We’re proud Edmontonians.
That was the takeaway Chad wanted to highlight on the Ryan Jespersen Show this week. On behalf of Prosperity Edmonton, Chad was discussing the need for the City of Edmonton to hold the line on taxes this year. Although the rampant increase in City spending put a negative tone on the interview, there was a positive note at the end:
“We’re proud to live, work and be in this City…the goal is to draw attention to the City’s budget, ask the City to do a comprehensive review to make sure they’re being fiscally responsible. There’s going to be growth in our City – that’s a good thing – but we want to manage that growth responsibly. So we want to have the City be as prudent as they can looking at their budget.”
The math is pretty simple.
From 2006 to 2016, inflation and population growth increased 50%. By contrast, City spending increased over 100% in the same time. These egregious increases in municipal spending are requisitioned from property owners, which in turn are passed through to companies that occupy the space. We wrote an article about net rent which explains this in more detail. In short, leases are structured such that any increase in taxes gets passed onto the tenant. The end result of the City’s run up of spending is that the bill is passed on to small, medium and large companies all over Edmonton. These companies, in turn, have less money to invest back into their businesses. Alternatively, they may look to relocate to surrounding municipalities that have lower taxes. Property taxes that continuously rise faster than inflation and population growth makes Edmonton less competitive, and less business friendly.
Our property taxes are higher than all the immediately surrounding municipalities, and we’re also higher than our neighbour to the south, with commercial property taxes being 17% higher in Edmonton than they are in Calgary.
The large year-over-year increases have been occurring for over a decade, but the situation has finally hit a “tipping point”. A number of industry organizations (including NAIOP, BOMA, the Chamber of Commerce, and others) have assembled to form an advocacy group called Prosperity Edmonton. In a letter to City Council, the group is asking for council to direct administration to find options that result in a budget that doesn’t require any further increase in spending.
We don’t just say we’re proud Edmontonians, we live it every day. For example, Chad has devoted his Instagram account to showing just how beautiful Edmonton is. We want Edmonton to continue on it’s current trajectory, we just feel it’s imperative that the City does not spend with reckless abandon. At the end of the line, someone ultimately has to pay that bill.
Let’s keep the conversation going.
Information contained herein is the sole opinion of the authors and does not reflect the views or opinions of any group, organization or company. View our full disclaimer here.
Chad GriffithsPartner, SIOR, CCIM
Chad is a partner with NAI Commercial Real Estate and focuses on the Greater Edmonton area. Chad entered the industry in 2004 and has completed over 400 commercial transactions with clients ranging from small, local companies to large institutional owners. Chad has been a top 15 producer with NAI Canada-wide since 2013.
Ryan BrownPartner, BCom, SIOR
Ryan is a partner with NAI Commercial Real Estate in Edmonton and is currently ranked nationally as one of NAI's top advisors. Having executed in excess of $100 Million worth of sales transactions and over 2 Million square feet of lease transactions, Ryan has developed a firm understanding of asset evaluation and an aptitude for building design, functionality, and long-term practicality.
Darcie is a licensed Commercial Real Estate Agent in the Province of Alberta with a focus on the Edmonton market and its surrounding areas. Darcie accomplishes custom solutions for her clients through her personable nature and results driven attitude. Darcie can help if you are looking to invest in commercial real estate or are looking for representation for a sale or lease transactions.
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