The Budget Deliberations are over. The people of Ward 12 have been reaching out with their feedback and frustration throughout the process, especially with the long lead time on the fact that Council was going to be contemplating a 7.8% increase in residential taxes.

My responses, leading into the budget, focused on the affordability challenges we are facing right now collectively and the difficult situation that The City finds itself in.

I want to start by thanking everyone who has engaged in the process and filled out the Ward 12 Budget Adjustment survey that was sent out in our newsletter. It takes time to offer your perspective and feedback and I am grateful. It was particularly helpful to understand how you viewed the various priorities that were brought forward for funding in this adjustment.

I want you to know that I approached these budget deliberations with a lot of concern about how it would impact the community. Here is my close on the budget.

The shortcomings of the 2023-26 Service Plans & Budget:

This year's adjustment decision came immediately on the back of the 2023-26 four-year budget approval. This was a decision that I was happy to support, especially in its measured year-over-year increases. During that budget, there were a bunch of amendments, built in collaboration, to approve a package of one-time funding to keep our partners whole and fund important work. They all passed with 13-2 to 10-5 votes and came from across political perspectives. At that time there were certainly voices in the community and on Council that questioned the wisdom of the one-time funding, but it became the chosen path as Council looked to keep the four-year budget yearly increases low. Ultimately what that did was keep the margins extremely tight for The City to respond to emerging priorities and absorb the same inflationary pressures impacting everyone.

The four-year budget that Council approved already had an approved 3.4% increase in 2023 which translates to about a $7 dollar a month increase for the average homeowner ($610,000 property value). That was the line that many of my colleagues told their constituents and media that they wanted to hold, and they brought a battery of amendments to try and roll back the percentage increase. Even if all their amendments had passed it wouldn’t have dropped the increase by much.

The 1% tax share shift from non-residential to residential added in another 2% increase or $4 dollars a month. This item was the most controversial and also before Council last year. Ultimately, my colleagues decided not to shift the taxes last year during the four-year budget deliberations. This year, with clear evidence of its legislative requirement and previous decision points, Council approved the shift.

What you see above is a jurisdictional comparison of the tax share ratio. For every $1 of taxes residential homeowners pay, non-residential pays $4.26. With the adjustment Council just approved, that changed to bring the tax share more in line with other municipalities and counties.

Finally, the recommended adjustments added a 2.4% increase or $5 dollars a month. Together they add up to one of the largest single-year tax increases smack dab in a year where affordability is front of mind for nearly every single Calgarian.

Not a comfortable position and also not a sustainable position.

How did we get here?

Before I get into what Council approved in this year's adjustments, I want to go a bit further into the situation this Council finds itself in. Zoom the camera out a bit.

I have provided a more in-depth picture of the journey toward the financial situation of The City in my wrap-up blog after the 2023-26 budget deliberations under “The Foundation” section. I would encourage you to read it. Calgary has been reckoning with a new financial reality after the hollowing out of our downtown that necessitated a tax shift dating back to the early 2000’s.

That reality has led previous Councils, often very justifiably, to utilize extreme caution with the year-over-year increases to the budget as the shift was already adding pressures in and of itself. There were also other, less justifiable attempts (in my opinion) to push off the financial reckoning with programs like the Phased Tax Program. Instead of rebalancing and raising taxes in the face of those pressures, they utilized one-time funding to mute the impacts and kicked the can down the road.

Sound familiar? Yes, that is exactly what this Council did last year to deliver the proposed increases that it did.

Which leads us to this:

The average inflation from 2019-23 was 3.22% which hands a 2% cut to The City budget year over year on inflation without beginning to account for the pressures added by growth. We are the fastest-growing large City in Canada with the lowest yearly increases.

This has very real impacts on service delivery in Calgary and I offer Parks as an example:

The peak in 2016-17 was one-time money to aid in the disaster recovery support after the floods.

Our office has heard a lot from Ward 12 about the state of the parks and tree canopy this past year. We are actively researching why service levels are where they are, and these numbers are part of that work. Some of the story here is optimization through completing service reviews but the numbers also show a budget that hasn’t been keeping pace with the 21% increase in park spaces needing to be maintained.

Parks is not the only City service that has been cut back. In some cases, this is just good prudent financial management, in other instances, it is a lack of foresight. Housing, transit, mental health, and safety are all examples of where inattention has created costly problems for all of society and they take centre stage in the 2023 adjustments.

Spending Smarter

The importance of the adjustments before Council in 2023, while also considering the financial realities facing The City, eventually moved me into a position of support.

Let’s look at some of the larger adjustments that form the vast majority of the 2.4% increase:

Housing

Council just approved $90 million for capital programs, $81.5 million for downtown conversions and a land fund alongside $27 million into the yearly budget to allow Calgary to plan ahead and actively pursue partner funding. This is an appropriate response to the Housing Needs Assessment.

The City commitments have already unlocked $228 million in federal funding, and we are primed to apply for our portion of the provincial funding announcement of $497 million in province-wide housing investments (outlined in Budget 2023).

Studies show that we spend nearly $30 billion dollars a year on social services in Canada aimed at helping our homeless population. It is almost universally agreed that meeting the housing challenges head-on is far less costly and far more effective. This is smart spending that focuses on collaboration with the other levels of government. The current and proposed programs require municipalities, NGO’s and non-profits to take the brunt with little upfront funding and no increase to revenue streams of The City to offset the impact.

Transit

Transit is vital to building a financially, socially and environmentally resilient City. Without strong transit service, transit-oriented communities and development will fall further and further behind. The most financially productive city blocks are those that can build upwards. That requires public transit to both incentivize and meet policy requirements.

The adjustments advance transit in our City while also aligning with provincial indications that there is an appetite for a Blue-Line extension and airport connections. Each of these projects, alongside the Green Line, provide a better future for our City. They will not just address mobility and build our local economy but also incentivize the housing investments we need to see from industry.

This is smart spending with the long view in mind.

Safety

Council just approved funding to move the safety work on our LRT forward in a big way. The extra $15 million a year for this issue is directly connected to the long-term viability of our Transit system and was one of the highest-rated priorities for Calgarians as indicated by polling. It will also provide temporary relief and long-term support as we address the interrelated challenges of Mental Health & Addiction and the lack of housing.

This is smart spending to ensure our City is safe while the economic lifeblood of our transportation system remains whole.

These three buckets were by far the largest proportional increase to the 2.4% adjustment package at 1.3% combined.

As one of my colleagues so eloquently put it during budget, the best thing to do when facing issues, is tackle the issues.

Affordability in Ward 12 and Calgary

When initially contemplating this year’s adjustments my gut response was “no way, not right now”. The financial realities crashing over Calgarians are not lost on me and I would have preferred to report back that I held the line on any additional increase. Instead, I became convinced that the cascading issues we are dealing with right now would go under-resourced, pushing compounded costs onto our collective future.

I know that these affordability pressures cause great strain on each Ward 12 resident, but they absolutely crush those of us at the bottom of the socioeconomic ladder. Because of this, I felt a responsibility to push forward further work to address this situation.

I look forward to working with my colleagues, local agencies and other partners to ensure that we do more to intervene alongside those who need the help the most. We have added insult to injury with our Local Access Fee (LAF) calculation in these inflationary times. You can find more about my thoughts on that here and I want you to know that I will be part of a push on December 19^th (Council meeting to address the LAF) to change this situation.

Ultimately, The City averages roughly 11% of every Calgarian's tax contribution to the three levels of government but we see and deal with most of the impacts every day. We have the most limited and regressive revenue tool in property taxes, and we send 35% of those property taxes to the province.

Hopefully, you can see from what I have shared that it really was a process of weighing the long-term implications of the adjustment decisions with the pain that each Calgarian will feel with this increase.

The Path Ahead

My campaign pillars are still at the core of my priorities.

I will continue to champion Spending Smarter throughout The City. There has been a lot of feedback this week that The City doesn’t have a revenue problem but a spending problem. My experience to date has been that revenue issues make up the biggest portion of the problem, but I am absolutely willing to continue pushing for better service optimization and scrutinize spending. To that end, in my role and capacity on the Audit Committee, I will be commissioning a new Service Optimization report from Administration.  

I will continue to prioritize Growing Jobs & Opportunity and that priority pillar undergirds my decision to support the 1% tax share shift this year. This will impact the long-term economic outlook of our city and help us all thrive.

In the approved adjustments you can find spending directly connected to Improving Livability on key Ward 12 issues. I will continue to advocate for livability issues as our thriving is interconnected with the incredible quality of life that we enjoy here in Calgary.

I look forward to sharing how these policy pillars will branch out for myself and the Ward 12 office in the years to come.

Thank you for your continued partnership,

Evan Spencer

Cllr. Ward 12