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Calgary Mayor Naheed Nenshi risks losing city’s small businesses

The big question in Calgary’s civic politics is how much of the shine has come off Mayor Naheed Nenshi, who is running for his third term of office.

Chris Bolin/The Globe and Mail

There is a growing discontent among small-business owners in Calgary these days and that sentiment may find its way to the city's ballot boxes on Oct. 16.

The big question in civic politics is how much of the shine has come off Mayor Naheed Nenshi, who is running for his third term of office. In the last municipal election in 2013, he waltzed away to victory with a stunning 74 per cent of the vote. But Lori Williams, associate professor of policy studies at Mount Royal University, says the mayor has some vulnerabilities on a few fronts, particularly with the small-business community.

A steep hike in property taxes for some businesses – a result of the redistribution of taxes after downtown properties lost value – caused a stir earlier this year and the city later agreed to cap increases at 5 per cent. With tax changes coming from other levels of government and rising minimum wages – all compounded by lower revenues in the wake of Alberta's recent recession – many small-business owners are feeling under siege. And the city's Mayor is feeling the heat.

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"Some people are absolutely going to vote for somebody else. And that somebody for the business folks that are mad is probably going to be Bill Smith," Ms. Williams said.

Mr. Smith, a small-business owner himself, operates a boutique law practice called Legal Innovations and is considered to be one of the mayor's main challengers, along with incumbent City Councillor Andre Chabot.

Mr. Smith wants to harness the discontent he sees in the small-business community. "I always think the job of a municipality is to create the conditions for businesses to be successful," he said, vowing to rein in taxes and ease red tape.

"The small-business community, in particular some of whom have experienced very significant tax increases, are not happy with the mayor and they're looking for a change," Mount Royal's Ms. Williams said. "Of course, the mayor is one of 15 votes [on the council] and won't be able to make a shift by himself, but they're hoping that a new candidate will raise the issues they're concerned about."

Adam Legge, president and chief executive of the Calgary Chamber for the past seven years, said business is pretty frustrated these days at all three levels of government. "Right now, we have a struggling economy. We have high unemployment. High office vacancy – and businesses that are asked to contribute more when they're receiving less in terms of revenue," Mr. Legge said.

"Finally, business is coming to the point where they're saying, 'Enough is enough.' There is no more to give," he said. "They've had to make some difficult choices, like cutting and reducing expenditures. They're saying [to the] City of Calgary: 'It's time to do the same.' It's reached a point of frustration that I haven't seen in my tenure here at the chamber."

Calgary is just now slowly recovering from the economic downturn that resulted from a collapse in oil prices . Thousands of jobs were lost, particularly in the oil patch, and a ripple effect was felt throughout all segments of the city's economy, particularly in the bottom lines of small-business owners.

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Mr. Nenshi has heard the chatter. Many small-business owners have told him that they're feeling pretty piled on. That they're struggling with changes that are being proposed at the federal and the provincial levels. The economy is still fragile and people are nervous about what the future holds.

"I think that we've navigated our way through this most difficult economic downturn that anybody can remember in a pretty good way," Mr. Nenshi says. "And we're in recovery now. The economy added tens of thousands of jobs this summer. We're no longer the highest unemployment rate in Canada. I think the people will look at results over the last seven years and see is this a better place to do business."

When asked how he would characterize the current relationship between Mr. Nenshi and the small-business community, Mr. Smith, his rival in the mayoral race replied: "I can tell you I'm getting a lot of support from the business community, so I think that probably speaks for itself … They've got a number of things that are coming at them at one time and it's the feeling they're getting ganged up on these days."

Mr. Chabot, the councillor, could not be reached for comment.

In its recent annual Property Tax Gap Report, the Canadian Federation of Independent Business (CFIB) analyzed residential and commercial property tax rates levied by Alberta's municipalities over the past decade. In Calgary, commercial property owners are paying 3.81 times as much in taxes as a residential property owners on the same value of property.

"Business owners are not cash cows that can simply keep giving more and more tax dollars," says Amber Ruddy, Alberta director for the CFIB. "You need to find value for service in the tax dollars that are being collected and we need to see a vision for making it easy to do business."

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Mr. Nenshi said the cap on small-business tax increases will help. He is working on revamping the assessment and complaints system at City Hall, and also wants to revamp the Calgary's procurement process, making it easier for small-business owners to sell their goods and services to the city. He said he is committed to helping small business on the revenue side by helping the city's economy grow again.

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