus, the average commercial or industrial property owner is continually facing a losing position by holding property in Edmonton. We have vast areas of Ward 6 designated “transportation” because property owners have defaulted on paying taxes. One famous business landlord in town was quoted as saying: “the property is not worth the tax; let [city council] figure out what to do with it.” This attitude loses us revenue, keeps areas looking like ghetto- or ghost-towns, and is a destructive response to the long-term desirability of business ventures to remain in our city. Worse, to quote one city councillor when asked about the increases in 2013: “It’s only five more dollars per tax roll. What’s everyone complaining about?” Our city’s administration lives in a culture of spend, spend, spend because they know that council will simply raise taxes to cover the cost of whatever is put forward.

There are literally endless examples of this insane culture of spending, some which translate directly to unnecessary tax increases. A $20-million commitment to the University of Alberta for their skating rinks on south campus costs the average taxpayer about $40. There is no way we should be giving any more of the city’s money to the University for their development. Especially when this is not going to benefit the city at all. The university is a private business, with a horrible track record for making their projects benefit the community at large (I refer to the take-over of Garneau and destruction of historic city homes). I do not support the request for ice rinks, especially since we have a massive problem with Northlands, who have proposed the exact same thing but have a much better record for community involvement and considerations than the University of Alberta. The continual over-spending of high-level city administration and affiliates on travel and costly functions – our former city manager had years of ridiculous travel expenses on our dime without a reprimand – has millions of tax dollars presented to council as “legitimate.” In 2014, our city employees took almost twice the time off than private sector employees, which costs approximately $8 million in lost revenue alone. Instances like this drive anyone to anger, especially when the vast majority of us realize how silly this spending is. There are only a few voices of restraint currently on council, and I say enough of the spending mentality.

The mentality needs to be one of fiscal prudence, and of clear prioritization. Each time someone says “this is about safety” our council considers spending whatever is required, which is neither prudent nor prioritized. If we want to attract people for business, then that should be the city’s focus. If it is on urban renewal, then that is the focus. Everything else must take a back seat to established priorities, but council keeps coming up with new plans or initiatives or problems to solve that require more and more tax revenue to fund. And then, when they finally have to make a decision – for example, the security increases at city hall – the vote goes to administration’s recommendation. To quote one councillor: “we should leave these recommendations to the experts.” No, you should not! It is council’s job to place the spending that administration advises into a larger context of what we can afford and what we need to defer. I advocate for a clear prioritizing of expenses for the next four years, and to put a freeze on taxes for the entire next term. This allows our city to properly budget, and to get into a different mentality of creativity, cooperation, better use of resources, and more logical ideas being presented for our consideration.