A recent report from Calgary city hall indicates that the shifting of costs from provincial and federal governments to the municipal level has cost the City of Calgary more than $1 billion over the past decade. The report, presented to councillors on Tuesday, estimates that since 2016, the city has spent approximately $1.05 billion on programs and services typically under the jurisdiction of other orders of government.
Fiscal gap widening
The municipal fiscal gap report also projects that provincial downloading will cost Calgary's finances an additional $145 million in 2027. According to the report, the funding gap has widened this decade as the city's expenses have grown faster than its constrained ability to increase revenues, amid high inflation and record population growth. Higher provincial property tax requisitions have further reduced fiscal flexibility for the city, placing a disproportionate burden on municipal finances.
"Costs are rising faster than revenues for municipalities, but not for provincial or federal governments," the report states. It emphasizes that downloading responsibilities to municipalities is particularly burdensome because their fiscal capacity is significantly lower and more constrained compared to higher levels of government.
Examples of downloading
The report cites several examples of provincial downloading, including first response for medical emergencies, which now accounts for half of the Calgary Fire Department's call volume. Additionally, subsidies for low-income supports, such as the low-income Calgary Transit pass, have placed a strain on city finances. According to a recent letter from Mayor Jeromy Farkas, the low-income pass program cost $58 million to deliver last year, with the province providing only a $6.3 million grant, just over 10 percent of the total cost.
Other examples include amendments to provincial legislation, such as Bills 20, 50, 51, and 54, which have resulted in new costs for the city. Regulatory changes related to off-site levies, occupational health and safety, and hazardous waste requirements have also incurred expenses. Furthermore, the Alberta government's recent decision to restrict photo radar has led to an estimated $28 million annual loss in ticket revenue for the Calgary Police Service.
Infrastructure grants decline
The report also highlights that provincial infrastructure grants to the city have declined in recent years, compounding the fiscal gap. This poses another funding shortfall for maintaining civic infrastructure. Overall, the report underscores the growing financial pressure on municipalities as they absorb costs from other levels of government without corresponding revenue increases.
