Saskatoon’s New Tax Rate ‘Will Force Tough Decisions’ For Businesses: Chamber of Commerce – Saskatoon | The Canadian News

The new city of Saskatoon tax rate “will force businesses to make some additional and very difficult decisions here in the coming period,” according to Jason Aebig, executive director of the Greater Saskatoon Chamber of Commerce.

The city council finalized the 2022-23 two-year budget on Wednesday night, increasing the property tax rate by 3.86 percent and 3.53 percent each year, respectively.

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

“The assumption that (the House) made, and I suppose others did, was that the rate proposed for these discussions was the starting point for further reductions,” he said.

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

He said Global News business owners are increasingly frustrated.

“The question that is on many business minds today is, ‘What would it take to maintain the cap on property tax?’” He said, saying that the COVID-19 pandemic caused many financial challenges.

Councilors debated some measures to lower the tax rate at the end of the procedure, including a motion by District 5 Councilman Randy Donauer to reduce the 2022 general budget by 0.5 percent, and District 9 Councilman Bev Dubois, to freeze all hiring outside of the Police and Fire Department.

Councilors voted against the previous motion when City Manager Jeff Jorgenson said the city could not afford to cut further without reducing services.

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He called it a “budget service fee.”

“For every dollar spent within budget, you are buying something very specific,” he said.

“There is no more room to cut without impact.”

He also told the council that the city is still deducting funds from the previous 0.5 percent deduction.

Councilors also rejected this latest motion. District 10 Councilman Zach Jeffries said he was disingenuous to approve previous budget articles, which included funding for new full-time employees, and cut those funds later in the process.

“I think the more we can find (savings) line by line, we give the administration clear direction on where they are,” said Mayor Charlie Clark.

Clark, who voted in favor of the budget, said it “is going to strategically shape the city for success as we address 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 pressure to help revitalize downtown.

“I would tell the chamber, one way to be competitive as a city is to have very low taxes, which we do,” he said, citing a CD Howe 2020 Report, a group of experts, comparing tax rates in 2019.

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

In 2019, the council approved a budget that involved property tax increases of 3.87 and 3.7 percent for 2020 and 2021. The council then voted to reduce the 2021 increase to 2.83 percent.