CALGARY HERALD COLUMN: Chamber Should Stop Pushing for Residential Tax Increase

Calgary’s economy has been through a lot over the past decade. From a recession and a pandemic to high inflation, both businesses and families have felt the pinch financially.

With that in mind, it’s disappointing that Deborah Yedlin and the Calgary Chamber of Commerce are continuing to push for families to pay more in taxes. They continue to do this by lobbying city hall to collect a larger portion of its revenues from homeowners and a smaller portion from businesses. 

There is a better approach.

Imagine if the city reduced inefficient spending instead of raising taxes. That would help both businesses and the people who shop in their stores — everyday Calgarians.

Understandably, the chamber wants to ease the tax burden its members are paying — city hall’s tax increases have been severe. Many readers will remember how businesses around the city began disclosing the large tax increases they faced a few years ago. The former German restaurant Wurst noted on its large outdoor sign that its 2014 property taxes were “$74k” and rose to “$208k” in 2019. It has since gone out of business.

At city hall, we find a very different scene. Despite claims by the city that it has tightened its belt, total expenditures have increased 20 per cent since 2015. Life has remained comfortable there while those outside of government circles have struggled.

Note that in 2018, three years after Calgary’s economy went into a recession, the city’s administration was spending nearly $8 million each year on retirement bonuses for staff — bonuses that were completely detached from performance. You could literally be the worst-performing employee in the city government but still receive a large handout on the way out the door.

This anecdote is important for two reasons.

First, it’s council’s job to look under every stone for savings. Clearly, that wasn’t happening as it took a third party to expose this problem (I exposed this issue while working for the Canadian Taxpayers Federation).

Second, council can’t count on city administration to bring forward reasonable ideas on how to reduce spending on compensation for city staff — they face an obvious conflict of interest.

Readers should consider another compensation issue that continues to burn quietly at city hall: pension costs.

Outside of government, less than one in four workers has a workplace pension. But at the City of Calgary, not only do the vast majority of employees receive a pension, nearly two thousand city employees will also receive a generous top-up pension when they retire. In fact, more than 200 city employees will receive three city pensions when they retire. Must be nice. 

SecondStreet.org research shows the city spent more on top-up pensions ($10.9 million) for its staff in 2018 than Edmonton, Montreal, Toronto, Ottawa, Mississauga, Brampton, Halifax, Vancouver, Winnipeg and Saskatoon combined. Yes, combined.

 

The basic pension plan that almost all city employees receive, the Local Authorities Pension Plan, is also quite generous. It cost the city $76 million in 2009, but by 2019, the annual cost for this pension had ballooned to $137 million. Why hasn’t council tackled this problem, considering it has ballooned so much? Perhaps councillors are concerned that doing so would draw more attention to their own golden pensions?

While many private sector employees have taken at least one pay reduction over the past decade, city data shows there has never been a pay reduction for its main bargaining units over the past 49 years

The easiest way to address these issues would be for the city to phase in lower, more reasonable compensation packages for new staff.

Hopefully, the chamber can see there are plenty of opportunities for savings. The people who shop at Calgary businesses and dine in local restaurants can’t afford to pay more to city hall.

Colin Craig is the president of SecondStreet.org, a Calgary-based, conservative-leaning think-tank.

This column was originally published in The Calgary Herald on November 4, 2023.

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Prevention – reduce demand in the first place

If Canadians lived healthier lives, we could reduce demand for emergency services, orthopaedic surgeries, primary care and more. 

For instance, if you visit the Canadian Cancer Society’s website, you’ll read that “about four in ten” cancer cases are preventable. The Heart and Stroke Foundation notes that “almost 80 percent of premature heart disease and stroke can be prevented through healthy behaviours.” A similar number of Diabetes cases are also preventable. 

Many joint replacements and visits to ERs and walk-in clinics could also be avoided through healthy living. 

To be sure, not all health problems can be avoided through healthy living – everyday the system treats Canadians with genetic conditions, helps those injured in unavoidable accidents and more.  

But there is an opportunity to reduce pressure on the health care system through Canadians shifting to healthier lifestyles – better diets, more exercise, etc. 

To learn more, watch our Health Reform Now documentary (scroll up) or see this column. 

Partner with non-profits and for-profit clinics

European countries will partner with anyone who can help patients. 

It doesn’t matter if it’s a non-profit, a government entity or a private clinic. What matters is that patients receive quality treatment, in a timely manner and for a competitive price.  

In Canada, governments often delivery services using government-run hospitals instead of seeing if non-profit or private clinics could deliver the services more effectively. 

When governments have partnered with non-profit and private clinics, the results have often been quite good – Saskatchewan, Ontario and British Columbia are just a few examples of where partnerships have worked well. 

Canada should pursue more of these partnerships to reduce wait times and increase the volume of services provided to patients.  

To learn more, watch our Health Reform Now documentary (scroll up) or see the links above. 

Make cross border care more accessible

In Canada, citizens pay high taxes each year and we’re promised universal health care services in return. The problem is, wait times are often extremely long in our health system – sometimes patients have to wait years to see a specialist or receive surgery. 

If patients don’t want to wait long periods, they often have to reach into their own pocket and pay for treatment outside the province or country. 

Throughout the European Union, we also find universal health care systems. But a key difference is that EU patients have the right to go to other EU countries, pay for surgery and then be reimbursed by their home government. Reimbursements cover up to what the patient’s home government would have spent to provide the treatment locally. 

If Canada copied this approach, a patient waiting a year to get their hip operation could instead receive treatment next week in one of thousands of surgical clinics throughout the developed world. 

Governments benefit too as the patient is now back on their feet and avoiding complications that sometimes come with long wait times – meaning the government doesn’t have to treat those complications on top of the initial health problem. 

To learn more, watch our Health Reform Now documentary (scroll up) or this shorter video. 

Legalize access to non-government providers

Canada is the only country in the world that puts up barriers, or outright bans patients from paying for health services locally. 

For instance, a patient in Toronto cannot pay for a hip operation at a private clinic in Toronto. Their only option is to wait for the government to eventually provide treatment or leave the province and pay elsewhere. 

Countries with better-performing universal health care systems do not have such bans. They allow patients a choice – use the public system or pay privately for treatment. Sweden, France, Australia and more – they all allow choice. 

Why? One reason is that allowing choice means some patients will decide to pay privately. This takes pressure off the public system. For instance, in Sweden, 87% of patients use the public system, but 13% purchase private health insurance. 

Ultimately, more choice improves access for patients. 

To learn more, watch our Health Reform Now documentary (scroll up) or watch this short clip on this topic. 

Shift to funding services for patients, not bureaucracies

In Canada, most hospitals receive a cheque from the government each year and are then asked to do their best to help patients. This approach is known as “block funding”. 

Under this model, a patient walking in the door represents a drain on the hospital’s budget. Over the course of a year, hospital administrators have to make sure the budget stretches out so services are rationed. This is why you might have to wait until next year or the year after for a hip operation, knee operation, etc. 

In better-performing universal health systems, they take the opposite approach – hospitals receive money from the government each time they help a patient. If a hospital completes a knee operation, it might receive, say, $10,000. If it completes a knee operation on another patient, it receives another $10,000. 

This model incentivizes hospitals to help more patients – to help more patients with knee operations, cataract surgery, etc. This approach also incentivizes hospitals to spend money on expenses that help patients (e.g. more doctors, nurses, equipment, etc.) rather than using the money on expenses that don’t help patients (e.g. more admin staff). 

To learn more about this policy option, please watch our Health Reform Now documentary (scroll up) or see this post by MEI.