Real operating spending 2.5 times more than what is sustainable
Calgary – On the heels of the municipal election, the Canadian Federation of Independent Business (CFIB) released the 8th annual Alberta Municipal Spending Watch Report. The report reveals operating spending among Alberta’s municipalities grew by 69 per cent from 2005 to 2015, well above the sustainable benchmark of inflation and population growth. Holding operating growth to sustainable levels over this period, would have saved Albertans $15.1 billion dollars ($2.6 billion in 2015), or the equivalent of $10,650 per household ($1,738 in 2015).
“Newly elected municipal leaders have many issues to tackle and ballooning spending should be the top of the list. Small business owners understand operating spending may increases due to inflationary and population pressures, but the year-over-year increases we’ve seen go well beyond what’s reasonable,” said Amber Ruddy, Alberta Director.
The report shows Alberta’s population grew by 25 per cent between 2005 and 2015, while real operating spending increased by 69 per cent, more than two and half times the sustainable benchmark of population growth. More than half of municipal operating spending across Alberta goes towards salaries, wages, and benefits.
“With fresh perspectives on council, small business owners encourage local officials to seek innovative approaches to save money within our own backyards,” said Ruddy. “Since government workers earn significantly higher compensation compared to the private sector, closing this gap is the logical place to start.”
How Alberta’s Cities Spend
Listed from Worst to Best (by overall provincial rank)
The report recommends municipalities:
· Control spending increases to the rate of population growth
· Adopt sustainable wage growth policies
· Have suitable contingency funds to match the risk of natural disasters
The report recommends the province:
· Continue to reject calls for new taxation powers through City Charter agreements
· Create a municipal auditor general to conduct performance-based audits of Alberta’s municipalities
· Not proceed with the City Charter proposal that allows municipal governments to run multi-year operational deficits
Read the full Alberta Municipal Spending Watch Report.
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.