Restraint needed as local governments spend triple what’s sustainable, costing households $1,750
CALGARY – The Canadian Federation of Independent Business (CFIB) released the 7th edition of the Alberta Municipal Spending Watch report, ranking 180 Alberta municipalities. The report reveals growth in real (i.e. inflation-adjusted) operating spending has risen by 75 per cent, compared to a 27 per cent increase in population, between 2004 and 2014 the most current year for which province-wide data is available.
Excessive operating spending by local governments cost Albertan households $1,754 in 2014 alone and $10,289 since 2004. While the growth of this gap narrowed between 2013 and 2014, overspending over the long term continues.
Breakdown for Cities:
“This tax and spend trend is squeezing business owners when they can least afford it. Small businesses are struggling and wonder when tax relief will be delivered, especially during an economic downturn,” said Amber Ruddy, Alberta Director for CFIB. “Municipalities living well beyond their means are unduly placing a high tax burden on the back bone of local economies- hard working entrepreneurs.”
Half of all dollars spent by municipalities in Alberta in 2014 were dedicated to salaries, wages and benefits. Bloated employee compensation is the main driver of increased levels of spending.
“Municipalities continue to offer employees compensation plans that are completely out of line with what everyone else makes. Municipal leaders need to take action to show we are all in this together,” stated Ruddy.
The report recommends the province and municipalities:
- Cap spending increases to the rate of inflation and population growth,
- Adopt sustainable wage growth policies,
- Contract out services to the private sector when it provides better value for service,
- Reject calls for new taxation powers through City Charter agreements
The full 2016 Alberta Municipal Spending report is available at cfib.ca/ab
CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members across every sector and region, including 10,000 in Alberta.