Calgary city councillors will continue charting out the budget path for the next four years, with the threat of potentially devastating infrastructure issues anchoring the debate.

The 2027-2030 Strategic Priorities – Council Working Session is scheduled for Jan. 21, the second of five meetings over the next several months to finalize the budgetary direction of the current city council.

The current year (2026) is the final year of the previous council’s four-year budget, and this council will set the agenda for the next fiscal quadrennial.

“Once the Strategic Priorities are received, the internal planning budgeting process can proceed in earnest as Administration makes its best effort to respond to the priorities,” reads the city administration document outlining the meeting.

“They will be used to shape the 4-year plan and budget so that the areas of highest priority receive strategic funding to achieve measurable changes in the community.”

While the last Calgary city council had already embarked on a $1.1 billion spend on water infrastructure in the wake of the June 2024 Bearspaw South feeder main rupture, which was subsequently reaffirmed by the current city council, the Dec. 30 Bearspaw break exacerbated and exposed further issues in Calgary’s capital spending and infrastructure management.

The sting of yet another major failure continues to dominate budget conversations.

Calgary Mayor Jeromy Farkas said on Jan. 13 that on Dec. 30, “the world changed.”

“It showed that passing the buck to the next generation does not pay, and avoiding the problem in the first place just means that tomorrow we’re just chasing the next crisis,” he said.

“So, this is very clear to me as mayor, but hopefully as a council, that now is the time for us to confront these hard truths, to deal with these problems with the immediate urgency that they expect, and also to fund essential infrastructure, fund essential maintenance, because we cannot afford to just pass the buck through the next generation, to pay significantly more.”

More than just water to worry about

A recent report at Calgary’s audit committee elevated Calgary’s capital infrastructure situation to the highest possible risk level. It stated that the risk was almost certain, it would be extensive, and that the impact on Calgarians would be severe.

An estimated 11 per cent of all infrastructure is in either poor or very poor condition, according to the corporate risk report.

Overall, Calgary has approximately $100 billion in infrastructure assets, with a funding gap of $7.73 billion needed over the next 10 years to meet the demands for infrastructure maintenance and replacement.

While Calgary has a healthy reserve status – some $4 billion – it’s tucked away in very specific areas, with very specific terms of reference for its use.  Those reserves are only replenished when there’s a departmental surplus, or when overall property tax, investment or franchise fee revenue exceeds expectations.

When asked last week about potential substantial property tax increases needed to help fund infrastructure upgrades, Ward 2 Coun. Jennifer Wyness said she was very concerned. Particularly because while funding is needed for infrastructure, plans were put forward this year to be paid for with one-time cash. That ultimately gets transferred to the operating budget.

“I also know that this mid-cycle budget adjustment has incremental budgeting,” she said.

“We hired people off of one-time funding that will have to be added into the next four-year budget, and that was an ask put before council.”

Mayor Farkas told reporters on Monday that Calgary has to tackle its infrastructure deficit “once and for all.”

“But make no mistake, it’s not just our water utility. It’s rec centers, it’s transportation, it’s transit. Calgary is falling short in these needed investments, and we have to continue to invest here and catch up, because otherwise we’re just going to be paying more in the long term,” he said.

“So, this latest report tells us what we knew intuitively, but it also puts a price tag to what the cost of inaction will be. Either we pay now or we pay a hell of a lot more later.”

One of those situations manifested on Calgary roads. After years of underfunding for repairs and replacement, it took a substantial financial commitment spearheaded by former Ward 14 Coun. Peter Demong to help get Calgary roads back up to reasonable quality after years of decline.

Water situation shouldn’t have undue influence on Calgary’s four-year budget: Councillors

Ward 10 Coun. Andre Chabot noted that the previous Calgary city council rubber stamped $1.1 billion in water infrastructure, and the corresponding increase in water rates to pay for it over the coming decades.

He said the previous group already identified the need to do repairs and accelerate the twinning of the Bearspaw pipe.

“This isn’t new, but it seems to be accentuated by virtue of this recent failure,” Chabot told LWC.

What comes next is the council decision on how fast they want to accelerate and if they want to boost water rates accordingly to pay for it, Chabot said.

“I guess this is part of the rationale, or part of the challenge with the new council is, is that they may not have a clear line of revenue versus expenditures and where the money comes from and what is for what,” he said.

“Infrastructure improvements like this are paid through utility rates. It’s not like we’re going to take on a debt and include it as part of our tax increase. It’s going to be a rate increase on new utility bills, which is going to affect not just Calgarians, but maybe some out-of-town customers as well.”

Ward 5 Coun. Raj Dhaliwal said Calgary has to build infrastructure to accommodate growth, but also make city services reliable.

“I don’t want it to be a sentimentally driven decision and just have a bias-based decision, just because we (were) in the midst of a crisis,” he said.

Dhaliwal also said that given the troubling state of Calgary’s capital infrastructure, he’d like a full review of the city’s assets delivered as a part of Calgary’s four-year budget process. They need to make informed decisions about what’s needed across all infrastructure categories – not just water.

“Break it down by asset by asset, and tell us what is imminent, what could fail, and what is the likelihood? What are the consequences?” Dhaliwal said.

“Maybe there is something in that that is very excessive, but because we have given very high consequences to it, or likelihood. At least it gives us oversight.”