Calgary city council is meeting next week to debate adjustments to its four-year budget, and a list of proposals that could see property taxes increase nearly eight per cent next year.
Eyeing the potential bump to their monthly tax bills, some Calgarians are questioning previous claims from city officials around the agreement to build a new event centre and that funding it wouldn’t impact property taxes.
“There’s nothing fiscally responsible about corporate welfare,” Peter Oliver with Project Calgary said. “To in one breath make a decision to commit millions in public funds for a for-profit sports team, and then in the next breath say that we don’t have money for services and investments for everyday citizens, I think that’s really disingenuous.”
The agreements between the City of Calgary, Calgary Sports and Entertainment (CSEC) and the Government of Alberta to build the new event centre and Culture +Entertainment District were officially signed last month.
As part of the agreement, the city will pay $537 million up front to build the arena, parking, a plaza space and a quarter of the attached community rink. CSEC will pay $40 million up front and pay a $17-million annual lease payment that will rise by one per cent over the next 35 years.
Since the deal was publicly announced earlier this year, city officials have maintained property taxes wouldn’t be impacted by the investment.
Ward 1 Coun. Sonya Sharp, who also chairs the city’s Event Centre Committee, said that remains the case entering budget talks next week even with the proposed 7.8-per cent tax increase.
“Hypothetically speaking, if we were to cancel the event centre project, that number would not change next week,” Sharp said.
“I think what’s important is everyone understands what operating (funding) is, what one-time (funding) is, and what capital spending is.”
In a statement to Global News, city administration said the funding for the event centre was appropriated in the previous budget cycle in 2019, and that the city funding is being sourced from “reserve and working capital accounts.”
The city has several types of reserves, and each is approved by council in a report that identifies its purpose, conditions, restrictions and funding source, with much of the funding in those reserves already committed to existing projects.
“None of the current funding sources identified for the event centre project and district-wide infrastructure improvements will result in an increase in municipal taxes or new debt to the city,” the statement said.
Sharp said the proposed tax increase is due to several proposals to increase the city’s operating spending, ongoing annual funding that goes towards various city services.
“You can’t use one-time funding for things like increased peace officers or enhanced snow clearing,” Sharp said. “So what Calgarians are actually seeing is an increase in operating.”
However, University of Calgary economist Trevor Tombe said the city’s claim the event centre won’t impact taxes is “misleading.”
“It’s important to separate the accounting from the underlying economics here. Public funds have value and they have alternative uses,” Tombe told Global News. “So funds used for the arena could have been used for other initiatives, other projects for the city.”
Tombe said the city’s choice to allocate public funds towards one project means that it is foregoing the opportunity to use it towards others, which in turn could impact the taxpayer.
“Those funds could have been used to either cushion the increase that we’re seeing or help offset some of the costs of different initiatives,” Tombe said.
“Any distinction between capital and operating are just self-imposed constraints that may have value in a governance sense, but we shouldn’t allow that to distract from the underlying choices that are being made by our municipal government.”
Tombe noted there are potential benefits from the project compared to the cost, depending on how much people value non-economic benefits, whether that is improved experience at a hockey game or the revitalization of Victoria Park.
City council will begin debating the budget adjustments next week, which will begin with a public hearing on Monday at city hall.
Oliver and Project Calgary are encouraging people to show up and have their say on where city councillors allocate funding.
“No one’s going to come along and privately fund transit, no one’s going to come along and privately fund affordable housing,” Oliver said. “I think most people understand that, especially in times like these, these are the kinds of investments we need to be making.”
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