New Saskatoon tax rate will ‘force hard choices’ for businesses: chamber of commerce – Saskatoon | Globalnews.ca

The City of Saskatoon’s new tax rate is going “to force some additional, very hard choices for businesses to make here in the next little,” according to Greater Saskatoon Chamber of Commerce CEO Jason Aebig.

City council finalized the 2022-23 two-year budget on Wednesday night, raising the property tax rate by 3.86 per cent and 3.53 per cent each year, respectively.

In an interview Thursday, Aebig said he was surprised when the council raised the tax rates from the preliminary figures of 3.51 per cent and 3.14 per cent.

“The assumption that (the Chamber) made, and I’m guessing others did, was that the proposed rate going into these discussions was the starting point for further reductions,” he said.

He said he wished the councillors had decided to act more like business owners by, for example, reducing or freezing hiring and pausing new initiatives.

He told Global News business owners are growing more frustrated.

“The question that’s on many business minds today is, ‘What would it take to hold the line on property tax?’” he said, saying the COVID-19 pandemic caused a lot of financial challenges.

Councillors did debate some measures to lower the tax rate late in the proceedings, including a motion by Ward 5 councillor Randy Donauer to reduce the overall 2022 budget by 0.5 per cent and by Ward 9 councillor Bev Dubois to freeze all hiring outside of the police and fire department.

Councillors voted against the former motion when city manager Jeff Jorgenson said the city couldn’t afford to cut anymore without decreasing services.

He called it a “fee for service budget.”

“For every dollar spent at budget, you’re buying a very specific thing,” he said.

“There’s no room to cut without impacts any more.”

He also told council the city is still deducting funding from the previous 0.5 per cent deduction.

Councillors defeated the latter motion as well. Ward 10 councillor Zach Jeffries said it was disingenuous to approve previous budget items, which included funding for new fulltime employees, and cut that funding later in the process.

“I think the more we can find (savings) line-by-line, that it gives clear direction to the administration about where they are,” Mayor Charlie Clark said.

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Saskatoon city councillors debate property tax hikes

Clark, who voted in favour of the budget, said it “is going to strategically set up the city for success as we face some of these challenges in the future.”

Those challenges include community safety, climate change and the cost of COVID-19.

He also said the budget responded to the pressure to help revitalize the downtown area.

“I would say to the chamber, one way to be competitive as a city is to have very low taxes, which we do,” he said, citing a 2020 report from C.D. Howe, a think tank, comparing tax rates in 2019.

“The other way is to make sure we’re building a strong, resilient city and we have to do both.”

In 2019, the council approved a budget that entailed property tax increases of 3.87 and 3.7 per cent for 2020 and 2021. Council later voted to reduce the 2021 increase to 2.83 per cent.