Calgary to unveil adjustments for 2021 budget

• For the latest developments, see: Calgary looks to cut $90M from budget, coupled with tax cuts

A clearer picture of next year's civic budget will come into view on Monday as adjustments to the spending plan are unveiled.

Calgary city council directed administration to bring back changes which would result in a property tax freeze or a tax cut for 2021.

It will be the third year of the city's current four year budget cycle.

The original plan for 2021 called for a three per cent tax increase but a pandemic and a depressed economy ensured that will not be allowed to go ahead.

"It's certainly an austerity budget," said Mayor Naheed Nenshi. 

He has seen a preview of the adjustments and said 2021 will be the fifth consecutive year where spending will lag behind the rate of inflation plus population growth.

Still, the mayor said city bureaucrats have to find a balance.

"On the one hand, I think citizens really don't have to worry about their tax bill but on the other hand, they have to really be thoughtful about what services they don't want to see cut."

Pandemic redraws city finances

The coronavirus devastated the city's spending plans for 2020.

It had been expecting a budget shortfall between $150 million and $400 million.
 
To mitigate that, the city laid off 15 per cent of its staff. Nenshi has said that a federal bailout of $200 million will cover a shortfall in transit revenues as well as much of the city's operating deficit.

"That will keep the wolves at bay. That will get us through this year," said Nenshi.

Unlike the federal and provincial governments, municipalities aren't supposed to run deficits.

By law, Alberta municipalities must put forward balanced budgets. However, they can make arrangements to pay deficits in following years.

It's expected the burden of spending cuts will be shared across departments. While front line services are expected to be the last to be hit, Nenshi said administration has been asked to be thoughtful.

Police to cut spending

On Friday, the Calgary Police Commission announced that the Calgary Police Service is prepared to make $40 million of adjustments to its spending plans.

It wants to eliminated 60 new growth positions for 2021 which would save $10 million.

CPS said it can absorb $20 million of COVID-related impacts for 2020 and 2021. As well, it wants to reallocate $10 million to explore alternative call response models in 2021. 

In its budget submission, the Commission stated it has worked closely with CPS leadership "to create an organization that is as lean as possible" while still ensuring citizens get the service they expect from the police.

More rebates possible

One budget wildcard that won't be settled until later in November is how the city will cope with further shifts in the non-residential tax burden.

For 2020, council raised residential taxes by 7.5 per cent in order to reduce taxes on business properties by 10 per cent.

For 2021, lower property assessments on downtown properties and hotels are expecting to result in big tax increases for properties like large warehouses and distribution centres which have actually posted higher assessments.

Nenshi said once again, council will have to consider one-time rebates to shelter those businesses from large tax hikes.

However he said the method to do that hasn't been determined yet.

Council will discuss the changes during its annual budget debate in the last week of November.