On the UCP Budget, Being Vilified, and Fighting For Your City
Andrew Knack walks us through the 2021 UCP budget
If you know Edmonton Councillor Andrew Knack, you’ll know that he’s refreshingly non-partisan. In the current climate, where anti-NDP or anti-UCP takes seem to pass as actual analysis, Knack’s viewpoint is even more valuable as a result.
Rage Against the Municipal co-editor Tim Querengesser caught up with Coun. Knack hours after the provincial budget dropped last Thursday to capture his sense of what it means for cities and other municipalities. True to Knack’s brand, he didn’t spare any political party from criticism.
Tim Querengesser: What do you think? It’s clear the MSI gets a bump and then falls. But is it too early to know all of the pernicious ways the province might be taking a little bit more here and there from municipalities, like those that were being found after the infamous 2019 budget?
Andrew Knack: I still need a little more time to dig through everything. At a high level it doesn't look like there was much of an impact to the operating side. But there’s obviously a lot of significant challenges on the capital side. The MSI is a 25 per cent cut over three years, but let’s not forget that that is based on a cut that already occurred in 2019, in October, from [the UCP’s] budget, and then a further cut that occurred under the previous government, when we signed the city charter. So, we have to remember the cumulative impact really over the last five years. And then there’s the fact we’re then not moving into the new Local Fiscal Framework [editor’s note: not until 2024, two year later than originally scheduled], which wasn’t great, already, to be very fair, but at least would have provided a greater opportunity for some type of certainty. Essentially it means we continue to operate on this rollercoaster of a yearly cycle for capital funding as a city. That’s very hard for really any municipality, from small to large, but in particular it’s challenging in a larger municipality to not have the long-term certainty to plan for the infrastructure needs of a city that’s growing, at a slower rate, but still has many needs because we’ve grown so much over the last 10, 20 years.
Querengesser: Calgary Mayor Neheed Nenshi described this as a ‘caretaker’ budget that maintains the status quo. There’s been some talk that this year’s budget isn’t the austerity budget the UCP will eventually deliver. Are bigger cuts coming or is this sort of budget the new normal?
Knack: I think it’s the former. We’ll see more significant cuts in future years, probably next year — they wouldn’t do it in a provincial election year I’m guessing. But I’d agree with Mayor Nenshi that it’s a caretaker budget, but for a broken system. We’ve not been willing to deal with the challenges, so a caretaker budget just continues to dig us further into a hole. We’re still not willing to have an adult conversation about how we fund services and infrastructure. Every year we choose to not do so is another year we fall behind the rest of the world. I even see the NDP in some of their messaging today criticizing the additional deficit. That says to me that neither party is willing to do what needs to be done to get our fiscal house in order. We’re not dealing with the financial crisis that we’ve been in for a decade. And there’s not even hint that there’s a solution in the works.
Querengesser: Is there still a feeling in this budget that it will be the municipalities that carry the tax burden, that municipal leaders will have to raise property taxes to fund basics rather than the province having to be the bad guy raising taxes?
Knack: I think this budget doesn’t result in any further downloading, in the sense of operating costs, but don’t forget about the downloading we had last year, and the year before that, and the year before that. We’re dealing with a cumulative impact of downloading that isn’t getting any better. It might not be getting much worse this year but it doesn’t mean we should go celebrate because things didn’t get worse. Things are already in the scale of terrible so not getting worse than terrible is a win if you want to look it like that. I think it’s a loss. We’re not looking at the problem.
Querengesser: What’s Edmonton’s future looking like after today’s budget? You’re constrained as a municipality on how you can raise money. And after the pandemic, it seems like cities are going to win or lose based on quality of life.
Knack: That’s a tough one. If were weren’t so reliant on the province I’d actually be quite optimistic about the city. I believe most Edmontonians understand the need to continue to build up the quality of life to attract and retain people. The fact is we’re not on our own, though. We rely heavily on the province. Maybe I’ll say I’m cautiously optimistic because I do feel at a minimum that Edmontonians get that the status quo is completely broken. I feel like people in other parts of the province are starting to realize that this magical fairytale where we can have high-quality services and not be willing to pay for it has always been a fallacy. Now we know it, and I think there’s a willingness to finally tackle that. And this is not a partisan piece. I hope we’re going to see a change no matter who’s in government.
Querengesser: Is it not a partisan issue because both UCP and NDP in Alberta currently agree that they don’t want to advocate for a sales tax with voters?
Knack: I think there’s still political leadership in Alberta, really from both parties, that think Albertans are scared to have a conversation about the revenue, that if they raise this that it guarantees their demise. I’m sure there’s still 35 per cent of Albertans that absolutely feel that way. But if somebody was willing to have an adult conversation about the fact that we can’t afford to do what we’re doing and that there’s no way to cut the budget enough that would ever get us back to a balanced budget. That is impossible. Anyone who says it is is lying. I think more people in Alberta realize that and are willing to have that conversation now.
Querengesser: In the interim, there’s been a narrative that the spending is the problem and look at these cities and municipalities with their blue-sky projects that cost too much. Does this continue to hold cities back that are trying to win on that quality of life point? Is that the narrative we’re still in?
Knack: That narrative certainly exists. I don’t believe it’s a narrative that’s accepted by the majority. We just proved that narrative wrong in December. Edmonton’s council approved no tax increase, and yet we didn’t, as happened in the ‘90s, sell off all of our services, infrastructure programs, we didn’t stop LRT construction. And we still came in with no tax increase for the first time in 24 years. I think the narrative exists but we just proved it incorrect. Can you do that forever? No. Can you do it for at least another year and then be more gradual in how you come back? I think so. It is very possible for cities to deliver on the quality of life and still manage the budget effectively. Municipalities have to prove that virtually every year. We know how to manage budgets. Time and time again municipalities prove that they know how to manage budgets better than other orders of government.
Querengesser: Interesting. There’s so much in the language about municipalities in the budget documents that would seem to disagree, that seems to talk a lot about holding municipalities to account.
Knack: This has been the stance for the last two years, which is to try and vilify municipalities. And sure, it was easy to do when it was just Calgary and Edmonton. But you have to remember, over the last six months it’s not just Calgary and Edmonton speaking up; it’s municipalities of all sizes, and mayors and councillors from across the province. People who very likely voted for the current government are the ones speaking up saying, ‘No, we’re not the enemy here.’ We’re trying to help you succeed. And when you treat us as opposition, which is how we’re being treated right now, instead of partners, that makes it hard for the province to achieve their goals.
This interview has been edited for clarity and length.
An earlier version of this newsletter had the incorrect year on the header photo. It has been updated to 2021.
Graphic: Tim Querengesser/Canva
Want more on the budget? Here’s Calgary Mayor Neheed Nenshi and Edmonton Mayor Don Iveson speaking about it with the CBC’s Jim Brown on the West of Centre Podcast.