When Calgary’s city council entered its latest round of budget deliberations, which ended with a vote last week to approve a fiscal plan, the reality facing local politicians had a painfully familiar ring.
Just a few months earlier, council pushed through $60-million in cuts to transit, police and other services to cope with a continued collapse in downtown property values and to ease a subsequent tax increase to businesses elsewhere in the city.
This time, council was facing pressure to freeze or even lower taxes while also dealing with funding cuts from October’s provincial budget. To do that, the city was once again looking for potentially deep cuts.
And in both cases, there was something else in the background: a plan to spend $290-million on a new hockey arena, which has been called both a bright light for a city in badly need of a boost, or a handout to billionaire National Hockey League owners that threatened low-income transit passes and inner-city pools.
“How we can fund a brand-new sports arena in the face of cutting services to citizens?” said Councillor Evan Woolley, who represents a district that includes much of the city’s downtown and part of the dense Beltline neighbourhood to the south.
Mr. Woolley, who also voted against the arena last summer, introduced a last-minute motion to essentially cancel the arena deal with the owners of the Calgary Flames and instead use that money to fund a transit expansion, police and housing.
The motion failed. Instead, the council voted to approve a budget that included a increase in tax rates while also changing how property taxes are divided between businesses and residents. Previously, businesses paid a slightly greater share of the city’s total tax bill; now, homeowners will account for 52 per cent of that revenue, representing an overall increase of 7.51 per cent to residential tax bills.
The city avoided even higher tax rates by taking $24-million from a reserve fund as a one-time bailout, which means many of the same problems could emerge again in the next budget round. Mr. Woolley said he plans to keep fighting the arena deal, especially as residents learn just what services the city will need to cut to keep its finances afloat.
“If everything’s on the table, then everything needs to be on the table,” he said.
The arena agreement will see the city spend $275-million, as well as another $15-million to demolish the Saddledome and other added costs. In exchange, the city expects to collect a ticket tax, as well as some additional property taxes in the expanding area east of downtown, including several properties that the Flames’ owners will be able to develop.
Calgary Sports and Entertainment Corp., which owns the Flames, did not respond to a request for comment.
Bringing up the arena deal has been a familiar refrain for critics of the city cuts, with the project measured against anything that could have been a potential target, whether it was low-income transit passes, social housing, or the city’s massive Green Line commuter-rail project.
Supporters of a pair of city-owned swimming pools on the fringes of downtown Calgary, in the Beltline and Inglewood neighbourhoods, made that point repeatedly. The city had planned to close both facilities by the end of the year, citing low attendance and high maintenance costs for the aging buildings, but council delayed the closings for two years in an unexpected vote last week.
Peter Oliver, president of the Beltline Neighbourhoods Association, said the pools and the arena became symbols of a larger debate about the city’s priorities.
“The timing means they’re absolutely linked," he said.
“There are a lot of people who think that a new arena would be great, but is it really a priority when we’re eroding essential community assets that really have a more direct impact on people’s quality of life here?”
Councillor Gian-Carlo Carra, whose ward sits just outside where the existing Saddledome and new arena site are located, voted against the motion to rip up the arena deal; he also voted to save the pools. He’s dismissive of attempts to revive the arena debate and said the city shouldn’t be forced to choose between pursuing such projects and providing basic services.
Mr. Carra, like several others on council, blames the United Conservative Party provincial government for putting the city in such a position in the first place, with cuts to infrastructure funding and other grants, including by taking a larger share of ticket revenue that had been used to fund police.
“The crisis that we’re manufacturing for ourselves is the idea that we have to choose between things – like the arena or the Green Line,” he said.
“I absolutely reject that. ... We have a provincial government that is of the opinion that austerity would work here.”
Kaycee Madu, the province’s Minister of Municipal Affairs, said he has no sympathy for a city that he argued has been rapidly increasing spending on pet projects for years. He rejected complaints that the provincial budget led to the mess the city finds itself in now.
“The spending culture in Calgary and appetite for more taxes did not start when this government got elected,” Mr. Madu said in an interview.
“We are taking steps at the provincial level to rebuild our economy. ... I expect the council in Calgary to understand that we have a provincial priority and work with us to accomplish that.”
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