The City of Ottawa is proposing a draft operating budget of nearly $4 billion as the nation’s capital seeks to offset COVID-19’s impacts on transit and other key municipal services.
The budget presents an overall focus on maintaining critical services to ride out the novel coronavirus pandemic, with a few targeted investments in areas such as affordable housing and roads.
Mayor Jim Watson said in prepared remarks at Wednesday’s special meeting of council that the proposed budget “mirrors the economic and social uncertainty” of the ongoing pandemic.
City council received a draft operating budget of $3.94 billion and capital budget of $781 million for 2021 on Wednesday.
The draft budget maintains the 3.0 per cent cap on tax increases. As result of this coming year’s planned tax hike, the average urban homeowner would pay an additional $115 on their property, the average rural homeowner would pay an additional $88 and the average commercial property would pay an additional $231.
Property taxes would fund 47 per cent of the city’s proposed operating budget.
Watson said the city is forecasting a deficit of $153.5 million in fiscal 2021 tied to the novel coronavirus pandemic if it lasts another 12 months.
Almost half of that deficit — $72.9 million — is tied to expected dropoffs in revenue due to lower transit ridership, according to Ottawa’s chief financial officer Wendy Stephanson.
Ontario municipalities are not allowed to run deficits at the end of the year, but Watson said he expects the federal and provincial governments will help “make whole” the city’s budget gap in the coming year.
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City manager Steve Kanellakos said Wednesday that Ottawa has a backup plan in case, for whatever reason, support from upper levels of government falls through. That would likely involve dipping into reserves, slashes to spending on capital projects and possible service cuts, though Kanellakos emphasized maintaining service levels for residents is the city’s top priority.
Ottawa has so far received $124.2 million in federal-provincial funding through the Safe Restart Agreement and has applied for the second round of funding to meet the remainder of its $181 million deficit in 2020.
LRT remains high priority in uncertain times
Under the proposed budget, Ottawa’s city-run long-term care homes would receive $15 million in new staffing resources and personal protective equipment to reduce risks associated with the pandemic, plus another $9 million for renovations.
The city also plans to hire 14 new paramedics in the year ahead.
Ottawa will freeze the cost of its EquiPass, EquiFare and Community Pass programs for lower-income transit riders in 2021, while regular fares would increase 2.5 per cent as of Jan. 1, 2021.
Ridership has remained low since the start of the pandemic, and city staff reaffirmed Wednesday that it’s not certain if or when transit revenues will bounce back amid the COVID-19 crisis.
Nonetheless, Watson stated his continued support for investments in light-rail transit when speaking to media after Wednesday’s council meeting.
He asserted that residents and visitors will still have cause to head downtown even if companies vacate the city core post-pandemic, and said fast-growing parts of the city such as Kanata, Stittsville and Barrhaven deserved to be connected to the city’s LRT line.
“There’s lots of doom and gloom predictions that ridership won’t go back to pre-COVID levels,” Watson said. “We’re in the long game when it comes to transit.”
Amid other high-ticket items proposed in Ottawa’s 2021 draft budget are:
- A $13.2-million increase to the Ottawa Police Service budget including the hiring of 30 new officers;
- $98.1 million for Ottawa Public Health, representing $74.1 million in base funding and $24 million in one-time funds;
- Infrastructure spending, including $45 million for road resurfacing, $28 million to renew road infrastructure and $40 million to support rural infrastructure, plus another $57 million to fund road growth projects;
- $12.6 million for cycling and other active transportation projects;
- $15 million in capital spending on affordable housing, added to an external $32-million grant from the federal government’s Rapid Housing Initiative;
- $33 million to support community housing and homelessness programs;
- $3 million to retrofit city facilities to reduce costs and greenhouse gas emissions.
Public delegations can provide input on the draft budget at any of the city’s standing committees or boards in the coming month.
The final 2021 budget will be approved at the city council meeting on Dec. 9.
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