CANMORE – Town of Canmore staff will begin work on returning with a two-year budget approval after council voted to have staff begin work on the 2023 and 2024 operating and capital budgets.
In what could potentially be one of the more difficult budgets in recent years, Town council directed staff to return with a status quo budget – one that prepares existing services returning at the same levels – when budget talks begin in the fall. Town staff will also return with recommendations for franchise fees for Fortis and ATCO Gas.
But with record high inflation, cost of living adjustments for employees, provincial downloading to municipalities and the likeliness of increases in borrowing, a status quo budget could see a tax increase close to 10 per cent of growth.
When the budget returns, an effort will be made to show why certain items are increasing or decreasing and the impact factors such as cost of living adjustments (COLA), inflation and insurance increase may play in the budget.
“If you’re not paying certain bills in a certain way as a ratepayer that maybe sometimes it’s hard to relate how something went up by that much,” Coun. Joanna McCallum said. “By being able to see it line by line is really helpful for us, but helpful to the public.”
Though the focus would be on maintaining the status quo, a list of options to increase or decrease services – based on council’s strategic plan – will also return.
The report also emphasized the likelihood of provincial downloading, rising interest and borrowing costs and high inflation will impact operating costs.
Among the operating budget factors are salaries, wages and benefits; contributions to reserves and increased RCMP and fire costs. A one per cent tax increase is $281,000 based on the 2022 budget, Chelsey Richardson, the Town’s manager of finance, said.
The capital budget first draft will focus on asset management projects and franchise fee changes – a way to bring in revenue for a municipality – will return.
The franchise fee for Fortis is set at 12 per cent and a maximum at 20 per cent and any one per cent increase is an estimated extra $135,000 for Town coffers. The ATCO Gas rate is 30 per cent – nearing the 35 per cent maximum – with a per cent jump meaning potentially $55,000 in extra revenue.
Richardson said it was far too early to project the exact money collected by any possible fee increase. She noted the money collected goes for capital requirements, climate action initiatives, funding the climate change specialist position and money to the sustainability reserve.
“We don’t treat it as another general revenue source in the same way some municipalities do, but using these fees in those areas does indirectly help the tax supported budget as well,” she said.
The franchise fees were previously changed for the 2021 budget and they went five years before that without being increased. Richardson said the finance department looks to see what rates are set throughout the province, but “broad ranges and philosophical approaches” differ for each municipality.
“I find myself wearing two hats,” Coun. Tanya Foubert said. “I like the revenue source, but the cumulative effect of fees upon people in our community and the cost of living and affordability is far greater than this one thing, but this one thing contributes to it.”
Richardson said the CPI was about 5.8 per cent and interest rates are about five per cent. She added COLA is roughly 5.5 per cent, but the possibility of further downloading from the provincial and federal governments on municipalities, increase in interest rates impacting borrowing costs, record inflation and supply chain issues can make any budget difficult.
Council also had staff begin the preliminary operating plans for 2025-26 and capital plans for 2025-28. The Municipal Government Act requires municipalities to have three-year operating plans and five-year capital plans to be adopted.
Town staff will have meetings throughout August and September that include addressing department needs, reviewing plans and returning to council with a draft in October.
