A Big Day to Wrap Up Council Session
Monday and Tuesday’s Council meeting will be yet another big day at Council. We’ll be discussing, among other things, the event centre, the Green Line, and the Mental Health and Addiction Strategy. All of this comes on the heels of our discussion this past Monday to cut $60 million from the City’s operating budget.
Let’s be real – this timing stinks. It is 100% reasonable to ask what the heck Council is thinking, bringing forward an agreement on a new arena, talking about spending on other projects, all while reducing the budget by $60 million.
But we have to continue doing our work as a City on multiple fronts. The big picture remains to continue to build a great community while maintaining our position as the best place in Canada to start and grow a business.
First, the $60 million in budget reductions. For months, Council has been trying to grapple with the very complex problem of many businesses experiencing huge tax increases as a result of the value of the downtown buildings collapsing. Many, many ideas were brought to the table but ultimately, Council rejected everything that was before them. In June, after the property tax bills had already gone out, we created a new option, which included reducing our annual operating budget by $60 million and passing those savings to business properties, as well as a large rebate. This resulted in a net 10% decrease in business taxes.
This is the third straight year we have put one-time money towards buffering against this tax distribution issue. In total, we’ve allocated more than $150 million (plus this year’s $60 million) to providing relief – and rightfully so. We needed to protect businesses as much as we could. But the bottom line is, this problem isn’t going away and we can’t afford “one-time” solutions every year. We need to address the structural problems.
While talking tax reform is part of it, a huge part of solving the structural problems means making improvements to the heart of our city. We can do this through investments in our city and we can do this through reducing our operating costs. I know it’s hard to reconcile spending and saving at the same time, but we have to be able to walk and chew gum to adapt to this economic climate.
Investing in our city
For years, the downtown has been a juggernaut, punching far above its weight in terms of property values. As a result, our taxes have remained comparatively low. The downtown won’t return in the same form it once was, but part of the solution to this overall non-residential tax issue is focusing our attention and resources to help raise the value of the downtown buildings to a sustainable level. We’re working with our community partners like Calgary Economic Development and Calgary Municipal Land Corporation on a broader strategy for the downtown that gets people working, living and wanting to spend time in the core.
That is one reason I’m supportive of this agreement for the events centre. But I also want to be clear — the deal had to make sense on its own merits. I know what all the literature says, and I know economic benefits of arena projects are often massively oversold.
The events centre, along with BMO, Arts Commons, the Central Library, and the National Music Centre help anchor a stronger cultural district on the east side of the core.
Let me be totally clear, the events centre is not going to solve our economic woes, but it can act as a catalyst to speed up development. We’ve taken a very conservative view, suggesting that it might accelerate the build out of Victoria Park by 10%. It won’t lead to new development by itself, but it will help some of that development get built quicker.
The deal also has direct financial return to citizens through the collection of a facility fee and a portion of naming rights. This doesn’t mean it’s an economic windfall for the city but it does mean we can quantify the real cost of our investment: something many other cities don’t do.
As I’ve always said, public money must result in public benefit and I think this deal accomplishes that.
There has been talk recently about putting a formal pause on the project. We absolutely need to get this project right but we absolutely cannot hit pause.
The Green Line will be the largest infrastructure project in Calgary’s history. With something of this size and scale, of course we need to take the time to evaluate our current context, test our assumptions and make changes as necessary. But we need to be very clear about what we’re talking about.
We are talking about the 4 km stretch across the river and through the downtown. We are not talking about the 16 km heading south to Shepard (which is ready to go to market) and we are certainly not talking about changing the entire alignment. Thousands of Calgarians built this vision with us, and we owe it to them to deliver on that vision.
My colleagues on the Green Line team have done the right thing. They have spent the better part of a year doing constructability and affordability reviews on the project and they came back to Council to say that, as a result of working with industry and running and rerunning the numbers, their thinking has shifted. They suggested rather than having one contract for the whole project, we should split the contract – one for the 4 km through downtown, and another for the 16 km in the southeast.
This makes sense. It will allow for more local companies to take on this work, and it will also allow the southeast contract to go out now while we go back to Calgarians to talk about the stretch between 16 Avenue N to Ramsay. The project will still be delivered all at once, but splitting the contracts allows for competitive bids on both parts of the projects.
I am absolutely committed to getting the downtown right, and we will do that over the coming months. I am absolutely committed to future phases of this project, and getting transit to people in the north in particular. But asking for a formal pause on this project risks the project itself, and there is no way I’m willing to put this city-building, quadrant-spanning public transit project at risk. The funding from all three orders of government is already in place.
Some will say this is the wrong time to build the Green Line but I could not disagree more. Now is exactly the right time to get building. The Green Line will create 20,000 direct and indirect jobs at a time when Calgarians need them. Through the enabling works projects we’ve been doing to prepare for construction, nearly $130M worth of construction contracts have already gone out, with $50-70M more to come this year. Every year that we delay this project will cost about $50M, which means the scope of the project shrinks. I would argue there is no better time to build than now.
Mental Health and Addictions
As we have all of this discussion on the projects that shape the city, it’s easy to overlook the other crucial item that’s coming to Council next week – the City’s Mental Health and Addictions strategy.
When it comes to the strategy that we’ve been working on with the community for over a year, some have argued that this falls into provincial jurisdiction, and that’s true specific to the healthcare element. There’s no doubt that we need to work closely with our colleagues at the Government of Alberta to address this issue. But the community has told us loud and clear that we need to take action now in all of the other agencies and areas that this very real problem affects our city. We need to determine where the gaps are in Calgary’s system so we can better serve those dealing with mental health and addiction issues. We need to address the root causes of these problems so that we can help people and make our communities safer.
We have a chance to work with the people and agencies that have first-hand knowledge and are already helping to solve this problem. There are Calgarians that are willing to step up and take leadership over this work. I believe that, as this important work happens, coordination and accountability are key to ensuring it is all successful. And I believe that supporting the recommendations that the committee voted against is the way to do that.
We can talk about the city we want to be, or we can build the city we know we can be. There’s no doubt we have to address issues that are right in front of us but we also have to be thinking into the future.
Categories: Better economy, Budget, Calgary Transit, Housing, Poverty, Stronger communities