Calgary city administration said it needs more money from property taxes to maintain city services in the next budget due to population growth and inflation concerns.
The city needs the average revenue generated by property taxes to increase 3.65 per cent annually over the next four years, according to administration.
On Wednesday, councillors voted in favour of placing a cap on the increase to average property tax revenue.
“If we don’t set boundaries, the world is their oyster,” Ward 1 Coun. Sonya Sharp said. “We don’t have blank cheques, and neither do Calgarians; so we needed to set a ceiling, not a floor.”
Despite the forecasted increase in property tax revenue, Calgary’s mayor said the budget is on par with last year, but inflation and population growth factored in.
“Since we have not had a full unpacking of the budget, what we’re recommending is that we don’t increase the budget over what it was last year,” Jyoti Gondek said. “So that’s essentially what you’re getting.”
According to city administration, the Consumer Price Index inflation for Calgary was at 8 per cent in May; the highest it’s been since December 2002.
The latest information and expectations on rate policy decisions by the Bank of Canada indicate annual inflation is expected to average 5.6 per cent in 2022, administration said.
The revenue cap does not include potential budget requests from several city departments like Calgary Transit and the fire department, which would be coming to city council for a decision in November.
“Now is the time for administration to be bold, think outside the box, be innovative,” Sharp said. “If that means you have to find inefficiencies in the organization, take things out and put things in; council needed to set a direction today.”
How the increase in population and inflation will impact individual property tax bills is yet to be determined, as the numbers presented to council on Wednesday are expected to change before November.
According to city administration, even if property tax rates decline this year, a homeowner’s bill could rise if the assessed value on their home increases.
“We will probably generate enough in property taxes so that the portion of the budget that has to be covered by property taxes can be covered without an increase to your property tax rate,” Gondek said.
A survey of Calgarians conducted by the city, presented to council as part of Wednesday’s meeting, showed half of Calgarians are in support of a small property tax increase to maintain city services.
That same survey also showed about 53 per cent of Calgarians feel they’re getting “good” value for their tax dollars, while just under half of respondents said they trust The City of Calgary.
“We understand it’s a very tough time,” Gondek said. “But we understand that there’s inflation and population growth to account for.”
Administration is also recommending a fee increase for waste and recycling removal and wastewater.
Waste cart program fees are expected to increase $0.70 per year over the next four years, which would cost homeowners $27.10 per month by 2026 for blue, black and green carts.
However, disposal rates and charges at city waste management facilities are expected to stay the same through to 2026.
Administration said wastewater collection and treatment fees are expected to see an annual 2.5 per cent hike over the next four years.
Based on the city council’s decision, administration will now build the proposed 2023-2026 service plan and budget, which city council will help craft during deliberations in November.
“The City is committed to continuous improvement, including finding efficiencies throughout 2023-2026 to help protect against future cost increases,” a City of Calgary statement said. “Council’s decisions today ensure the city collects only as much tax as is needed.”