Calgary city councillors will begin charting the budget course for 2025 and councillors anticipate some uncomfortable conversations.

Monday’s Strategic Meeting of Council brings with it a preview of mid-cycle adjustments to the 2023-2026 service plans and budgets. It will be a largely closed-door session of council. Overlaid on the budget adjustment is Calgary city council’s commitment to stay at a combined 3.6 property tax increase for 2025 (5.5 residential), and 3.1 per cent (5 per cent residential) for 2026.

Councillors won’t be making final decisions on the budget until November, but this discussion sets the stage for those conversations, ones that will require a balanced approach, according to Ward 7 Coun. Terry Wong.

“I think there’s two sides of the equation, one of which is Calgarians are challenged with affordability,” said Wong.

“Calgarians have often asked us to keep our tax rate increases at a minimal rate. At the same time, Calgarians are looking for a better quality of life or quality of service, addressing some of the priorities that even we heard today.”

Wong said that every councillor is going to have discretionary things that they’d like to push forward.

“We have to balance that against Calgarians wishes for affordability, and making sure our taxes are not increasing beyond what they can afford,” he said.

In the City of Calgary’s mid-year progress report, presented to Executive Committee on Sept. 4, it showed the City’s comparison of property tax affordability compared to other cities. It is based on a percentage of household income spent on municipal property taxes.

Calgary was first at 2.2 per cent, with Toronto at 5.9 per cent.  Winnipeg and Edmonton are closer to Calgary, at 2.6 and 2.9 per cent annually.

According to Statistics Canada data from 2022, and presented in April 2024, the median after-tax income in Alberta of families and unattached individuals was $82,700.  In Manitoba it was $66,900, and in Ontario it was $74,600.

The City of Calgary also showed a $117 million mid-year operating surplus. Seventy-five per cent of that was to be committed to the Green Line. It’s unclear what the future of that commitment will be moving forward, though it may be needed to cover the wind-up costs for the project.

Growth pressures persist, says Coun. Walcott

In the mid-year progress report, the City of Calgary also reported that population growth and inflation are outstripping spending. Meanwhile, overall citizen satisfaction is falling.

In the City of Calgary’s 2024 spring survey of Calgarians, perceived value for property taxes hit an all-time low of 44 per cent satisfaction, down 20 per cent from 64 per cent satisfaction in 2015.

Further, the perceived change in quality of life was relatively stable from 2015 to the spring of 2023, when the number of respondents who said their quality of life worsened, jumped 10 per cent. Coincidentally, in 2023 and 2024, property taxes rose 5.9 per cent and 8.6 per cent (2024), respectively. It was also in the midst of an overall affordability crisis with food, housing and general cost of living spiking.

As of April 2024, Calgary’s population is estimated at 1.492 million, or a 4.9 per cent growth over the prior year.

“We continue to do our best to meet the needs of Calgarians with the resources we have.” said Carla Male, Chief Financial Officer at the City of Calgary. “However, as our costs and our population grow beyond what we planned for, it becomes increasingly difficult to maintain service levels without adjusting the budget.” 

Ward 8 Coun. Courtney Walcott said that not so long ago, a two-million population projection for Calgary was 2035. Now, it could be in a few years.

“So, these conversations have changed everything, and they have to be front of mind for us, because if we think that everything’s going to work as simply as it was, just with that many more people calling Calgary home, then that’s an unrealistic expectation,” he said.

“I hope that conversation that we have on Monday is grounded in realistic expectations.”

Ward 1 Coun. Sonya Sharp said that the city is quite leveraged right now, with not much movement in the budget.

“I’m expecting that there’s going to be a lot of uncomfortable conversations from now until the end of November,” she said.

Given the growth pressures, it is realistic to keep a lid on property tax increases? Coun. Sharp thinks so.

“I believe that it’s possible to stay within that. I’ve also been in the mindset is, we should have been below it,” she said.