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Snow Banks, Slush or Taxes: Calgary’s Chinook Solution

January 17, 2009


Calgary enjoys some of the most delightful and unique wintry affects. The psychological benefits of the warm Chinook winds throughout the winter are immeasurable. But Calgarians seem to depend on this natural phenomenon to clear city streets of unwanted snow. Unfortunately this January the snowmen are still standing and mailmen cannot reach mailboxes, 311 was inundated with complaints about road conditions, Calgary Transit buses and tow trucks are still getting stuck in the snow in spite of balmy weather.

Even when main streets are cleared, side streets and sidewalks remain covered in compact, icy snow even days after the most recent snowfall.

At a pedestrian crossing in front of a seniors residence and nursing home I stopped to help a WWII veteran cut a path through a mound of hardened snow piled up by a snowplow that had cleared the main roads by pushing the snow – not onto the median – but roadside effectively blocking access to pedestrian crossings and Calgary transit bus stops. The senior citizen was doing a good job but I was concerned he would have a heart attack since the snow was heavy. (An hour later the area was cleaned by a small snowplow. Apparently if it was a Good Samaritan who used his own snow plow, he broke a municipal by-law).

From a bus stop across the street we watched anxiously as a seemingly confused and very tiny, elderly lady had cars screeching to a halt as she stepped unto the pedestrian crosswalk and then back onto the sidewalk. She didn’t press the button for the traffic lights and we thought she was trying to cross but didn’t know how. As the bus neared she stepped almost in front of it! Apparently she was trying to get on the bus there since she couldn’t manage the icy mounds in front of the regular bus stop.

Albertans are proud that theirs is the only Canadian province with no provincial sales tax. And Calgarian homeowners pay very low taxes compared to the rest of Canada. In 2008 while still affected by boom pricing, the median residential property assessment was $447,500 and the median residential property taxes for a home assessed at $447,500 was $1080.76. The 2007 average municipal tax and utility cost of 24 cities surveyed in Canada was $3,361 while the City of Calgary’s average municipal tax and utility cost ranks among the lowest at $3,129 (Calgary City Municipal Property Tax $945 = Average Utility Charges $2,184 = $3,129).

Economist Vander Ploeg (2002-09) compared sources of revenue sources for major cities in Canada and the United States. In 2000 83.4% of Calgary’s tax revenue ($682,546,000) came from property taxes which includes both residential and non-residential. Only 16% came from Business and Utility Taxes. Revenue sources for Canadian municipalities include property tax, user fees and intergovernmental transfers.

“The list of tax levers available to western Canada’s cities is limited to property taxes, utility franchise taxes, and a few small selective sales taxes (Vander Ploeg 2002-09:28).”

In contrast Denver’s total revenue growth increased from 1990 to 2002 by almost 60% (in per capita terms) compared to only 22% for Calgary. Denver has 13 sources of revenue and this enables the municipality to invest significantly more in the city’s capital infrastructure (Vander Ploeg 2002-09:28).

“To provide context, it is important to understand the financial challenges facing western Canada’s big cities. The problems revolve around four factors (Vander Ploeg 2002). First, population growth in Canada is increasingly focused in large metropolitan centres. Nowhere is this more relevant than in the West, which has three of Canada’s fastest growing big cities (Vancouver, Edmonton, Calgary). Rapid population growth leads to increased demands for municipal services and places stress on local infrastructure. As shown in Figure 1, this phenomenon is shared not only by western Canadian cities, but many U.S. cities as well (Vander Ploeg 2002-09).”

“Most other cities, whether on the Canadian or American side of the border, typically record about 20% to 25% of their total budget from utility operations. (This group includes Calgary and Edmonton, both of which own large electrical utilities. However, these operations are separate companies that are not consolidated in the municipal budget. If they were, these two cities would have some of the highest utility revenue [4] (Vander Ploeg 2002-09:30).”

Notes:
1. Municipal property tax information is based on a 25 to 30 year old, single-detached, three-bedroom, bungalow with a main floor area of 111.5 Square meters (1,200 sq. ft.), having a double car garage and finished full basement, on a 557.4 square meters (6,000 sq. ft.) lot located in an average neighbourhood. Average utility charge information is based on the total utility charge for telephones, power, water, sewer, land drainage and garbage collection for the average single-detached house. Property tax shown excludes school taxes and is net of homeowner grants or credits. Source: The City of Edmonton Planning and Development Department 2007 Residential Property Taxes & Utility Charges Survey. 2007 rates

2. Provincial programmes for social services have been downloaded onto municipalities.

3. Arcand et al (2009) predict that Metropolitan Calgary’s GDP will increase 2.4% because of stronger construction which wieconomy will offset slower services activity.

4. The City of Edmonton proposed the transfer of the Gold Bar wastewater treatment plant (worth $750 million) from city ownership to city-owned Epcor Utilities for $75 million. The Raging Grammies protested at City Hall. “City officials say in addition to the $75 million, Edmonton will earn an extra $115 million in fees and dividends by 2018. It’s a similar deal offered when the drinking water system was placed under Epcor ownership.” (Cooper 2009-01-18). Edmonton Journal.

Webliography and Bibliography

Arcand, Alan; Armstrong, Maxim; Lefebvre, Mario; McIntyre, Jane; Sutherland, Greg; Weibe, Robin. 2009-01. “Calgary: Metropolitan Outlook 1, Winter 2009.” Conference Board of Canada.

Cooper, David. 2009-01-18. “Coalition protests Gold Bar wastewater treatment plant.” Edmonton Journal.

Pavlichev and Garson (2004) suggest e-government, a new form of governance – digital government where digital technologies are used as a transformative force.

City of Edmonton. 2008-10-06. “Proposed 2009 Budget Maintains Current Service Levels.”

Guttormson, Kim. 2009-01-16. “Even+trucks+getting+stuck+Calgary+slushy+side+streets.” Calgary Herald.

Huang, Jong. 2007:01. “City of Edmonton Annual 2006 Residential Property Taxes & Utility Charges Survey.” City of Edmonton Planning and Development. see also http://www.edalliance.ca/news/print.asp?newsID=63

Pavlichev, Alexei; Garson, G. David. 2004. Digital Government: Principles and Best Practices. Idea Group Inc (IGI).

Vander Ploeg, Casey G. 2002-09. “Big City Revenue Sources: A Canada-U.S. Comparison of Municipal Tax Tools and Revenue Levers.”

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