Growing population and need to limit tax hikes squeezing City of Calgary budget

Calgarians will get a look on Tuesday at the proposed adjustments to the city's four-year budget plan.

City council directed administration to keep the tax hike for 2025 to 3.6 per cent. However, senior officials signalled in a September preview that 4.5 per cent was a more likely proposal.

Administration told council that years of revenues not keeping pace with growth and inflationary pressures means more tax revenue is needed if the City of Calgary is to deliver on council's top priorities.

The preview showed there will be recommendations for some spending cuts in the budget but there are also spending increases in priority areas being proposed.

Calgary's continuing population growth is a key challenge for the city. Administration noted the city grew by more than 69,000 people last year, and the population has now crossed the 1.5-million mark.

That growth puts pressure on public services and increases the need for additional infrastructure. It's expected the budget adjustments will call for six per cent increases in waste/wastewater/stormwater rates.

In 2024, the city incurred unexpected expenses to deal with problems with the Bearspaw south feeder main, which ruptured in June. That break sparked months of repairs and water use restrictions for Calgarians.

Combined with growth and the need for greater redundancy in the water system, city officials are planning several major infrastructure upgrades. That list includes a second water treatment plant near the Bearspaw dam and two new feeder mains in the coming years, one for the fast growing north end and a new one for the south as well.

Minimize tax hikes

Mayor Jyoti Gondek said she's not happy the starting point for this year's budget debate is higher than council expected.

"The fact that administration did not stick with council direction — which was only a 3.6 per cent increase, and they came back with 4.5 — that's going to be the first thing that we discuss, that council direction was not followed with this budget," said Gondek.

The mayor said delivering on core priorities like public safety, infrastructure, transit and housing are key for these budget adjustments in a fast growing city, but any other add-ons will be scrutinized "very carefully."

Coun. Sonya Sharp, a fiscal conservative, said she'll be pushing administration to find more savings in the budget and minimize any property tax hikes.

"I know that there will be members of council bringing things forward that may add to the budget, but I'll be bringing things forward that will reduce the budget," said the Ward 1 councillor.

"We made a promise to Calgarians."

Last year, council approved a tax hike of 6.66 per cent for homeowners. However, that increase was compounded by an increase in the provincial portion of property taxes of 12 per cent.

In total, it meant an annual tax hike of nearly 8.5 per cent for the owners of a median priced house worth $610,000. That was an increase of more than $25 a month for the homeowner.

Council will begin its annual budget debate on Nov. 18 with a public hearing, giving Calgarians their chance to have a say on the proposed budget adjustments.