Construction season paved the way for a pricey start to 2025, but the City of Calgary reported that its spending and surplus are on par with previous sums, leading some councillors to question how the municipality manages its money. 

Calgary’s Chief Financial Officer, Les Tochor, provided an update at the July 22 Executive Committee meeting, where he announced that as of June 30, the city has spent approximately 32 per cent of their $2.7 billion capital budget.

Tochor said that this was not a surprise.

“Capital spend rates increase significantly in the second half of the year due to seasonality of the construction industry.”

Naming renovations to the Calgary Soccer Centre, Tuxedo Park, Fourth Avenue flyover, and Mission Bridge as cost drivers, he added that the city’s water treatment plants also needed updating to begin the reintroduction of fluoride into the city’s water suply. 

With several projects still underway, Tochor said that the city anticipates the year-end spend rate to reach 101 per cent, and that figure represents the flexibility to rearrange money where it is needed most. 

“That number, being larger than 100 per cent, would reflect the city’s ability to move dollars from a future year to be spent in the current year,” he said.

What they are unable to do, as Calgary’s Chief Administrative Officer David Duckworth stressed, is put 2025’s forecasted operating variance of $175 million toward items concerning future calendar years. 

“Municipal governments are not allowed, in accordance with legislation, to have an operating deficit or negative variance. Unlike provincial governments and federal governments,” he said. 

Mayor Jyoti Gondek said that the city had to allocate it to something, and some councillors raised concerns over why spending needs to be high to begin with.

City calls variance ‘favourable,’ councillor says it’s anything but

The city’s Corporate Planning and Financial Services team cited revenue hikes from investment income and minimal expenditures as having contributed to Q2’s favourable operating variance of $221 million, according to their report.

Making up the biggest bulk were corporate programs with $162 million and an increase in investment income, which totalled $126 million. Corporate contingencies defined the remaining variance of $36 million, as the city tied a portion of this to revenue gained from fines and penalties.

By the end of 2025, Tochor estimated that the operating variance will sit at $175 million. He said that the one-time variances of investment income, corporate contingencies, and budgeted salaries will be neutralized by the Calgary Police Service’s unfavourable fine revenue of $28 million.

Ward 13 Coun. Dan McLean said that a positive operating variance is synonymous with surplus—the figure remaining after satisfying expenses. In turn, he said that having a surplus means that people are getting taxed too much, and that his constituents are fed up. 

“I’m getting calls and emails from residents that are all opening up their tax bills, which have gone up substantially,” he said. 

“It’s time to quit raising taxes.”

According to the City of Calgary, the median residential property tax has increased by almost 23 per cent since 2021. Coun. McLean recommended that the city put time into organizing its accounts before asking residents to pay their share. 

“Let’s just kind of manage your business a little more thoughtfully and maybe look within for some spending cuts,” he said. 

“Rather than just keep going to the taxpayers, the piggy bank.”

Coun. McLean said that he feels that the city’s problems lie in its spending, not its ability to generate revenue.

Rebuking that position, Mayor Gondek said more accurate forecasts are needed, but during a period of economic instability solutions are not always apparent.

“One of the things that we have not done well is give people certainty and predictability based on strong forecasting models,” she said. 

“This is something that I have asked finance to fix.”

Trying to expect the unexpected: Tariff impact on Calgary

On March 4, the United States imposed a 25 per cent tariff on steel, aluminum, and foreign-made vehicles, as well as a 10 per cent tariff on energy.

By May, Calgary experienced an $11,000 impact, just weeks before the U.S. again doubled the steel and aluminum tariffs.

During July’s Executive Committee meeting, Calgary’s Director of Supply Management, Amit Patil, announced that this number has grown to approximately $95,000.

“That includes equipment such as traffic control equipment, video surveillance equipment, and some of the corporate inventory,” he said.

Despite the procurement team’s achievement of signing almost 500 contracts with just over 99 per cent of the value going to Canadian suppliers, the city’s Corporate Planning and Financial Services team noted the continued impact of tariffs as a major threat to city funds. 

“There is a significant risk in the economic forecasts, due to the constantly evolving policy environment in the United States,” read the report.

“Economic performance may be significantly better or worse than currently forecasted, depending on decisions in the coming months.”

Sparked by discussions during the G7 Summit, Patil referenced Prime Minister Mark Carney’s who said that new trade deals between Canada and the U.S. are expected to be announced, but said that tariffs are likely to remain for the long term.

“We are prepared for this long-term scenario, and to execute our supply chain resilience principles in our daily procurement operations to manage the risks.”