Demographic, technological, and employment shifts pose ongoing and emerging challenges for Calgary’s finances. More than 80 per cent of Canadians live in large and medium-sized cities, and Calgary’s population alone has grown by more than seven percent (100,000+) in the last four years. These changes have increased the demand for city services yet our revenue pace has not kept up.
When companies vacated our downtown office towers as a result of falling oil prices in 2014, the tax dollars generated from those properties went with them. Property values have dropped $16b in value over the last five years and Calgary saw a loss of $300m tax revenue from 2016-2019. Historically, our downtown has shouldered a disproportionate share of the tax burden and residential taxes alone will not pay for city services.
The COVID-19 pandemic further exacerbated the downtown vacancy rates, and although many employees will return to offices once the pandemic ceases, many others will not. Remote work and e-commerce has reduced the need for physical spaces as a business requirement. Our increasingly digital world is quickly creating a crisis of revenue for many municipalities across Canada—Calgary included.
The downtown vacancy rate is currently ~30% and we’ll need to bring that down to 13-14% to stabilize our tax base using our current business model. In the meantime, unfairly shifting the unmet tax burden onto small businesses and spending rainy day funds are reactionary measures that have put our citizens and our city at risk. This is not what fiscal sustainability looks like.
Calgary needs to re-evaluate its business model.
The reality is that 40% of our City’s revenue options are tied to land-based value in the form of property taxes and development charges. The downtown revitalization strategy is a necessary step in the right direction, and an initiative that I would gladly help champion if elected, but it could take a decade or more to realize its benefits. In the meantime, Calgarians do not want to see their property taxes increase.
Simply increasing taxes is an outdated approach that lacks vision for the future. We can do better.
If elected, I will work with the next council to:
Other cities have successfully tapped into digital economic activity in the form of taxes on Airbnb rentals and fees per kilometre on ridesharing services. Smart City technologies can create many opportunities and Calgary has already begun work on its own Smart City Strategy. However, the Municipal Government Act and other legislation can pose barriers to creating new revenue streams—I would like to explore these barriers and work towards modernizing Calgary’s business model.
We must continually examine whether services are optimal in terms of outcomes and return of investment. Excellent work has been done within the City’s zero based review program to continually improve the efficiency, effectiveness and sustainability of services, and I’d look to expand on this program and capitalize on additional opportunities where possible.
Fiscal sustainability is possible and I believe we can achieve it without adversely impacting Calgarians or sacrificing our city’s competitiveness in attracting businesses and economic development.