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Ward 1 News: 2015-2018 Strategic Plan and Budget

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Ward 1 official website
Dear Residents,
Next week, I will be meeting with my colleagues on City Council for what will be one of the most difficult budget discussions in the history of The City of Calgary. Calgary has experienced a number of major events in the last year and half: the worst flood in Alberta’s history, Calgary’s worst winter in over 100 years, and the recent Snowtember event that has left The City with $67 million in recovery costs. These events, as well as unprecedented population growth of almost 40,000, have put The City of Calgary in a challenging fiscal situation. This will affect Council priorities and result in some very difficult decisions regarding The City’s $22 billion budget over the next four years.
My position
In September, I voiced my concern about the impact the current indicative tax increase could have on residents. While there are additional factors influencing our costs, I firmly believe that the proposed 4.7% tax increase is too high. The property tax increase, combined with rising utility costs, will have a sizeable effect on families; seniors, single parents, and residents that are on fixed incomes will be especially vulnerable. We must do what we can to minimize the overall impact on citizens.
Regardless of The City’s challenges, I will exercise a tremendous effort to reduce the tax increase as much as possible. This includes finding efficiencies in how The City does business and identifying opportunities to reduce spending. Transitioning some services to third party contracting will also provide citizens with better value for their tax dollars. I continue to support The City of Calgary’s zero-based review program, which has helped find opportunities to reduce costs. For example, the recent review of our Parks department identified significant savings by contracting out more maintenance and operations work.
The current situation
A 4.7% tax increase equals an additional $6.75 a month for the average home in Calgary, amounting to $81.00 a year[1]. The total tax bill in 2018 is expected to be $1,936 for the average home, a total increase of $324 from 2015 to 2018. In September, I wrote that the indicative tax rate is not a final number, and could possibly change after this month's discussions. That said, even with a 4.7% tax increase we are still facing potential cuts to some city services.
Why are we facing potential service cuts?
Calgary has grown much faster than expected. Since The City of Calgary initiated Action Plan, Calgary’s estimated population growth more than doubled from 19,000 new residents a year to 40,000. This is accelerating The City’s need to invest in infrastructure, which will come with additional operation and maintenance costs. At the same time, grants and transfers from the federal and provincial governments have not increased, leaving The City searching for ways to pay for the cost of growth.
How are the other orders of government affecting us?
Most tax dollars go to the higher orders of government, who provide comparatively less in services. For instance, the federal government receives 45.7% of all taxes paid by Calgarians but is responsible for only 25.7% of all service expenditures. By comparison, The City of Calgary only receives 13.5% of taxes paid by Calgarians but is responsible for 18.9% of all expenditures. This means that The City receives less tax revenue than is needed to cover the cost of services provided [2].
The provincial and federal governments have historically transferred funds to local governments to help pay for services. Transfers from higher orders of government have been declining, but the services The City of Calgary is responsible for have increased. The continued gap between our revenues and expenditures, lack of transfers from higher orders of government, and significant growth pressures all have negative effects on The City’s ability to provide citizens with adequate services.
Where do we go from here?
Starting on November 24th, City Council will be reviewing input received from citizens through e-mail, letters, phone calls, and electronic feedback submissions. Along with Action Plan’s five priorities, this will guide City Council’s decisions regarding The City’s four-year budget.
Throughout next week, I will be posting updates on my website so that my constituents remain informed of the choices that City Council is making. It is important that citizens are informed and we remain transparent throughout the process, as many tough choices will be made. Some programs will likely suffer cuts, and I realize that there will be many disappointed citizens. However, I hope that my colleagues and I can collaborate to reach the best possible solution for Calgary and limit the potential effects risings costs will have on our citizens.
[1] Based on 2013 median assessment of $430,000 for a single residential home.
[2] Numbers taken from A Case of Vertical Fiscal Imbalance – The Calgary Experience

This content represents the personal views and opinions of the Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.

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