ALBERTA

Alberta Municipalities Spending At Unsustainable Rate: Business Group

11/06/2014 12:36 EST | Updated 01/06/2015 05:59 EST
George Rose via Getty Images
CALGARY, CANADA - JULY 3: The downtown skyline is viewed from the northside of the Bow River on July 3, 2012 in Calgary, Canada. Calgary, home to the world famous Stampede, continues to enjoy the benefits of an energy boom that continues across the Alberta province. (Photo by George Rose/Getty Images)
CALGARY - The Canadian Federation of Independent Business says the vast majority of Alberta municipalities are spending money at an alarming and unsustainable rate.

The organization released a report Thursday that logged the operating expenditures of municipalities between 2000 and 2012.

Senior policy analyst Amber Ruddy says inflation-adjusted operating expenses by all 181 municipalities with a population of at least 1,000 rose by 80 per cent in that time.

That's about 2 1/2 times faster than Alberta's total population growth of 29 per cent in the same period.

"Over the past 12 years, most of Alberta's larger municipalities have been on a fiscally unsustainable path. As a result, it's no surprise that some municipal leaders demand more revenue-generating power," said Ruddy.

"There's only one taxpayer at the end of the day, so any way that they're trying to increase the revenue is all going to hit the taxpayer — both businesses and residents — bottom line if municipalities continue with this path forward," she said.

"They're vastly exceeding what that is and now we really have to look for more ways to find cost savings."

Ruddy said only a dozen municipalities have managed to keep their spending in line with population growth. Most of them are smaller, with the exception of Medicine Hat, which benefits from its large natural gas reserves.

Based on information obtained from Alberta Municipal Affairs, the report shows operating spending by all municipalities across Alberta reached $7.8 billion in 2012. Fifty six per cent was spent on salaries, wages, and benefits.

"Since compensation costs represent the lion's share of their operating budgets, it is critical for mayors and councils to exert better control over rising municipal government operating expenses," Ruddy said.

"Otherwise, the upward spiral of more spending and higher taxes will continue."

She recommends municipalities limit spending increases to the rate of population growth, do formal spending reviews and adopt sustainable wage-and-benefit policies.

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