Thursday, 4 August 2016

The Human Cost of Endless Tax Hikes

By: Paige MacPherson

It's no secret that small business owners in Calgary have been hit hard this year. Rising property taxes are one of the factors at play, with many business owners facing property tax hikes in the double-digits-some even in the triple- digits. The 2016 business property tax rose 3.8 per cent on top of increased assessments.

Business owners across Alberta are grappling with an increasing minimum wage and increasing Canada Pension Plan payroll taxes. Restaurants are dealing with increased liquor taxes. Everone is facing declining sales as unemployment is spiking.

Darren Hamelin was the owner of Escoba Bistro in downtown Calgary, a wine bar that had been open for 20 years. Last spring, Hamelin's property taxes were hiked by 97 per cent. Between declining sales and a bike lane slapped in front of his storefront that severely limited parking, the property tax hike was a hit.

Hamelin wasn't going to let his small business be swallowed by tax  hikes without a fight. He hung a giant "For Sale $4.7 million" sign on the front of his restaurant, based on the city's assessed value.

Hamelin spent $14,000 fighting the increase. The city was demanding $67,000. He ended up paying $34,000.

He won. Hamelin could stop wasting time fighting the city and get back to focusing on his business.

Unfortunately, the story doesn't end there.

This year, the city was demanding $55,000 in property taxes. It came at an even worse time than last year. A slumping Canadian dollar, a worsening downturn, a barrage of other taxes coming his way ... and now this.

The property tax hike was the last straw.

On June 1, he told his staff that he would be closing the doors to Escoba Bistro for good after 20 years in Calgary. His 25 employees are now out of work.

The incoming provincial carbon tax will make matters worse, increasing the cost of inputs, heating, electricity and driving up property taxes further. Despite a one per cent cut to the small business tax, Restaurants Canada says a carbon tax is the absolute last thing Alberta restaurants need right now.

The owners of Calgary-based Atlantic Trap and Gill faced a 37 per cent property tax increase this year, which they fear will force them to close their doors.

Co-owner Tracy Johnson penned an open letter to her MLA:

"Our business has been here for 18 years through heard work and perseverance. If there is no way to decrease this increase in taxes we will be closing our doors. I do not understand your government, as you will now be collecting $0 per year in taxes. And you will be throwing 28 people into the unemployment line."

Nobody wakes up in the morning thrilled to pay taxes. But no one is calling on Mayor Nenshi to cut property taxes or Premier Notley to halt her carbon tax just for the sake of it. It's because endless tax hikes have a human cost. In Calgary, we are witnessing the cost first-hand. Governments would be wise to open their eyes.

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