Gateway Gazette

Municipal over-spending costs AB households over $2,000 

 

Operating spending soars nearly 3.5 times more than what is sustainable

CALGARY – The Canadian Federation of Independent Business (CFIB) released its annual Alberta Municipal Spending Watch report today that reveals operating expenditures by the vast majority of the province’s municipalities have risen at an unsustainable rate between 2003 and 2013, the last year for which data is available.

Excessive operating spending by local governments cost Albertan households $2,039 in 2013 alone and a total of $9,955 since 2003.

“Municipal spending is out-of-control and in the context of the current economic situation, businesses and taxpayers deserve more scrutiny over every dollar spent,” said Amber Ruddy, Alberta Director for CFIB.  “Overspending at the municipal level has created a dangerous financial situation for local economies, and resulted in an excessive tax and spend scheme that is damaging to small firms.”

Growth in real (i.e. inflation-adjusted) operating spending from 2003 to 2013 increased by 82 per cent, compared to population growth, which grew by 24 per cent.  Province wide data shows that municipalities overspent by $13.8 billion since 2003, and $2.9 billion in 2013 alone.  Half of municipal operating spending across Alberta was allocated toward salaries, wages, and benefits.

“Municipalities fail to take responsibility for bloated employee compensation, which is the main driver of excessive spending,” said Ruddy.  “Instead of resorting to property tax increases and asking the provincial government for additional tax powers, local governments must be looking for savings in their own backyards.”

The report recommends municipalities:

  • Control spending increases to the rate of population growth,
  • Adopt sustainable wage growth policies, and
  • Have suitable contingency funds to match the risk of natural disasters.

The report recommends the province:

  • Reject calls for new taxation powers through City Charter agreements,
  • Create a municipal auditor general to conduct performance-based audits for Alberta’s municipalities.

Read the full 2015 Alberta Municipal Spending report cfib.ca/ab.

CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region.

Related Articles

Leave a Reply