Calgary's debt would climb to about $10 billion by 2030 under proposed budget

Calgary's debt would climb to about $10 billion by 2030 under the proposed budget, up from roughly $3.7 to $3.8 billion now. The figure is a proposal and council still has to approve it. Deliberations begin Nov. 23.

For a typical median home assessed at $688,000, the budget means about $53 more a month in 2027, including $16 from waste and water fees. Proposed property tax increases are 15 per cent in 2027, 10 per cent in 2028, 7.7 per cent in 2029 and six per cent in 2030. The debt would reach 80 per cent of the city's debt limit by 2030, up from a steady 40 per cent.

The increase comes from a capital program of about $21 billion for 2027 to 2030, with $13 billion of that in new infrastructure. The city says that is two and a half times the prior four-year budget. Major water utility projects, the Green Line, and the Pine Creek and Fish Creek wastewater treatment plants, at $1.7 billion, account for much of the increase. Water infrastructure is $616 million and roads are $420 million. The city puts its infrastructure gap at $49 billion.

Debt is split in two. Self-supported debt is repaid through utility fees and levies. Tax-supported debt is repaid through property taxes. Repaying the new tax-supported debt by 2030 would need just under two per cent more property tax revenue, with an estimated servicing cost of roughly $50 million that year. The city's policy caps are total debt no more than 1.6 times city revenue and debt servicing no more than 0.28 times city revenue, and the city expects to stay below its council-approved limit.

Mayor Jeromy Farkas defended the borrowing, saying: "If we know that an asset is going to last 35 years, I think it makes sense, like any family would, to take out a mortgage. Especially if it's an asset like a rec centre that's generating fees or revenues from the people who use that facility, to offset it." Farkas said council has to pay for big-ticket items past councils approved, such as the new arena, or ignored, such as crumbling infrastructure.

Ward 10 Coun. Andre Chabot said the increase is cause for some concern. He said the city has discussed with the province extending the debt repayment period, and that doing so could reduce the year-over-year increase. Chief Financial Officer Les Tochor said the budget "has the largest capital program the city of Calgary has ever seen." He said it is hard to find a 40- or 50-year bond without a high interest rate, and that the city is evaluating what the market can bear. The city says the plan is adjusted every year, and that start dates and weather may shift it.

Enid Slack of the Institute on Municipal Finance and Governance at the University of Toronto says Canadian municipalities may borrow only for capital projects, not operating costs.