Calgary city councillors heard that even with the proposed tax hike already baked into the budget, it won’t be able to meet the needs of a growing city.

With that, the City of Calgary has proposed preliminary 2025 property tax and fee increases that total about $13.95 per month for the typical residential property.  (Subject to finalization of property assessments.)

After several hours behind closed doors at Monday’s Strategic Meeting of Council, Calgary city councillors emerged publicly to hear city administration say they’d need just short of an additional one per cent more from property tax. Further, increases to water and wastewater and waste and recycling to reach that total amount.

City of Calgary Chief Financial Officer Carla Male outlined the significant growth pressures in the city, with an additional 69,000 people estimated to have arrived in Calgary between April 2023 and April 2024. She said the population increase outpaced their best economic forecasts.

“We must increase our expenditures to sustain our services,” she said.

“It’s simply not possible to absorb that many new Calgarians during a time of significant inflation without either having costs increase or services decline.”

Calgary city council had approved a plan to keep the overall property tax rate at combined 3.6 per cent as a part of the original four-year budget (5.5 per cent for residential, 1.4 per cent non-residential). At Monday’s meeting, admin proposed an additional increase in property tax revenue of 0.9 per cent to cover adjustments ($1.90 per month). That, plus previous tax approvals (3.6 per cent) and the tax shift, mean that typical homeowners ($700K property value) would pay $8.86 more in 2025.

Then, $5.09 is added for water services and waste and recycling to cover growing costs on that service budget line.

Male said that property tax revenues would need to increase between $100 million and $170 million in 2025 above the previously approved tax increase to catch up with growth.

“We recognize that catching up in one year would mean a tax increase of over 10 per cent and we do not believe that is palatable or in the best interests of Calgarians,” Male said.

Take it back to constituents: Councillors

In the proposed budget adjustments, city administration included cash to cover capital cost escalations, maintenance and critical repair of infrastructure, housing and matched funding. They also focused on alternative funding sources for the Green Line, housing, civic census, 911 improvements and transit peace officers, along with various other smaller programs.

New tax supported increases were in the transit, public safety, and other services.

Recognizing that this is only the starting point of a two-month budget process, one that results in an approved budget in November, councillors said that they were thankful they had to opportunity to talk about the priorities in this preliminary update.

“Thank you for giving us this way ahead of November, because now the onus is on us as policymakers and elected officials to go talk to our residents and find out what is most important for them,” said Ward 5 Coun. Raj Dhaliwal.

Ward 1 Coun. Sonya Sharp said that having two months provides a runway for difficult conversations.

“I think what I look forward to in the next two months is working with my constituents and Calgarians and focusing on the things they really want us to invest in now,” she said.

Still, Sharp does think the proposed increase is too high. She said it would be up to councillors to bring forward potential cost-cutting proposals to shave the proposed tax rate down.

“We just keep increasing costs to Calgarians on top of the bottom line of their everyday costs. So, this isn’t something they’re going to be OK with,” Sharp said.

Mayor Jyoti Gondek said having the time to talk with Calgarians was the point of changing the budget process two years ago. Before, they would get a document just before the budget and make changes over two weeks.

“Now there’s increased transparency, and there’s a much better opportunity for members of council to go out and connect with the public, and for the public to have feedback on what they’re seeing,” she said.

Mayor Gondek said she understands that it’s a good political talking point to cut property taxes – no one wants them raised. There’s a responsibility to deliver services to Calgarians, and as things cost more, with more people moving here, services haven’t kept pace.

“We are at a bit of a reckoning moment. We can see that not investing in maintenance and repair and replacement of infrastructure will cost us dearly,” she said, noting the June 5 water feeder main break.

“I do think that councils passed have neglected what needed to be done, and I believe we spent a long time patting ourselves on the back for having the lowest residential property tax in the country, and we can see what that’s done.”

Still unclear in all of this is the impact of Green Line wind-up costs, which will be presented to Calgary city council on Sept. 17. The mayor said they’ll learn more about those costs, but won’t know the budget impact until November.