Sprawlcast is Calgary’s in-depth municipal podcast. Made in collaboration with CJSW 90.9 FM, it’s a show for curious Calgarians who want more than the daily news grind.

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COUNCILLOR SONYA SHARP: Let’s keep seeing where we can find those efficiencies without actually impacting core services.

MAYOR JYOTI GONDEK: As our population grows and as we face inflation, those things cost more and we have not kept pace.

COUNCILLOR COURTNEY WALCOTT: When you do something years ago for the purpose of grandstanding, this is the cost of it.

JEREMY KLASZUS (HOST): It was a decision that left many Calgarians scratching their heads. In October, city council finalized the closure of Inglewood’s swimming pool. (UPDATE: Council decided on November 22 to keep the pool open for another couple years.) And this comes just a few years after city hall shut down another inner city swimming pool in the Beltline.

When the Inglewood pool was built in the early 1960s, Inglewood had fewer than 2,000 residents. Today, the neighbourhood has more than 4,000 residents. And this population is expected to grow faster than Calgary as a whole in the coming years. Here’s Inglewood resident Fiona McKenzie speaking to council in October.

FIONA McKENZIE: The city is pushing for density, and while we do need housing, we also need accessible and affordable places to be active.

KLASZUS: The Inglewood pool is a relatively small building. And while it doesn’t have any immediate safety issues, city admin has said it would need upward of $600,000 for electrical upgrading.

KLASZUS: But city hall is focused elsewhere these days. In 2021, council approved $57 million to expand the big MNP recreation centre in Erlton, a 45-minute walk from the Inglewood pool. And in 2025, city hall is coming out with a big new strategic plan for recreation, called gamePLAN. Here’s area councillor Gian-Carlo Carra speaking at council in October.

COUNCILLOR GIAN-CARLO CARRA: We have to deliver for the citizens of Calgary a very thoughtfully dispersed across the landscape suite of recreational facilities and other recreational amenities. And in that massive generational investment, something like the Inglewood pool, sadly, does not fit.

KLASZUS: But there’s more to the pool story than you see on the surface. Both the Inglewood and Beltline pool closures are the result of a decision made by a previous city council five years ago. A decision about property taxes.

And if you think property taxes aren’t interesting—think again! I’m out to prove you wrong. Because when it comes to life in a city like Calgary, property tax affects most everything. And Calgary has some specific challenges. Its sprawling footprint, for one, and its explosive growth. But being the corporate centre of Canada’s oil and gas industry has also put city hall in a real predicament, one that it has been struggling with for nearly a decade.

Let’s get into it.

KLASZUS: To understand what happened with the Inglewood pool, we need to start with the basics of how Calgary’s property tax system works.

Whether or not you directly pay property taxes, you indirectly contribute to them in one form or another, even if it’s through rent. And you definitely benefit from them. In many ways, property taxes have a more tangible impact on your life than income taxes you pay to the provincial and federal governments. And that’s because property tax pays for the stuff that’s literally right outside your front door.

TYLER GANDAM: You’ve got roads and sidewalks and your infrastructure that goes into place—your parks, your recreation, transit, transportation.

KLASZUS: This is Alberta Municipalities president Tyler Gandam.

GANDAM: And if you look at it for how much you’re actually paying a year in property taxes versus your income taxes, I think it’s worth noting that there are a lot of services that you pay for in a municipality. And I don’t think people understand the value that they get for what they’re paying for.

KLASZUS: In Calgary, about 15% of one’s property tax bill goes to transit. Around 20% goes to public safety and bylaws. And more than a third goes to the province for education. The city simply collects that and passes it on.

KLASZUS: Every November, city council debates and finalizes the budget for the year ahead. Then city hall takes whatever amount it’s decided to spend, and subtracts revenue sources like fees and grants. And the remaining balance has to be made up through property taxes, as Alberta cities are forbidden from running deficits.

EDDIE LEE: So really, the main revenue generation tool that the City of Calgary has is property taxes.

KLASZUS: This is Eddie Lee, the City of Calgary’s tax and assessment director.

LEE: And property taxes fund roughly 45% of our operating budget.

KLASZUS: This brings us to Calgary’s property tax predicament.

Historically, Calgary city hall has relied heavily on downtown office towers for a big chunk of the city’s property tax revenue. When the oilpatch was booming and downtown Calgary was flush with cash before 2014, those high-value office towers were a major boon for the city’s budget.

LEE: At that point in time, they made up probably about one-third of the total non-residential tax base.

KLASZUS: The tax revenue from office towers downtown allowed Calgary city hall to keep residential property taxes low compared to other Canadian cities. In 2010, businesses carried about 60% of the city’s tax burden, while homeowners took care of the rest.

KLASZUS: And that worked great—until the recession hit in 2014.

EURONEWS (2014): The world hasn't seen such a drop in crude oil prices for a long time.

KLASZUS: After the price of oil crashed, property values for downtown offices plunged.

GARY BOBROVITZ, GLOBAL NEWS (2017): One-third of the towers are empty, over 10% of the population is without a job and oil prices are slashed in half.

KLASZUS: As property values for downtown offices dropped, taxes for businesses elsewhere in the city increased to make up the difference. Here’s University of Calgary economist Trevor Tombe.

TREVOR TOMBE: If you’re outside the downtown core, you’re not a commercial tower whose values have fallen by a lot, then you are effectively accounting for a larger share of the non-residential properties in the city—and therefore are going to bear a larger share of the total dollars that council wants to raise from that overall base.

DEBORAH YEDLIN: As long as we had full office towers that were valued accordingly before the oil price crashed, this was not something anybody thought about.

KLASZUS: This is Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce.

YEDLIN: It took a while for this sort of impact to be felt. We were starting to see things start to shake out in 2015, 2016. And that’s when we started to see things really get out of whack.

KLASZUS: This led the council of the day to offer temporary tax relief to businesses. But this created a so-called “bow wave”—a situation where council was sparing businesses today but making the pain worse tomorrow. Here’s city tax director Eddie Lee.

LEE: After 2014, there was a series of phased tax programs using one-time money. So that one-time money then facilitated more programs to follow after that. And that creates that “bow wave,” because we do a one-time thing—but the problem, the root cause of the problem, hasn’t been addressed or fixed. So we’re really just delaying the issue to the following year.

KLASZUS: Eventually, business owners outside the downtown core got slammed.

JYOTI GONDEK: This is the bow wave that everyone’s been talking about.

KLASZUS: This is Jyoti Gondek in 2019. She was the councillor for Ward 3 at the time and she was on the tax shift working group that city hall formed to deal with this issue.

GONDEK: Because we’ve provided one time money. It’s now come back to roost and people have to pay their full bill.

KLASZUS: At the end of 2019, city council moved more of the tax burden from businesses onto residents. This is what’s known as the “tax shift.”

But many local business owners had already had their property tax bills spike, suddenly doubling or even tripling in some cases after the temporary relief measures ran out. And earlier in 2019, business owners put city hall on blast.

TARA NELSON, CTV NEWS (2019): They demanded a break and they got one. Calgary entrepreneurs will see a 10% cut in their property taxes from last year. This comes after an emergency debate at city hall in the face of what’s being described as a tax revolt by small business owners.

KLASZUS: To offer this new round of one-time tax relief in 2019, council asked city admin to find $60 million in cuts.

That summer, bureaucrats came back with a list of cuts across city departments. Transit. Fire. Police. Affordable housing. Indigenous relations. And recreation—including service delivery at the Inglewood and Beltline swimming pools.

Only one council member voted against the sweeping $60 million in cuts: Druh Farrell. She was frustrated that council kept putting off dealing with the tax shift, focusing instead on a potential Olympic bid and a new Flames arena.

COUNCILLOR DRUH FARRELL (2019): In the budget, we didn’t talk about the tax shift. Now, halfway into this year, we’re dealing with a crisis. It feels impulsive. It is impulsive because we’ve been distracted.

I feel like we have failed our administration, council. And I won’t be supporting these cuts. It feels cruel.

KLASZUS: When Naheed Nenshi was leaving the mayor’s office in 2021, I asked him what he would do differently if he could. He brought up two things: the way he communicated Calgary’s pursuit of an Olympic bid, and the $60 million in cuts.

He regarded it as a “big mistake” in hindsight. He said council had panicked.

The cuts of July 2019 were doubly contentious because days later, council approved spending $290 million on a new Flames arena. That was the original arena deal; it’s since been replaced by the new deal that has the city putting in nearly three times that much up front. That’s a whole other story. You can learn all about that in a previous Sprawlcast episode called The Real Costs of Calgary’s New Arena Deal.

But even as council cut the two inner-city pools with its right hand in 2019, it tried to save them with its left—or at least delay the closures. Councillor Jeromy Farkas made a motion to allocate one-time funding to keep the Beltline and Inglewood pools open a little longer.

COUNCILLOR JEROMY FARKAS (2019): Council, as per our in camera discussion, this is accepting the cut, but recognizing that we will need to have a thoughtful conversation about these community amenities.

KLASZUS: But like the one-time tax rebates for businesses, that only lasted so long. Here’s city recreation director Heather Johnson speaking to council in October of 2024.

HEATHER JOHNSON: In 2019, when this all began, the operating budget for both Beltline and Inglewood pools was removed from our budget at that time. The base funding was removed, and council gave one-time funds for us to do some of the work around engaging the community and coming back with other recommendations. So since 2020, we have been getting one-time funds through the budget process from council, and we have those one-time funds until the end of 2026—the end of this budget cycle.

KLASZUS: Now the question was whether to keep putting money into a pool that would be closed in a couple years anyway or to call it early and save some money. Inglewood residents have been fighting to save their pool but admin recommended finalizing the early closure. Here’s Councillor Gian-Carlo Carra speaking at council in October and emphasizing the city’s upcoming recreation strategy.

COUNCILLOR CARRA: I would like to have all of it. But if I can only have one, let’s invest in the future with gamePLAN. And to the people in Inglewood who love this pool, and I’m one of them, I’m sorry. And I will work hard to make sure that we get every other recreational opportunity coming at us.

KLASZUS: This was happening right after Vecova announced that it would be closing its pool in northwest Calgary. Let’s listen in to a little of the council debate from October.

COUNCILLOR SONYA SHARP: I have been hearing from members of the community all week. It’s clear that this pool is an important part of Inglewood’s history. I won’t be supporting this. And there’s a lot of reasons that I’m going to hear about “you’re not financially responsible, you’re wasting money.” But I think that we could find in our budget some room to support this facility at least for another couple years.

COUNCILLOR TERRY WONG: We push densification and increased population in the area. We do need to keep our inner city assets alive and well and functioning and safe.

COUNCILLOR JASMINE MIAN: What’s hard about the Inglewood pool is that we recognize that we have to publicly subsidize recreation. But the amount of subsidization relative to its performance is just really hard to justify. And so we find ourselves in a crisis of public recreation. And we’re also in a crisis of a lot of other public services like healthcare and education and mental health, and civic-related ones like transit.

And so it’s really hard to listen to the residents—and I’m so sorry for what’s happening—and it’s also really hard to listen to some of my colleagues on this. Because the same ones who approve driving down the tax rate that always leads to cuts in recreation are now the ones who are going to say, “No, we shouldn’t close it.”

KLASZUS: Councillor Courtney Walcott made a similar point. The Beltline pool in his ward already closed in 2021 due to council’s 2019 cuts.

COUNCILLOR COURTNEY WALCOTT: I think it’s a cautionary tale that we persistently separate from the decisions we make as council. And so, five years ago, council just said, “Hey, let’s cut $60 million out of operating, and just find a way to make do with whatever the consequences of those cuts are.” And then, five years later, we’re hemming and hawing over shutting down an aquatic centre.

WALCOTT: I can’t be mad at administration for closing it down now because the reality is that if you keep this open, the money that they have to spend to keep this open is going to be taken from another facility. Because we also have not offered them more money to manage the space. So if it does not come from here, it’s literally going to come from another facility. And then that just puts multiple facilities on a different maintenance schedule, rather than just simply one. And that’s a terrible decision that was brought to us by a $60 million demand for cuts in 2019.

So—cautionary tale. This is the consequence of those types of actions.

KLASZUS: Council narrowly voted 8-7 to close the pool in December. Mayor Gondek was one of the seven who voted against the early closure.

MAYOR GONDEK: Councillor Walcott, I agree with you. We were looking for $60 million in cuts. Some of us weren’t looking for them across the board; some of us were looking for very targeted and specific cutbacks. And we didn’t get it. We got it across the board, and recreation suffered, fire suffered, everybody did. We made a lot of decisions that were not well thought out last time, I will say that. And so now we’re paying for it.

I would echo the same thing that Councillor Mian said. If you are going to say today that you believe in the value of recreation, and you believe in the value of facilities, then you’re going to need to invest more money in a budget.

And so your votes on that budget are going to be very telling about whether this was, in fact, something that you paid lip service to today—or whether you actually believe it.

In November of 2023, council decided to shift more of the tax burden from businesses to homeowners—by 1% each year for the next three years. And council was divided on this.

COUNCILLOR SHARP: The tax shift is good for businesses, but taxpayers are still being hammered by inflation. And affordability is the biggest issue everybody is dealing with. We shouldn’t put further tax responsibility on our residents on top of increased taxes higher than what we told Calgarians a year ago, and every other single cost rising in their face.

COUNCILLOR DAN McLEAN: I’m going to side with not shifting more taxes onto my residents.

COUNCILLOR JENNIFER WYNESS: Now is not the time for this. Now is the time to focus on supporting families in Calgary and allowing businesses to pay their fair share of municipal taxation.

COUNCILLOR ANDRE CHABOT: So we’ve heard—I’ve heard at least from my residents—that their risk tolerance in regard to a tax increase is minimal. I can’t actually sell a tax increase to my residents.

KLASZUS: And then on the other side, you had those in favour of the shift, which council ultimately supported.

COUNCILLOR EVAN SPENCER: I wish there was another way around this. I look at my colleague Councillor Chabot; I know he’s looking for a way around this to defer the pain. We defer the pain at our own peril. It just comes back around to the same decision point at another venue. We have to make hard decisions. That’s part of why we’re here.

KLASZUS: Today, Calgary homeowners carry a little over half of the city’s tax burden—about 53%.

But here’s what’s really surprising to me. Even though most of the tax responsibility has shifted to homeowners, business owners pay more than four times what residents do, a ratio that’s significantly higher than it was 10 years ago. The city legally has to keep that below a five to one ratio or the province has to intervene. And Calgary is getting dangerously close to that threshold.

This tax ratio is something Deborah Yedlin and the Calgary Chamber of Commerce have been raising as a concern for years.

YEDLIN: We’re amongst the highest in the country. So for example, if you are in Vancouver, the businesses pay three to one. It's a three to one ratio in terms of $3 to $1. And Calgary just keeps going up. Edmonton is 3.05. Toronto is 2.59. So we're at the high end of the range.

KLASZUS: And here’s what I couldn’t wrap my head around while working on this story: if the city has shifted more of the tax responsbility away from businesses and onto homeowners, why has this tax ratio grown so much? Why are businesses paying over quadruple what residents pay, even after the tax shift? What’s driving that?

I put that question to University of Calgary economist Trevor Tombe.

TOMBE: Great question, and that’s really the question.

KLASZUS: It has to do with how property tax is calculated.

To set the tax rate, city hall divides the revenue it needs by the total assessment value of properties across the city. And when residential property values go up significantly, as they have, the total assessment value goes up—and that drives down the residential tax rate. But when non-residential property values stagnate, as they have, the total non-residential value doesn’t grow in that same way. And this means businesses don’t see that same tax rate reduction.

TOMBE: I think the most important thing to remember when we’re talking about property taxes, and the most important thing as voters and citizens when we hear commitments by candidates around property taxes, is that the city doesn’t set property taxes. What the city council decides is how many dollars it needs to raise to fund its services and how to split that between businesses and residences. The tax rate then just falls out of a calculation.

And the problem that council is facing now around that kind of rising business tax rate compared to residents is that's not due to city spending growing more than, say, population plus inflation. In fact, since 2021 we have grown total city revenues less than population plus inflation. Since 2014, so if you look over the past decade, we've grown city revenues less than population plus inflation. So the city is restrained, in a sense, in terms of how much financial resources it’s needing to fund its operations.

The problem we’re having is just that the size of the business tax base is kind of flat, and we’re asking it to fund more and more dollars while residential properties are growing in value quite rapidly, and that means fewer and fewer dollars are being asked from that base.

MAYOR GONDEK: There’s a massive risk of provincial intervention. We cannot go past five to one as a ratio. So for every dollar that a homeowner pays, right now we’re seeing businesses pay between $4.60 and $4.80 and that would continue to increase if we hadn’t done the shift. So the province would have absolutely intervened, because they have to if we get to a five to one ratio. And that’s something that I’m working very hard to prevent.

KLASZUS: Calgarians have a range of opinions on property taxes, as council heard before its budget deliberations in 2023.

JIM WILLIAMS: We see record numbers of people going to the food bank, and yet administration is calling for even more tax dollars. I suggest to you the correct increase for next year is zero.

JUSTIN SIMALUK: I just wanted to phone in and say raise my taxes. Calgary is a growing city. And we saw today that in order for us to be competitive nationally, we need to be investing in our city. We’ve had decades of austerity budgets and they’re catching up with us.

KLASZUS: Calgary has been growing by about 70,000 people a year. City hall likes to point out that this is like adding more than the entire population of Medicine Hat annually. And various surveys, including the city’s, have shown citizen satisfaction dropping. Meanwhile the city’s infrastructure is increasingly strained, from water pipes to crumbling pavement on city roads—and city hall has been taking on more responsibilities downloaded from the province to deal with social issues. All of it adds up.

CARLA MALE: It is simply not possible to absorb that many new Calgarians during a time of significant inflation without either having costs increase or services decline.

KLASZUS: That’s former city CFO Carla Male speaking to council in September. At the time she said tax increases would need to go up beyond a combined 3.6% cap that council had set in February. But Male has since been ousted by chief administrative officer David Duckworth. And now admin says it can keep the 2025 tax increase down to what council decided in February, thanks to some newfound investment income.

KLASZUS: Meanwhile, the tax shift remains a big issue—a decade after the oil crash of 2014.

TOMBE: It’s fair to say that council has continued to struggle with this ever since, and hasn't fully come to grips with the challenge itself.

They’ve kind of nudged things more. And the problem would have been worse had we not done these tax shifts, but they just haven’t been big enough. And I think that the real dilemma for council is this tax shift does, of course, mean property taxes, in terms of dollars paid by individuals and homeowners, would need to rise. And that creates a challenging political situation for council. And so their most recent tax shift of 1% for the next three years shifted onto residences—that too will not be enough.

KLASZUS: We’re now less than a year from the next civic election. As I was finalizing this episode, Councillors Andre Chabot and Sonya Sharp introduced a last-ditch effort to keep the Inglewood pool open for a couple more years. (UPDATE: This effort succeeded on November 22, with council overturning its original decision to close the pool in December.)

KLASZUS: Councillor Sharp is also calling for budget cuts to further reduce the 2025 tax increase.

COUNCILLOR SHARP: Let’s keep seeing where we can find those efficiencies and without actually impacting core services. I think it can be done. I’ve worked here long enough to know where you can look.

KLASZUS: I asked Councillor Sharp how she views the $60 million cut that led to the Inglewood pool closure in the first place.

COUNCILLOR SHARP: I would say that it was a mistake back then. We all lost Beltline as well. And we are here talking a lot about building up our downtown, putting more housing in our core, but we have to think about our amenities as well.

KLASZUS: Mayor Gondek says when it comes to those 2019 cuts, lessons were learned the hard way.

MAYOR GONDEK: At that point in time, council was very interested in demonstrating that they were fiscally responsible, and it was deemed that if we could cut a certain percentage out of the budget that we would make lives better for Calgarians. And I think in trying to balance affordability, we instead accomplish deferred maintenance—and that is now playing out with infrastructure and amenities.

We can see that not investing in maintenance and repair and replacement of infrastructure will cost us dearly. No one wants a repeat of what happened in June, and so we’ve got some very difficult decisions to make. And I do think that councils past have neglected what needed to be done. I believe we spent a long time patting ourselves on the back for having the lowest residential property tax in the country, and we can see what that's done now.

Jeremy Klaszus is founder and editor of The Sprawl. If you appreciate our independent Calgary journalism, please support our work today!