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Albertans need municipal governments to stop overspending

Author: Franco Terrazzano 20/06/2020

Alberta families and businesses have been tightening their belts for years and now it’s time for big spending municipal governments to follow that example.

There’s lots of room for Alberta municipalities to save a lot of money.

“Municipalities have experienced significant revenue growth of 48 per cent per person [between 2007 and 2017],” explained the Blue Ribbon Panel on Alberta’s finances. “Alberta’s municipal per capita expenses were the second highest among provinces (behind Ontario where municipalities also deliver a range of social services).

“Per capita capital spending in Calgary and Edmonton is among the highest for comparable cities across Canada.”

The Canadian Taxpayers Federation released a report analyzing per person spending of Alberta’s municipal governments and the results aren’t pretty. Calgary and Edmonton spend more than other major Western Canadian cities, such as Vancouver, Regina, Saskatoon and Winnipeg. If Calgary and Edmonton brought spending in line with these other major Western Canadian cities, their taxpayers would save $656 million and $566 million respectively every year.

While Calgary and Edmonton are clearly big spenders, Medicine Hat has the dubious honour of being the biggest spending large Alberta municipality, spending more than $6,000 per person annually. Wood Buffalo and Lethbridge are next in line, spending $5,246 and $3,956 annually.

Greenview is Alberta’s biggest spending mid-sized municipality (5,000 – 30,000 people), spending nearly $15,000 per person annually. The next two biggest spenders are Yellowhead County and Lac La Biche County.

To put all of these big-spending municipalities in perspective, the average spending for each size of Alberta municipality is around $3,500 per person.

Municipalities such as Greenview that cover large areas undoubtedly face unique challenges. But a quick look at Greenview’s strategic plan shows that local politicians could better control spending.

For example, the county notes that it “heavily invests in recreation” and brags about its big labour costs.

“Competitive wages, generous benefits and employer contributions, coupled with an investment in a comprehensive health and safety program, Greenview employees enjoy a substantially beneficial work environment,” reads Greenview’s strategic plan. 

With many Albertans outside of government struggling to pay their bills, government spending on recreation and labour are two key areas for all municipalities to rein in.

Ranging from $16,964 to $23,151 annually, the counties of Northern Sunrise, Opportunity and Ranchland are the small Alberta municipalities that spend the most per person.

Alberta municipalities should follow the lead of the provincial government which is beginning to rollback more than a decade of runaway spending.

“Clearly we’re going to need to be more ambitious, we’re going to need to go further in finding savings, operating more efficiently and potentially other measures,” said Kenney who originally planned to only cut the government’s operating spending by 2.8 per cent over four years.

Kenney knows that he needs to cut spending so Albertans aren’t forced to give up more of their paycheques to higher taxes.

“I cannot imagine a dumber thing to do in the midst of a time of economic fragility, an oil price collapse and a global recession, than to add a multi-billion dollar tax on the Alberta economy and Alberta families,” Kenney said when asked about higher taxes to pay down the government’s ballooning debt.

Kenney could do all the right things such as reducing provincial spending and taxes, but families and businesses won’t be able to fully recover if municipal governments don’t cut wasteful spending and lower taxes. Property taxes are especially harmful for the thousands of laid off workers and the many struggling businesses because the tax bills on our homes and offices are still due, regardless of income.

Families and businesses have been tightening their belts for years. Even the province is starting to take the government spending problem seriously. It’s time for Alberta’s municipal governments to get with the program and start cutting wasteful spending.

This column was originally published in the Calgary Sun on June 20, 2020.