Open letter: Calgary Chamber 2024 Service Plans and Budget Adjustments Submission

November 14, 2023

Dear Mayor and Council,

On behalf of the Calgary Chamber of Commerce and our member businesses, I am writing to provide Calgary City Council with our recommended 2024 adjustments to the City of Calgary’s (City’s) 2023-2026 Service Plans and Budgets.

Municipal budgets are critical to supporting a vibrant and prosperous Calgary. The City’s 2023-2026 Service Plans and Budgets were ambitious in their goals, setting the stage for Calgary’s continued success as our city and businesses adjust to exponential population growth, rising costs and continued economic uncertainty. While Calgary is building momentum, the most recent data released as part of the Canadian Survey on Business Conditions indicates 51 per cent of Calgary businesses feel optimistic about the business environment over the next 12 months.

Bolstering this optimism will require strong public policy, with the City proactively adjusting Service Plans and Budgets to reflect the evolving needs of our communities and businesses. Locally, 58 per cent of businesses see rising inflation as their primary obstacle over the next quarter, with 36 per cent citing increasing interest rates and debt costs, and 31 per cent indicating labour-related challenges pose their most significant obstacle. While not all these challenges are resolvable by the City alone, the November adjustments must support Calgary businesses by identifying which new initiatives should be introduced or improved upon, while strengthening existing supports, programs and services.

Developed through consultation with our members, we are pleased to provide the attached submission to City Council to inform their deliberations on adjustments to the 2023-2026 Service Plans and Budgets. Expanded upon in greater detail below, we encourage the City to:

• Prioritize fiscal responsibility, revenue diversification, and red tape reduction to support businesses by stabilizing taxes and eliminating redundant or unnecessary costs.  
• Springboard Calgary’s early-stage businesses by enhancing access to existing funding programs and ensuring municipal procurement facilitates greater access to the City as an institutional client for products or services  
• Remain focused on building a safe and secure city, acknowledging that real and perceived public safety concerns have a direct impact on the success of local businesses and they communities in which they operate.
• Position Calgary as a magnet for talent by advancing strategic infrastructure investments that enhance livability and workplace inclusion, diversity, equity and accessibility.

The City’s Service Plans and Budgets are already yielding results. However, implementing the above recommendations will bolster progress by addressing the obstacles to business growth.

Thank you in advance for your consideration. We look forward to continuing to work with Council and City Administration to accelerate Calgary’s economic growth.

Sincerely, 

Deborah Yedlin

President & CEO    

Calgary Chamber of Commerce    

Recommendations for inclusion in the 2024 Service Plan and Budget adjustments

The City’s 2023-2026 Service Plans and Budgets have been successful in fostering economic momentum for the city. However, data released as part of the Q3 2023 Canadian Survey on Business Conditions shows business optimism declining nationally and locally, indicating challenges remain. The cost of inputs continues to rise, inflation remains, supply chain challenges restrict access to essential inputs, and persistent labour shortages continue to hamper business growth. Stemming from these challenges, 44 per cent of Calgary businesses anticipate an increase in their operating expenses in the next quarter, while 31 per cent expect a decrease in profitability. Moreover, 55 per cent of businesses are hesitant to take on more debt for growth due to a lack of confidence or uncertainty regarding future sales. Taken together, it is clear the success of Calgary’s business community remains both uneven and uncertain.

The Calgary Chamber collaborated with our members to identify priority amendments for Service Plans and Budgets that would have the most significant impact on supporting businesses in the upcoming year. Based on this input, we encourage City Council and City Administration to implement the following recommendations:

Prioritize fiscal responsibility, revenue diversification, and red tape reduction

Businesses are struggling with the challenges of rising costs, high inflation, and supply chain disruptions. To alleviate some of the corresponding impacts, the City must prioritize fiscal responsibility, revenue diversification, and red tape reduction. This will provide the City with predictability in revenue, as well as support businesses by stabilizing municipal taxes and eliminating unnecessary costs. To this end, we encourage the City to:

• Immediately implement a two per cent tax shift from non-residential to residential property owners to alleviate the cost burden on businesses. While subsequent, incremental shifts will be required between 2024-2026 to appropriately rebalance the tax share, ultimately achieving a 60:40 residential to non-residential split, implementing an immediate shift this budget cycle is necessary to ease cost pressures for businesses and ensure Calgary remains a viable and competitive jurisdiction to operate and grow a business.
• Amend the Local Access Fee (LAF) structure after undertaking a comprehensive review of comparative jurisdictions, including the City of Edmonton, where fees are calculated based on utility consumption rather than a regulated rate. Upon review, re-invest windfalls received from the LAF to offset rising costs, including higher costs experienced by businesses.
• Based on the options available to the City under the Municipal Government Act (MGA), prioritize closing municipal revenue gaps through the implementation of alternative revenue generation mechanisms. Where changes to the MGA may be required, work with the Government of Alberta to identify and advance the required legislative amendments.
• Support the continued role of civic partners in Calgary’s economic development by ensuring their access to predictable and sustainable funding. This will require the City of Calgary work with civic partners on the development of a new Civic Partnership Program that includes tangible and measurable key performance indicators for the allocation of funding, ensuring all civic partners’ funding requests are evaluated equally.
• Review processing times for issuing City permits and licenses, identifying inconsistencies in timeframes for approval between different types of applications. Where inconsistencies exist, work with City Administration to implement changes that support the standardization of processing and approval times so that businesses can accurately predict when they will receive a permit or license. Additionally, develop an online system where businesses can access status updates on their applications, including when they have been actioned by City Administration.
• Engage local businesses and other stakeholders to identify existing gaps in communication channels used for connecting with City Administration. Where gaps exist, work with impacted stakeholders to simplify and improve these channels, such as continuing to enhance the Business Experience Representative pilot program.
• Implement an online feedback mechanism that enables businesses to share input with the City regarding processes or regulations that may be ineffective due to excessive costs, complexity in accessibility and navigation, or the creation of redundant and inefficient processes.
• Maximize the City’s access to grant and funding programs by continuing to cultivate collaborative relationships with provincial and federal governments. Access to capital from other orders of government will be critical to minimizing costs to Calgarians and local businesses as the City undertakes large-scale, capital-intensive projects, such as the those outlined in the Downtown Revitalization Strategy.

Leverage Calgary’s early-stage companies as economic accelerators

Calgary is home to one of Canada’s fastest growing and most diverse tech and innovation ecosystems. With over 900 local startups and scaleups, and the ecosystem being valued at $2.7 billion, it is evident that supporting the growth of these businesses is essential for sustained economic growth as well as Calgary’s continued economic diversification. For the sector to realize its potential as a catalyst for economic growth and diversification, we encourage the City to:

• Engage local early-stage companies in a review of the City’s Social Procurement Program to streamline processes and ensure the program remains simple and accessible for early-stage companies. Many local businesses do not apply for municipal procurement opportunities, citing complex application processes that demand too much of their limited time.  
• Based on the procurement thresholds agreed to in the New West Partnership Trade Agreement, develop clear and measurable targets for the percentage of procurement contracts awarded to local businesses for goods, services, and construction (i.e., 15 per cent of all contracts for goods under $75,000 must be awarded to a local business). This will support the growth of early-stage companies by allowing them to work with an institutional client such as the City to demonstrate proof-of-concepts.
• Leveraging the success of the Business Experience Representative program, create a specialized procurement unit within City Administration dedicated to supporting early-stage companies with navigating the procurement process. This unit should proactively engage early-stage businesses to gain an understanding of their operations, working with them to identify procurement opportunities where they would be a competitive applicant.
• Provide financial support to local start-ups and scale-ups to facilitate affordable or no-cost access to vacant B and C class office space downtown. This will alleviate a significant cost for many early-stage companies and support downtown revitalization efforts. Moreover, advance a dedicated ‘scale-up tower’ in downtown Calgary, creating a space where multiple early-stage companies can congregate to share ideas, grow their networks, and seize additional opportunities for growth.

Remain focused on addressing public safety and security

Public safety concerns, whether rooted in perception or reality, continue to hamper civic vibrancy and business success. Issues such as open-air drug use, random attacks, theft, or break and enters deter individuals from visiting communities and negatively impact the time they are willing to spend visiting businesses or new quadrants of the city. While the Calgary Chamber recognizes there are many systemic issues that contribute to public safety and security concerns, we encourage the City to: 

• Advocate to the federal government for urgent bail reform that ensures repeat, high-risk and violent offenders remain behind bars.
• Utilizing existing CPS funding, develop a police report tracking application that can provide businesses and Calgarians with relevant, up-to-date information on the status of police reports they’ve filed.
• Promote positive engagement and interactions in public spaces, including transit stations, by collaborating with local businesses to activate public spaces through events such as reoccurring markets, retail pop-ups, art installations, or musical and theatrical performances.
• Conduct a cost-benefit analysis on whether to re-establish a full-service or limited-service police station in the downtown core. Provide a recommendation to City Council and the Calgary Police Commission on a path forward by the 2025 Service Plans and Budgets adjustment cycle.

Position Calgary as the destination of choice for worldwide talent

While Calgary’s population continues to grow at record rates – a net positive for our economic outlook – a series of challenges continues to create obstacles to both attracting and retaining the labour businesses require to grow and succeed. Examples of ongoing obstacles include accessing funding for hiring, a shortage of skilled tradespeople, and the declining affordability of housing in the city. Recognizing the long-term success of our business community and economy is contingent on overcoming these obstacles, we encourage the City to:

• Lead by example in the employment and development of new grads by developing a City-run municipal student work experience program, similar to the Alberta Municipal Internship Program or the Federal Student Work Experience Program.
• Immediately begin development of the Foothills Multisport Fieldhouse project approved by Council on July 4th, 2023, recognizing that investments in civic spaces are a competitive advantage in talent attraction by enhancing Calgary’s livability and community vibrancy.
• Unlock funding that supports office to post-secondary conversion in the city’s downtown core. This includes evaluating additional financial and tax-based incentives that will support post-secondary institutions in expanding or relocating to Calgary’s downtown, recognizing additional funding mechanisms will be required to successfully advance these projects.
• Action the recommendations outlined in the Housing and Affordability Task Force strategy to maintain Calgary’s competitive advantage when it comes to affordability, ensuring we can continue to attract the necessary talent businesses need to operate and grow.
• Working with other levels of government, invest in new transportation infrastructure, including rail connecting the Calgary Airport to downtown and beyond to enhance Calgary as an international convention and event centre.
• Continue to advance strategic infrastructure projects including the Green Line LRT and the Event Centre and Culture + Entertainment District.
• Work with businesses to review grant and funding programs to ensure their application and fund dispersion timelines are aligned with common business operating schedules. This will ensure available supports are both useful and can be accessed by businesses.

Implementing these recommendations during the 2024 Service Plan and Budget adjustments offers the City a roadmap to continued growth by reinforcing and building upon the optimism of our local businesses. As the voice of Calgary’s business community, the Calgary Chamber is committed to working collaboratively with City Council, City Administration, other orders of government and key stakeholders to advance these priorities.

ABOUT THE CALGARY CHAMBER OF COMMERCE

The Calgary Chamber of Commerce exists to help businesses reach their potential. As the convenor and catalyst for a vibrant, inclusive and prosperous business community, the Chamber works to build strength and resilience among its members and position Calgary as a magnet for talent, diversification and opportunity. As an independent, non-profit, non-partisan organization founded in 1891, we build on our history to serve and advocate for businesses of all sizes, in all sectors across the city.