• Good afternoon your worship and members of council.

• As mentioned, my name is Scott Hennig and I am the Alberta director of the Canadian Taxpayers Federation.

• The Canadian Taxpayers Federation is a non-profit, non-partisan, advocacy organization, committed to lower taxes, less waste and more government accountability.

• We have 60,000 supporters nation-wide with 14,000 in Alberta, and roughly 2,000 here in Edmonton.

• Before I present the CTF's thoughts on the 2009 City of Edmonton budget, I would first like to thank council for this opportunity to present publicly on the 2009 budget. It's also appreciated that you moved to three days of public hearings and to hearings later in the day so that people with regular jobs can come and present to council.

• Now on to the 2009 proposed budget.

• I would first like to congratulate council for trying out a zero-based budget exercise on 6 activity areas. I'm not yet sure of the long-term impacts of the pilot project, but we're hopeful that zero-based budgeting will become standard practice with every department in the future.

• Probably to no surprise, our major concern is the size of the proposed tax increase, ranging from a low of 10.5% to a potential 17% and possibly even higher if council approves further spending requests.

• This range of increase in this budget will likely create one of the largest tax hikes in Edmonton's history.

• And I'm not sure your timing could be worse. While there's likely never a good time to hike taxes by up to 17%, with a recession occurring to our South, and a likely economic downturn to occur in Canada, Edmontonians having less money in their pockets by way of higher property taxes, is not going to help ease any of the economic pain.

• But, the good news for the City is that an economic downturn may make things like gas, wages and capital projects - cheaper, which should help the city stay out of deficit, unlike this year.

• But looking at the current rate of inflation of 4.3% for Edmonton, which is in all likelihood going to fall once we get into 2009, the proposed 10.5% tax hike is 2.4 times larger than the inflation rate.

• Now, we know that the basket of goods used to determine the inflation rate for Edmonton, isn't the same basket of goods purchased by the City of Edmonton.

• But it very accurately reflects Edmontonians ability to pay their taxes.

• In fact, the average weekly earnings of Albertans very closely mirrors the current inflation rate. So, it should be expected that on average Edmontonians likely saw a 4% hike in their wages this year. That number however, will be smaller for most pensioners.

• In fact, a formula has been put in place to determine the wage adjustment each year for those seniors who receive CPP. The 2008 CPP increase amounted to 2%, and it's likely the 2009 increase won't be any higher.

• When pensions go up by 2% and Edmonton property taxes go up by 10.5%, seniors who are on very fixed income have to spend a smaller percentage of their income on things like food, shelter and clothing and a higher percentage on taxes. Many don't have the ability to go back into the workforce and get a job again.

• The same can be said for other low-income individuals, especially renters. When you hike property taxes by 10.5% landlords don't eat those costs, landlords will turn around and pass on their tax hikes to their renters in the form of higher rent.

• If council is concerned about affordable housing, and it certainly appears many on council are, this tax hike is going to make housing less affordable.

• So, the logical question is: where do you start to cut this budget? By our calculations to get down to a 4.3% tax hike, you're going to have to cut $48-million from the budget.

• Tough decisions are going to have to be made. But the bottom line is that council should focus on funding core priorities of Edmontonians, like fire, police, transit, snow clearing, and cut spending on items that while may be "nice to have" are not necessarily the main business of civic governments.

• Last year I provided each member of council with a copy of the final report of the City of Winnipeg's Economic Opportunity Commission, whose goal it was to identify savings of $56-million within the city. While we still believe a similar commission would be useful in Edmonton, I have also prepared a hand-out that shows our suggestion on how council could cut nearly $50-million from this budget.

• In closing we would encourage council to make the tough decisions of where to cut, rather than the easy decision of how much to hike taxes.


• Thank you.

By: Scott Hennig
Posted: October 15, 2008
Topic: Alberta

Contact the regional director Scott Hennig for further information.

Type: Related

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