As the citizens and ratepayers of Thunder Bay prepare to welcome their new council, they can look forward to council tackling one of their first tasks - the 2027 budget. Given the recent election where the infrastructure deficit in Thunder Bay was raised as an issue by several of the candidates, it is instructive to look away to see how infrastructure deficits are affecting other municipal budgets. Case in point: Calgary.
Calgary has several infrastructure projects – a $49 billion dollar infrastructure gap - that require funding not least of which are a new transit project and substantial investments in their municipal water system. Recall, that Calgary has had some high-profile water main breaks and a recent review finds that poor management and underfunding to be a cause of problems.
In a nutshell, the 2027 operating budget for Calgary is going to be $6 billion while the capital budget is $4.4 billion. However, this is a multi-year plan and going forward to 2030 will see an additional $15.5 billion in capital budgets. As a result, the City of Calgary is proposing to borrow billions of dollars that will see its municipal debt rise from the current $3.7 billion to $10 billion by 2030.
The impact of this debt – aside from increasing the debt load relative to the city’s revenue – will be to increase debt service costs which of course are not a capital cost but an operating cost. How will Calgary deal with this? Well, the proposed municipal tax increase for 2027 is 15 percent. For 2028, a 10 percent increase is proposed followed by 7.7 percent in 2029 and 6 percent in 2030. In 2027, the increased proposed for a typical residence in Calgary will amount to $36.83 per month. This works out to an increase of $441.96. for the year. To this can be added an increase in the separate monthly water and waste utility increase of $14.50 per month which works out to an additional $174 annually.
In other words, the typical Calgary residential household will see municipal charges rise by $616 in 2027. Keep in mind that the total annual property tax for a median single detached home in Calgary with a median assessed value of $706,000 is $4,695 (of which $2,747 is the municipal portion and $1,948 is the provincial education portion). An increase of $441.96 on this typical municipal portion amounts to about 16 percent for the median single detached household. As well, the total water and waste charge for a typical single family detached home in Calgary in 2026 was $1,677. Thus, the total property tax (municipal and provincial) and water/waste fee bill in 2026 averaged about $6,372.
Going forward to 2030, municipal property taxes by 2030 will have increased by $1,320 annually for the typical single-family detached household. In other words, the municipal property tax portion of the tax bill will rise from $2,747 to $4,067 annually by 2030 – an increase of nearly 50 percent. Water and waste charges by 2030 will add an additional $1,128 annually bringing that to $2,805. By 2030 this will represent an increase in the water and waste charge for the typical household of 67 percent. So, from 2026 to 2030, the combined property tax and utility/user fee expenses for a typical home in Calgary (assuming the provincial portion of property taxes does not increase) will rise from $6,372 to $8,820 – an increase of approximately 38 percent. Well, at least there is no provincial sales tax in Alberta.
Of course, these are estimates based on my reading of the budget and this budget is likely to spark debate and the result may differ substantially from what is proposed. At the same time, keep in mind that during Thunder Bay’s recent municipal election, infrastructure was identified as a key election issue and the infrastructure deficit has been estimated annually at $30.6 million for the next 30 years. Assuming 50,000 households in Thunder Bay, this works out to about $600 extra per household for many years to come.
Is an extra charge for infrastructure on the table for the 2027 budget year? We shall soon find out. However, given that something like this may be in the pipeline, is it any surprise so many councillors opted not to run again in this fall’s election?
