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By Amber Ruddy
Published in "Business in Calgary" on September 2, 2018
Property tax increases have small business owners seeing red.
According to new analysis by the Canadian Federation of Independent Business (CFIB), 45 per cent of business owners surveyed in Edmonton have considered moving their business due to high property tax rates.
Does that mean every one of these business owners is packing up shop tomorrow? Absolutely not. What it does mean is that many small business owners are reflecting on whether the reward is worth the risk, and it leaves them wondering if governments actually respect the personal sacrifices made to create jobs and contribute to the economy.
The City of Edmonton has been increasing spending faster than population and inflation growth. Out-of-control growth in the City’s operating budget leads to tax hikes, disproportionately on businesses, making it harder for small business owners to earn a living.
During difficult economic times, small business owners want the municipal government to tighten their belts and have the grit to make tough choices. Small business owners are happy to pay their fair share, but business owners don’t believe the value of services received justifies what they pay in taxes. In fact, 79 per cent of small businesses owners disagree with the statement: “Over the past three years, the value-for-money in terms of municipal services I receive and municipal taxes/fees I pay has improved”.
Furthermore, 77 per cent of entrepreneurs disagree that the City of Edmonton needs to increase in size (e.g. increase spending/taxes) to keep up with community growth. Business owners want the municipality to find efficiencies and savings, just like businesses do to remain competitive and stay afloat.
The city is at the beginning of a four-year budgeting cycle, and now is the time to set priorities. Three things the City of Edmonton could do to ensure they spend within their means are: stick to core services (such as snow removal, building critical infrastructure, and road maintenance), contract services out to the private sector where possible, and implement a sustainable wage and benefits policy for public sector positions.
Due to escalating costs being imposed onto businesses, a group of associations representing various parts of the business community called Prosperity Edmonton launched to encourage Council to hold the line. Prosperity Edmonton is offering solutions to boost competitiveness and small businesses confidence.
There is no question that small and medium sized enterprises are the engine of Alberta’s growth. They are the first to hire and the last to let go when it comes to creating private sector jobs. The more governments understand the challenges and hardships of small businesses, the more they can cater public policies to entrepreneurs and create vibrant prosperous cities.
This story was originally published in the Business in Edmonton Magazine