Of all the quirks and machinations bombarding Calgary business, few are as pervasive as government policies. The good, the bad and the contentious. Municipal, provincial and federal.
“Particularly small businesses (SMEs) feel policy impacts influencing their cost of doing business from every level of government,” explains Kayode Southwood, the Canadian Federation of Independent Business (CFIB) senior policy analyst for Alberta. “Both the federal and provincial government collect taxes through their small business tax rates, while Alberta’s municipalities continue to increase property taxes year after year.”
CFIB’s Business Barometer® showed low business optimism has become a persistent challenge since the pandemic, driven by rising costs. Key cost pressures for Alberta’s businesses include insurance, taxes and regulatory expenses, and wage costs.
The stats and numbers tell the undisputable story. Calgary businesses deal with a triple whammy. Municipal, federal and provincial policies, and regulations.
“Government decision-making at all three levels directly shapes the operating environment for Calgary businesses,” says Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce.
“Municipally, property taxes, housing and investment in critical infrastructure have a direct impact on business costs and local competitiveness. Provincially, everything from taxation, investments in health care and education – all of which contribute to talent attraction – influences the growth trajectory of businesses. Federally, businesses are affected by regulatory burdens, tax treatment of capital investments and international trade policy.
“Collectively, these measures contribute to business success and economic growth but across all levels, regulation remains a significant constraint on business growth.”
According to the CFIB report, reducing the cost of doing business should be the number one priority for any level of government concerned about the economic wellbeing of the areas they represent. Business owners cited operational costs (71 per cent), taxes (68 per cent), energy costs (62 per cent), and trade/economic uncertainty (55 per cent).
With the onset of the U.S.-Canada trade war at the beginning of last year, long-term small business confidence plummeted to the lowest level ever.
The impact and the speedbumps of government policies and regulations are an ongoing issue for businesses big and small. And the construction and development sector is particularly impacted.
“In Calgary development, provincial legislation that sets the rules and municipal policies decide how those rules are applied on the ground,” explains the respected Cole Harris, president of the Centron Group of Companies. “Land use bylaw, density, infrastructure requirements and development fees are all shaped by this overlap, ultimately determining what gets built, where and how quickly. For Calgary to attract and retain investment, municipal initiatives must balance long-term goals with short-term impacts.”
He cites downtown construction disruptions, increasing tax pressure and uncertainty around major transit projects as adding risk and cost to doing business. “Clear timelines, coordinated construction, temporary relief measures and firm infrastructure commitments would improve confidence and support both existing businesses and new development.
“Development becomes more efficient when policies focus on certainty and speed. Firm approval timelines, predictable development fees and better alignment between land use and infrastructure – supported by stable municipal policies, would significantly reduce cost, risk and delays for businesses.
Centron successfully navigates provincial and municipal speedbumps and grows Calgary with recent success like the 4,000 units and 900 acres of The Oliver in the centre of the Beltline, award-winning Calgary restaurants like Luca, Fleetwood Lounge, Pazzi Pizzeria, Gatsby’s Ultra Fine Dining and more.
Cole Harris adds the positivity that “the city has made meaningful progress in improving its permit process in recent years. Continued collaboration and alignment with industry would help build on these gains and further streamline approvals.”
Barbara Lee is executive director of Calgary’s Italiano Please!, a social enterprise serving authentic Roman cuisine with a purpose. “As a very small, family-run micro business, we are tiny but mighty, revolving around authentic Roman food, in a 100 per cent accessible and inclusive environment.
Italiano, Please! is particularly impacted by municipal matters. “Given the continuing downturn in spending generally and in-person shopping, particularly in the downtown area, times are tough for small business in Calgary. The city could help by finding ways to attract customers to come downtown for pleasure, maybe subsidizing the cost of parking when small businesses are the destination. A perception that public transit is unsafe and the excessive cost of parking are major deterrents to bring customers downtown.”
She notes that provincially, there are many great programs aimed at facilitating the entry of marginalized workers into the workforce, which also support employers financially, as well as many initiatives that support training and upgrading of skills.
Daniel Plenzik, distiller and co-founder of Calgary’s Bridgeland Distillery, explains that his successful business, and most SMEs, are affected by all three levels of government policies. “Municipally, the city seems to set an adversarial, lawyerly tone, rather than cooperative, technical and ‘let’s get this completed’ tone. After all, small business support starts at the city council level and trickles down.”
He cites regulations and costs. “There would be potential for many more small businesses if unnecessary bureaucratic costs came down to a reasonable level. Provincially, we could stop acting like a country, versus a province. Federally and provincially, removing interprovincial trade barriers would help. This is a serious issue when small businesses are better off exporting outside of Canada than within our own country, and we have a hard time selling products outside our own province.”
Not coincidentally, government policies don’t only plague industry and businesses. A recent Canadian Medical Association (CMA) report showed that Canadian doctors are losing 20 million hours a year to unnecessary paperwork, spending 42.7 million hours annually on bureaucratic tasks, roughly half of which they deem unnecessary red tape.
It underscores the reality that government policies not only affect the costs of doing business but also impact efficiency and productivity.
Deborah Yedlin emphasizes the most urgent policy obstacles facing Calgary businesses are cost related. “In fact, 58 per cent of Calgary businesses identify rising costs as their most pressing concern, contributing directly to growing business pessimism. The pressures include higher tax and insurance costs, inflation and weakened consumer demand amid economic uncertainty. Calgary businesses pay 4.6 times more in property taxes than residential property owners, preventing business growth.
Trade policy has also emerged as a critical challenge. After decades of free trade with the U.S., the introduction of tariffs over the past year has made it increasingly difficult to maintain customer demand. Calgary is also the second most tariff-vulnerable city in Canada due to its concentration of exports in crude oil, natural gas and beef, with 97 per cent of exports headed for the U.S.
“Taken together, heightened costs and trade challenges have made the business environment incredibly uncertain.”
According to Southwood, the most effective way for federal, provincial and municipal governments to foster growth is through reducing taxes. “Federally, CFIB recommends reducing the small business tax rate as an economic stimulus measure. Provincially, Alberta likes to say the province has the lowest taxes in the country. While that is true for corporate taxes that larger businesses pay, several other provinces currently have lower small business tax rates with higher income thresholds.”
The experts agree. Reducing government red tape and stability is a necessary positive.
“In a challenging business environment, the most critical need for businesses is certainty,” the Calgary Chamber president says. “Governments can help manage rising costs, regulatory complexity and external market pressures by creating a stable policy environment that allows businesses to invest, grow and plan with confidence.”