The COVID-19 pandemic has hit the city hard over the past 20 months, and on Tuesday Calgary city council’s executive committee heard just how hard that hit was.
With a 7.4 per cent contraction, Calgary’s economy is facing its worst recession since the mid-1980s.
In percentage terms, medium-sized and large enterprises have been hit the hardest, with 11 per cent of enterprises with more than 200 people closing, five per cent of medium businesses — with 50-199 workers — shuttering and four per cent of micro enterprises — smaller than 10 — ending operations.
According to city officials, the economy is back to 2014 levels and would be 15 per cent larger today if it had continued at a two per cent growth rate.
Business insolvencies were also up in 2019 after falling steadily since 2011.
At the height of the pandemic, Calgary’s unemployment rate was the highest in 34 years of data.
But it wasn’t all bad news: most of the activities the city previously planned are now underway.
Those fall into five broad areas: city-building investments, creating an enabling environment for business investment and innovation, direct support for innovation, investment in community economic well-being, direct spending and investment or taxpayer relief to support the economy.
“One of the things that we’ve been very good at as a city is supporting our small and medium-sized businesses, and we will continue to do that,” Mayor Jyoti Gondek said.
“We know that that’s the driver of our economy.”
She characterized Tuesday’s report as a “snapshot in time” and instructive on how to get out of the recession, including with expert advice.
Ward 14 Coun. Peter Demong said motions like the declaration of a climate emergency are ways to encourage investment in the city.
City services are just as important for businesses as tax rates are, Demong said, adding cuts to those services for budget reasons can have knock-on effects.
“Tax rates are a very important factor, but (businesses) also look at the amenities, the services that are provided,” Demong said. “And those are what a lot of businesses are talking to me about, saying ‘Make sure that these services are not suffering so that my people are still happy living here in Calgary while they are employed by my business.’”
Calgary city council will be deciding on budget adjustments for 2022 in late November, and on Tuesday got a first look at the long-range financial plan through 2032.
“The (long range financial plan) recommendations are around the strategies and the tactics,” Calgary CFO Carla Male said. “So not necessarily around the numbers because the numbers inform what those strategies and tactics are.”
Demong, citing the relative inexperience of his fellow councillors, moved that the planning process be delayed to a strategic meeting of council in early 2022. The committee unanimously voted for the deferral.
That’ll give the 11 new councillors — only two of which with prior terms on council — time to digest which and how much of the five scenarios to act upon for the coming decade to address what could be a $250 million gap in revenues if nothing changes.
Ward 8 Coun. Courtney Walcott said he was “grateful we’ll have an opportunity to spend a day together learning the nuances of that work.”
“We’ve been on the job for two weeks and we’re setting the standard for 10 years, given that we haven’t even gotten to the point of doing a mid-cycle adjustment yet,” he said.
“Even just being able to sit down with other councilors and learn about what the strategic plan is for the next decade will inform every oncoming mid-cycle adjustment.”
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