City Council approves guidance on funding City services from 2023-2026

Today, Administration provided Council with recommendations for funding guidance to develop the 2023-2026 Service Plans and Budgets. To maintain existing services and progress Council’s strategic direction, Council approved Administration’s recommendation of an projected average increase of 3.65 per cent per year over the next four years from existing properties. Calgary is growing and changing, and each year there is an increase in the number or size of properties. This development and redevelopment also increase The City’s property tax revenue by an average of 1.35 per cent per year.

Further discussions in the fall will provide additional clarity on the service provided and tax impacts to Calgarians. Specific tax impacts will depend on the final Council-approved tax rate each year and will vary by property type and depend on the assessed value of a home or business, as well as the provincial tax rate.

“This is a critical step in our journey to develop service plans and budgets for the next four years,” said City Manager David Duckworth. “Calgarians have high expectations about fiscal responsibility and receiving value for services provided in return for property taxes and fees, and the direction we received today will allow Administration to draft plans and budgets that are affordable and deliver value for Calgarians and businesses.”

The estimated total property tax increase for existing properties is lower than anticipated population growth and inflation. Consumer Price Index (CPI) inflation for Calgary was at 8 per cent in May, the highest it’s been since December 2002. Based on the most current information as of March and expectations on rate policy decisions by the Bank of Canada, annual inflation in 2022 is expected to average 5.6 per cent. We expect the effects of the Bank of Canada policy rate hike to begin to dampen inflation caused by household demand in the second half of 2022. Contrast expected inflation of 5.6 per cent in 2022 with an expected property tax increase for the folks living in Calgary today of a projected average of 3.65 per cent over the next four years, providing as much value to citizens as we can within inflation.

City tax-supported spending has been below inflation and population growth for several years. With a sustained focus on cost reduction, The City has been able to absorb most of these costs to keep taxes low and even have an overall tax decrease in 2021.

Waste and Recycling and Water Utility rates

Estimated rates for water, wastewater, stormwater, and waste & recycling also remain below projected population growth and inflation. Council approved Administration’s recommendation of:

Water Treatment & Supply: 0 per cent per year
Wastewater Collection & Treatment: 2.5 per cent per year
Stormwater Management: 0 per cent per year
Waste & Recycling total cart program fees: Average annual increase of 2.8 per cent
Waste & Recycling disposal rates and charges: Average annual increase of 0 per cent

Both Water Treatment & Supply and Stormwater Management will have no increase in the next four years due to cost reductions through savings initiatives and relinquishing capital budget where possible. This has resulted in the ability to continue to keep water safe and reliable for customers while keeping rates low, despite increasing inflation pressures in fuel, energy, and chemicals, additional costs to build service resilience, and operational resources to address service risks.

Both the Wastewater Collection & Treatment rate increase and Waste & Recycling, the cart program charge increase is well below anticipated population growth and inflation at 2.5 and 2.8 per cent per year, respectively. This equates to $1.38-$1.48 per month for the typical residential monthly utility bill, and $0.70 per month for residential cart customers from 2023-2026. These modest increases allow us to continue to meet regulatory and legislative requirements and provide reliable waste and recycling service, respond to inflationary pressures and demand, and support the needs of a growing city.

Spring Research

Council’s decisions take into consideration public engagement and research results.

Today, the 2022 Spring Pulse Survey results, coupled with additional research findings from citizens over the spring, were shared with Council and released publicly on calgary.ca/CitizenSatisfaction.

The City conducts the annual Spring Pulse Survey to gather citizens’ views and perceptions about City programs and services. Findings from this survey provide a performance-based report for Council, Administration and the public. Tracking citizens’ perceptions over time allows for benchmarking against the previous years’ findings.

The City is not immune to external impacts, such as the COVID-19 pandemic and changes in our local economy, among others. This is a unique time in Calgary, and that is reflected in survey results that show both optimism for the future as well as opportunities for improvement.

Key results include:
- Three quarters of Calgarians say quality of life in Calgary today is “good,” and that Calgary is a great place to make a life.
- Roughly seven-in-ten Calgarians say they are satisfied with the overall level and quality of services and programs provided by The City.
- Slightly more than one half of Calgarians give The City a “good value” rating for the value of their property tax dollars.
- Just under half of Calgarians who responded say they trust The City of Calgary, and under one third are neutral, providing a key opportunity for The City gain trust.
- The top issues identified as needing the most attention from local leaders are infrastructure, traffic and roads, crime, safety and policing, and transit.
- A majority of Calgarians would prefer to increase taxes at or beyond the current inflation rate to expand or maintain services.

This research feeds into the creation of the 2023-2026 Service Plans and Budgets, enabling a data-driven approach to decision-making and planning so that we provide the highest service value possible.

Please refer to the full results of the spring surveys at calgary.ca/CitizenSatisfaction.

Tax Installment Payment Plan (TIPP) calculations

To ensure that property owners pay no more or no less than their annual tax amount, TIPP payments are subject to adjustment twice a year. This is not a change to the current TIPP calculation schedule but a new approach for communicating and calculating the January to June payments.

Using the relevant tax rate reflecting the Council-approved budget for the calculation of January – June instalments supports customer transparency and understanding and strives to mitigate variability in instalment amounts. This will require a change to Bylaw 9M2002 and maintain a minimum commitment to communicate TIPP changes with 10 days notice.

Next steps

Based on this guidance, Administration will develop the proposed 2023-2026 Service Plans and Budgets. They will be deliberated and decided by Council in November 2022, with many opportunities for citizens and businesses to provide input during the summer and fall.

“Striking the right balance between service needs and expectations relating to what Calgarians value and affordability, budget realities and long-term financial sustainability is the goal for the development of the 2023-2026 Service Plans and Budgets,” said Chief Financial Officer Carla Male. “The City's multi-year business plan and budget process enables a future-oriented and sustainable approach to providing City services through Council's approval of four-year integrated plans and budgets. The approach also provides flexibility though an annual Adjustments process that allows the organization to amend our plans and budgets in response to changes in the external environment.”

The City is committed to continuous improvement, including finding efficiencies throughout 2023-2026 to help protect against future cost increases. Council’s decisions today ensure The City collects only as much tax as is needed.

For more information, please visit calgary.ca/YourServices.

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