Exploring Edmonton’s Financial And Political Pressures And Ways Forward

Over the past 15 years, the City of Edmonton has found itself in an increasingly challenging financial situation. As Edmonton’s population grows alongside the demand for services, the city has struggled to keep pace with the added challenges it faces. With spending growing faster than revenues, the city is feeling the pinch. Residents, city workers, city councillors, and advocates are all sounding the alarm about the consequences of the band-aid solutions being deployed.Interviews we conducted for this report revealed that people are increasingly concerned about homelessness, mental illness, addiction, and the rising cost of living. The conditions from which these issues stem are primarily shaped by provincial and federal policy, yet it is the municipality that incurs the costs of responding to the outcomes. Funding services such as food banks, shelters, and low-income transit passes are examples of how decisions made by other levels of government can expand the municipality's responsibilities. In many cases, the municipality does not have the decision-making power to transform the policies that create or enable these conditions. Instead, they are left to handle the consequences and address the diverse concerns raised by various overlapping groups such as residents, workers, advocates, and lobby groups.The core tension the municipality faces is that it lacks sufficient financial resources to provide the extent and quality of services that Edmontonians need. The strain is being felt in multiple ways. First, the city finds itself with less money and more work due to cuts to provincial funding paired with creating conditions of crisis left for the city to address. Second, the money the city does have at its disposal is not always spent in ways that maximize returns, while potential revenue streams, including borrowing and developer charges, go underutilized.The impacts of reduced provincial transfers cannot be overstated. Between 2011 and 2023, provincial transfers for infrastructure fell drastically from $424 per Albertan to $154. Even before adjusting for inflation, the City of Edmonton now receives less funding than it did from the province in 2009. The city is fairly limited through the Municipal Government Act to rely on existing revenue streams, such as property tax, user fees, and development charges, and is forced to compensate for the lost funding through such avenues, ultimately impacting Edmontonians through monetary and service level losses.Despite these conditions, virtually nothing has changed in the distribution of Edmonton’s spending over time. This represents a clear-cut example of status quo decision-making and ample evidence that the current strategies are not working. Over-allocating funds to reactive services — such as police, fire, and EMS — needs to be examined to address the root causes of calls and continuous strain on ill-equipped systems.While many can readily recognize the need for change in Edmonton, the near-total breakdown in trust and collaboration between the province and the municipality further curtails avenues for positive change. Unable to find ways to engage with the province, the city passes the additional financial strain onto city workers. A consequently frayed relationship between management and workers (and their unions) proves to be a barrier to finding savings.To address fiscal strain, as well as improve management-labour relations and transparency with the public, we recommend the following: 1. Advocate for provincial reforms to the Municipal Government Act.By exploring the potential benefits of new tax streams, such as progressive property taxes, the municipality could reduce its reliance on provincial funding and gain greater control over its financial planning. Implementing these changes will require direct advocacy with the province to reform the Municipal Government Act. 2. Require substantial completion to slow urban sprawl.Density must be prioritized over sprawl for the City of Edmonton to meet the goals laid out in the city plan.