A Calgary that works When the City works, business works. And when business works, we all work.
Since the 2013 Calgary Election, our world has changed. In October 2013, our great city was booming. The unemployment rate was at 4.6%, the price of oil was hovering around $100/barrel, and the biggest issue facing our business community was finding enough talented labour to fill job openings. From the municipal election in October 2010 to the municipal election in October 2013 Calgary added over 93,000 jobs.
Calgary’s downtown office vacancy rate is the highest of any major global city.
and is unlikely to return to what it once was.
Business activity is less impressive heading into this election. Between 2014 and 2016, Calgary lost roughly $4.6 billion in economic output. This is $800 million more than was lost in the City during the global recession of 2008. In 2016 alone, 7,124 businesses closed their doors.
During the last municipal election, Calgary was going through a growing period. The population in Calgary was soaring, reaching 1.1 million people, with net migration peaking at 19,067 in 2013. In 2013, Calgary had 12,584 housing starts (defined as the beginning construction on a new house), reaching a peak of 17,131 new homes in 2014.
In 2014, 16,104 new businesses incorporate in Calgary. In 2016, that number was down by 8.5%. Our economy has taken a very large hit, and while recovery is forecasted, it is unlikely that our economy will return to the way it was in the near future.
Businesses have had to make some tough decisions in order to survive. Difficult times call for different approaches and innovations with respect to how we do business in our City. We need City Hall to do the same. While City Council has tried to do things differently, there is more that can be done. Jobs, capital investment and the tax base may be further eroded if they do not take action.
Things are much different heading into the 2017 Municipal Election. In 2016, Calgary lost 6,527 people in net migration, and by the end of 2017, housing starts are expected to fall to 44% of 2014 levels. Vacancy rates in Calgary have also skyrocketed. In 2016, Calgary’s residential vacancy rate for all dwellings rose to 4.3%, up from just 2% in 2014. Calgary’s apartment vacancy rate reached 6.9% in 2016, a level not seen since Calgary’s Great Recession from 1982-84. And at nearly 30%,
Calgarians didn’t just lose economic and business activity. We lost many good paying jobs. Calgary’s problems are not just business problems Calgary’s economic woes have impacted all Calgarians. Through the downturn, tens of thousands of our neighbours have been laid off, and today, many are still seeking full-time work. Our unemployment rate, which was the envy of other major Canadian cities, is now the highest. This isn’t a short-term issue. While business leaders are optimistic about the future, nearly 80% believe the economy has fundamentally changed,
We need A Calgary that Works. We need a Calgary that is Efficient, Equitable, and Entrepreneurial.
SUMMARY OF RECOMMENDATIONS Contain annual spending increases within a “Smart Spending Bandwidth” – the combined rates of inflation plus population growth.
Lock the business and residential tax rates to a fixed ratio with a goal of achieving a 2.85:1 ratio during the next City Council term, and a 2:1 ratio within 10 years.
Put in place a fast track process when outdated, or a lack of, regulations are preventing a business from operating.
WHAT DOES EFFICIENCY MEAN IN A CALGARY THAT WORKS?
In A Calgary that Works, the City’s expenses are kept to a reasonable level, a level that ensures a good quality of life but with the lightest possible cost burden to business and residents. This results in taxes that are manageable and bearable, enabling business to continue to grow, invest, and hire. In A Calgary that Works, jobs are created because new businesses can start-up quickly, and current businesses are not held back by inefficient duplication, bureaucracy, or red tape. An efficient city means that processes are lean, quick, and consistent. In A Calgary that Works, Council is disciplined in keeping expenses at the lowest level necessary, by looking for best practices, and benchmarking the delivery of services against other leading cities. WHY IS CALGARY NOT CURRENTLY EFFICIENT? For multiple terms of City Council, going back close to ten years, Calgary has had a government that lacked fiscal discipline and overspent, provided services at a cost that is not comparable to other leading jurisdictions, and held businesses back with excessive bureaucracy and red tape. This is contradictory to the current Council’s priority for a “well-run city,” and Calgary cannot claim to be efficient. And recently, this has compounded the negative effects of the economic downturn. As a result, businesses have closed their doors, staff have been laid off, and Calgary is becoming a harder sell to potential businesses and talent for relocation. We asked Calgary businesses to identify their biggest municipal issues. The Chamber’s Calgary Business Leader Market Perceptions survey indicated that the best ways governments could help business was to adopt a more business friendly tone and attitude, reduce property taxes, and remove regulatory barriers. Calgary is becoming a less competitive place to do business, as the costs of doing business – including those from property taxes – continue to increase. Calgary, like all municipalities in Alberta, is governed by provincial legislation called the Municipal Government Act (MGA). The MGA, while allowing cities to borrow money from provinces for capital spending like infrastructure, requires all municipalities to run a balanced operating budget each year (this may soon change as the new draft city charter proposes to give Calgary and Edmonton the ability to balance their budgets over a four-year cycle). The City determines how much money it will need for the year, then, based on all its revenue sources, assesses whether it will have enough revenue to cover the operating budget. As illustrated in Figure 1, with only limited means for raising revenue, if the City increases spending, its main lever to cover these costs comes from either residential or business property taxes. In fact, a 3% increase in costs is associated with a 5% increase in property taxes.
FIGURE 1: Revenues & Expenditures – Tax Supported Service Areas
Source: City of Calgary Action Plan 2015-2018
When spending is not constrained, if processes are inefficient, and if policy or programs are unproductive, then costs increase. And when costs go up, more revenue is needed to cover those costs. That means tax increases eventually follow. As illustrated in Figure 2, the level of municipal spending and total property taxes paid by Calgarians are closely related. Since 2008, the City’s spending has increased by 64%. During that same period, Calgary’s total property tax bill has increased by 58%.
In fact, Calgary’s spending has exceeded what spending would have been if City Council had followed the popular limit of inflation plus population growth, referred to as the “Smart Spending Bandwidth” (see Figure 3). Since 2009, average annual spending has outpaced the Smart Spending Bandwidth. While average annual inflation and population growth has been 3.4% since 2009, average annual spending increases have been nearly double, at 6.5%. This has driven the requirement for additional taxes at a similar rate, leading to a cost structure and tax revenue requirement that is untenable going forward, and made even more so in the economic downturn. FIGURE 2: Relationship Between Spending and Property Taxes
City Spending vs Property Taxes Collected
2,000,000,000
3,000,000,000 2,500,000,000
1,500,000,000
2,000,000,000 1,000,000,000
1,500,000,000 1,000,000,000
500,000,000
500,000,000
0
0 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total Municipal Spending (Operating)
Municipal Property Taxes
Source: Various City of Calgary Annual Reports
FIGURE 3: Actual Spending vs “Smart Spending”
City Spending 3,825,105,000
Municipal Spending ($)
Municipal Spending ($)
3,500,000,000
Municipal Property Taxes ($)
2,500,000,000
4,000,000,000
3,625,105,000 3,425,105,000 3,225,105,000 3,025,105,000 2,825,105,000 2,625,105,000 2,425,105,000 2,225,105,000 2008
2009
2010
2011
2012
2013
2014
2015
2016
Total Municipal Spending (Operating) "Smart Spending" (Inflation + Population Growth) Source: Various City of Calgary Annual Reports
Had the City increased spending each year to within the Smart Spending Bandwidth of inflation and population growth since 2008, the City’s expenses would have been $743.6 million lower in 2016, with total savings since 2008 reaching over $4.6 billion. To put that into perspective, $4.6 billion is roughly the same amount as the total costs of the proposed Green Line LRT, and the amount of total lost economic output during the 2014-2016 recession. This overspending is eroding Calgary’s competitiveness as a place to do business. Business simply cannot afford to continue to pay for spending that is unreasonable and uncontrolled. To rectify this problem, the City needs to address current inefficiencies in service delivery by ensuring their performance, and therefore spending, is aligned to benchmark performance against other leading jurisdictions. Municipal Benchmarking Network Canada – a partnership between Canadian municipalities – identifies and collects consistent and comparable data on municipal services to determine where efficiency gains could be made in each jurisdiction. Based on their 2015 Performance Measurement Report, some areas where Calgary can improve, include: •
Fleet vehicles – Calgary owned and operated 67% more fleet vehicles per capita than Toronto, and 32% more than Ottawa. The City also paid $0.06, and $0.41 more per kilometre more than Toronto and Ottawa respectively. It cost Calgary 6% more for each kilometre driven than Toronto, and 57% more than Ottawa.
•
Operating costs for governance and corporate management – These costs for The City of Calgary were 5.8% of the operating budget. Toronto and Ottawa paid 2.6% and 2.7%. If Calgary’s governance and corporate management costs as a percentage of the operating budget were the same as Toronto, the City would have saved $118 million.
•
Total cost for human resource administration – Calgary human resource costs were $1,599 per employee. This was 13% higher than Toronto, and 92% higher than Ottawa. At $1,599 per employee, Calgary’s human resource administration for full time employees cost the City $26.1 million. If Calgary would have brought these costs down to $1,000 per employee, which is still above the median for all cities in the report, the City would have saved $9.8 million.
•
Total Cost for Garbage Collection per Tonne – Calgary’s garbage collection costs were $153 per tonne. This was 72% more than Toronto where costs were $89 per tonne, and 70% more than Ottawa where costs were $90 per tonne. If Calgary’s garbage collection costs equaled that of Toronto’s, Calgary would save $28.7 million from residential collections alone. The 2015 Performance Measurement Report compares collection costs for all properties, not just residential – much of the inefficiencies could be coming from commercial collections rather than residential pickups. Therefore, determining where garbage collection inefficiencies are occurring should be an important area for the next City Council to explore.
Inefficient processes and activities, and ultimately spending, not only costs taxpayers money, it also puts a strain on business activity. Take the current property assessment appeals process for example; Calgary businesses have found the process expensive, time consuming, and complex. Currently, if a property owner does not agree with the assessed value of their property they can appeal through the Local Assessment Review Board. Property tax assessments are handled on the basis that every year is a new year, so businesses are forced to appeal (even if they win) year after year. Furthermore, there is no mechanism for mediation or resolution once a complaint has been filed, nor an Ombudsman to deal with assessment issues the Board does not resolve. The assessment appeals process is expensive for businesses, and places a large burden on Calgary’s resources. A successful appeal doesn’t provide a mechanism to recover legal or administrative costs. This kind of inefficient and challenging process must change. The inefficient City spending and processes are placing a serious strain on Calgary’s business community – especially in this tough economic environment, when many government policies continue to increase business costs. Increased corporate income taxes, minimum wage hikes, carbon levies, and rising property taxes are driving up the cost of running a business, all while revenues and incomes drop as a result of fewer customers, and reduced investments. In 2017, a typical medium-sized business (less than 500 employees) will likely pay an extra $75,000 due to minimum wage hikes, property tax increases, and the carbon levy. In 2018, this figure will increase to $162,000. In addition to these direct costs, the administrative burden, long wait times, and regulatory uncertainty are just as harmful to businesses. Businesses are facing difficult decisions as to how to pay for higher costs when fewer dollars are coming in the door; including layoffs, reduced staff hours, reduced investment, reduced salaries, or even closure. This cannot continue. We have already seen the loss of many Calgary businesses, jobs, and, ironically, reduced the tax base. For example, after nearly three decades of serving Calgarians, Abruzzo Ristorante closed their doors, citing the continual increase in operating costs, particularly property taxes. Unfortunately, Abruzzo is not the exception. Many Calgary restaurants have closed, citing high and unstainable costs, including increased property taxes. Along Stephen Avenue alone, we have seen Escoba, Trib Steakhouse, Divino Wine and Cheese Bistro, Mango Shiva, and Double Zero Pizza close their doors. This list is far from exhaustive. There are many other businesses that have already closed their doors, with many others rumoured to be near their tipping point if things don’t change. In fact, a record number of businesses – 7,124 – closed their doors in 2016. Among those businesses was one of Alberta’s oldest – western-wear store Riley & McCormick. This is why operating efficiently is such a big deal. When our government doesn’t operate efficiently, overspending occurs, leading to higher property tax bills and unnecessary time and compliance costs. Businesses like Abruzzo close their doors, and their staff are left looking for other ways to provide for their families. Given all the other costs being placed on the business community, it is more important than ever that Calgary’s next City Council prioritize operational efficiency.
HOW CAN CALGARY OPERATE EFFICIENTLY?
The Chamber recommends that City Council contain annual spending increases within a “Smart Spending Bandwidth” – the combined rates of inflation plus population growth. This will ensure necessary services continue to be provided, while guarding against inefficient program delivery and climbing property tax bills.
One of the best ways to encourage a thriving business community is for the City to keep its tax burden low. To do this, program delivery must be efficient to ensure overspending does not occur. While we applaud The City of Calgary for participating in a benchmarking study and working with other large cities across Canada to compare performances in service delivery, we urge the next City Council to seek efficiencies to become the leading jurisdiction and achieve performance and costs closer to their best performing peers. Business and individual tax payers understand that operational and program spending are necessary to meet the demands of city services. To ensure necessary services can continue to be provided, while guarding against inefficient program delivery and climbing property tax bills, City Council must put a limit on spending increases. A prudent limit would be to keep spending increases below the rates of inflation plus population growth, known as a “Smart Spending Bandwidth.” Since 2009, average annual spending, at 6.5%, has nearly doubled average inflation and population growth – 3.4%. Ensuring that annual spending increases stay within the Smart Spending Bandwidth could help achieve multiple positive outcomes. First, it will provide an incentive for City Council to provide services more efficiently, as overspending on any one service will mean less money for other services. Second, it may discourage the implementation of unnecessary regulations and procedures. Finally, as property taxes are strongly related to increases in spending, any savings in spending can be used to reduce Calgarians’ property tax bill. As discussed above, had the City stayed within the Smart Spending Bandwidth since 2008, total savings would have been $4.6 billion. How might the City look to address its cost structure? While this is for City administration and Council to ultimately determine, options that should be considered include: 1. Bringing costs into line with the municipal benchmarks of peer cities and best practices; 2. Looking at cutting some non-front line and non-essential service delivery; 3. Outsourcing certain City provided functions like waste collection; 4. Decreasing regulation, and ensuring existing regulation is required, useful, mitigates unintended side effects, and is measured on achieving the intended results, 5. Implement a Regulatory Impact Assessment process for any new or existing regulations; and 6. Reducing the amount of “study” that Council directs administration which increases timelines and costs into the system. City administration has estimated that overtime costs for council meetings running late can be up to $10,000 per meeting.
There is no doubt that many government services provide large social benefits. However, government spending also comes at a cost – higher property taxes paid by Calgary businesses and households. To eliminate any unnecessary spending – and larger tax bills – the next City Council must work to address inefficient service deliveries, and unnecessary regulations.
WHAT DOES EQUITABLE MEAN IN A CALGARY THAT WORKS?
In A Calgary that Works, businesses and residents pay their fair share for City services and growth. With the high office vacancy rate, and many Calgarians still looking for work, it is more important than ever that the City does everything possible to ensure a competitive business environment. Especially in this current economic climate, businesses can ill-afford to pay an unfair share of City services. Creating a competitive environment for businesses starts with creating a property tax structure that is equitable. WHY IS CALGARY NOT CURRENTLY EQUITABLE? It is generally accepted in cities across Canada that business contributes the majority of property tax revenue compared to the residential tax base. Another way of looking at this is that business is subsidizing the citizens of any given city to provide a high quality of life at a more affordable cost in terms of local taxes. While business generally accepts this principle, it is clear that in Calgary, this principle has been continually taken advantage of; it’s clear that businesses over contribute to City revenues. With the economic downturn, and the resulting high office vacancy downtown, the City’s revenue model is now facing extreme risk, with hundreds of local small and midsized businesses being pushed to the brink of bankruptcy. The City classifies property as residential and non-residential (“business”), and calculates a separate property tax rate for each. This tax rate is then multiplied by the property’s assessed value to determine the municipal property tax bill. In 2017, Calgary’s business-to-residential property tax ratio was 3.5:1 (including the consolidation of the business tax). The means the business rate is 3.5 times the rate of residential. As showing in Table 1 below, this ratio has increased in every one of the last four years.
TABLE 1: City of Calgary Historical Property Tax Rates YEAR
BUSINESS
RESIDENTIAL
RATIO
2017
13.8819
3.9633
3.50:1
2016
12.1545
3.7090
3.28:1
2015
10.7367
3.5409
3.03:1
2014
10.6938
3.7470
2.85:1
Source: Data collected from the City of Calgary, http://www.calgary.ca/CA/fs/Pages/Property-Tax/Tax-Bill-and-Tax-Rate-Calculation/Historical-Tax-Rates.aspx
The business-to-residential property tax ratio is higher in Calgary than any other large cities in Alberta (see Table 2). Calgary businesses also pay a greater share of property taxes than most major cities across Canada (see Table 3).
TABLE 2: Mill Rate Ratio (Non-Residential-to-Residential) Among Alberta’s Five Largest Cities CITY
RATIO 2016
RATIO 2015
RATIO 2014
CALGARY
3.28
3.03
2.85
EDMONTON
2.75
2.76
2.65
RED DEER
2.17
2.13
2.04
LETHBRIDGE
2.41
2.39
2.44
GRAND PRAIRIE
1.58
1.65
1.61
AVERAGE (EXCLUDING CALGARY)
2.23
2.23
2.19
Source: http://www.municipalaffairs.alberta.ca/municipal_financial_statistical_data
Although this is a good broad strokes comparison between several large cities in Canada, it’s important to note that there are differences in how municipalities calculate mill rates and tax properties. For example, Calgary includes the consolidation of the business tax into their non-residential mill rate and Toronto includes a municipal land transfer tax on the purchases of all properties.
TABLE 3: Mill Rate Ratio (Non-Residential-to-Residential) Among Large Canadian Cities in 2017 CITY
BUSINESS
RESIDENTIAL
RATIO
CALGARY
13.88
3.96
3.50
EDMONTON
16.87
6.01
2.81
VANCOUVER
5.80
1.26
4.60
SASKATOON
7.52
WINNIPEG
13.06
TORONTO
13.77
5.87
1.28
13.06
1.00
4.80
2.87
OTTAWA
17.12
8.89
1.93
AVERAGE (EXCLUDING CALGARY)
12.36
6.65
2.42 Source: Various Municipal Websites
The recent economic downturn in Calgary has made it clear that the current tax model can no longer work. At nearly 30%, Calgary has the highest downtown office vacancy rate of any major global city. The large increase in office vacancy – due to the economic downturn – translated into to a $4 billion drop in property values of office buildings in Calgary’s downtown core. Because the City has the same operating budget regardless of changes in property value, they had to make up their budget shortfall somewhere. This resulted in the redistribution of taxes in 2017 from downtown, to our surrounding business communities such as the Beltline, and more suburban business and industrial locations. Approximately 6,000 businesses outside the downtown core saw their taxes increase significantly, some as much as 200%. City Council worked to address this looming impact, and for that we applaud their 2017 tax rebate program. Working with the Calgary Chamber and Calgary Economic Development, the City allocated $45 million for a one-year Municipal Business Phased Tax Program that capped property tax increases at 5%. The $45 million tax relief fund was a necessary and important move by City Council to support the business community. However, it is a one-year solution, and there is no known plan in place for 2018 or beyond. It is also speculated that property values in the downtown core have not yet bottomed out. While business leaders are optimistic about the upcoming year, nearly 80% believe the economy is fundamentally changed, and unlikely to return to what it once was. A one-time tax relief program – while beneficial in the short term – will not solve the problems that the current tax structure presents. Forecasts predict the property value in Calgary’s downtown core will be
lower in 2018 than we saw in 2017. This means that we will face a similar situation in 2018 as we did in 2017. Whether City Council will do a similar cap using reserve funds is unknown. This represents a huge risk to many businesses who face compounding costs from other levels of government – through higher minimum wages, increasing carbon levy, internal trade barriers, and a higher corporate income tax rate (to name a few). Businesses can no longer afford to bear the brunt of municipal service costs and a revenue model that has become extremely inequitable. In fact, the situation will remain until property values return in the downtown, or spending is reduced to eliminate the need for higher taxes. Neither of these scenarios is likely in the short term – therefore a longer-term fix is needed. The high downtown office vacancy will not be addressed soon, and businesses in the surrounding communities will not be able to foot the bill. Continued higher taxes without a rebate will likely force many to the point of closure.
HOW CAN CALGARY BECOME MORE EQUITABLE? Calgary needs a financial model that can better adapt to the new economic realities facing the city. To ensure that the burden of municipal services doesn’t fall onerously on businesses, the business and residential mill rates should be locked to ensure a fixed property tax ratio. This will spread economic shocks (such as the drop in oil prices that have occurred) across the entire tax base, instead of falling only on the business community. In the next 4 years, City Council should lock the business and residential mill rates to ensure the ratio be set at 2.85:1 – the same level that occurred prior to the recession in 2014. City Council should also set a tenyear target to reduce the ratio to 2:1 – a level that is competitive with other large cities in Alberta, and Canada. The Chamber recommends the business and residential tax rates be locked to a fixed ratio, with a goal of achieving a 2.85:1 ratio during the next City Council term, and a 2:1 within 10 years.
It is not unrealistic to say that we are in a dire situation. Without the rebate program, many local businesses could not have paid their tax bills, let alone continue to pay for further increases in future years. If the tax ratio in Calgary was more equitable this revenue shortfall from the downtown buildings would have been spread more evenly over a larger tax bases, from all properties, business and residential over multiple years. The draft city charter proposes to give Calgary and Edmonton the ability to balance their budgets over a four-year cycle. While the Chamber is opposed to governments regularly running deficits or accumulating debt for operational spending, balancing the budget over a four-year budget cycle, if used in a disciplined matter, can be beneficial by allowing the City to spread economics shock across multiple years, rather than significantly increasing property taxes in a single year.
WHAT DOES ENTREPRENEURIAL MEAN IN A CALGARY THAT WORKS?
In A Calgary that Works, City Council says “Hell yes!” to new ideas and new business models. There are many factors that help create a successful business community. Along with keeping costs competitive, processes efficient, and the tax system fair, there is an attitude in some cities that encourages innovation and entrepreneurship. We are competing against cities all over the world. Cities who are jumping at the chance to pilot self-driving vehicles, drones, or even just new brewpub concepts. It’s time to create A Calgary that Works, where we celebrate new ideas, we celebrate new businesses, and we create new jobs. That starts by saying: “You have a business idea? Hell yes! We can do that.” WHY IS CALGARY NOT CURRENTLY ENTREPRENEURIAL? We are a city that has taken pride in our entrepreneurial roots. However, we seem to have lost some of that. Too often we’ve found reasons not to do things, to slow things down, or delay decisions, rather than saying “Hell yes!” and finding a way. The City needs to find more ways to remove barriers, and support businesses in providing creative solutions to today’s complex problems. Instead of barring new businesses from entering Calgary or holding back existing companies with new ways of operating because regulations are not currently in place, processes should be established that allow market entry as quickly as possible. Calgary has demonstrated the capacity for innovation in the past by adopting ideas like the ParkPlus system, Food Truck Pilot program, and the car sharing service Car2Go. The food truck program was a good example of the City quickly adapting to a new business model. By beginning with a pilot program, the City learned what worked, without over-committing city resources and was able to incorporate those lessons into the final regulations that were developed. The City has also amended the Land Use bylaws to make it easier for buildings in the Centre City Enterprise Area to be converted from office buildings into residential space. This amendment eliminates the requirement for a Development permit, and in most cases instead only requires a Building permit. It would be encouraging to see this type of efficient process extended to buildings throughout Calgary. While these examples illustrate the positive and innovative efforts made by The City of Calgary, they are the exception rather than the rule. We need to strive to make this the rule. While the city has shown willingness to work with innovative companies in the past, it has also proven to be slow moving at times. A key example of this is the ridesharing bylaw that was eventually passed in April 2016. The two largest global ridesharing companies were founded in 2009 and 2012 respectively. Even though these companies were extremely disruptive to the traditional taxi industry, they were able to expand rapidly thanks to demand for their efficient business model. The cities that recognized their citizens wanted more transportation options quickly adapted to allow this innovative approach to transportation service delivery. Unfortunately, Calgary was slow to recognize this demand, and took until 2016 to put rules in place for ridesharing. An entrepreneurial city would have immediately recognized the opportunity that this new service
delivery model represented, and ensured rules were put in place to allow these companies to operate. We have seen other examples of the City being less than willing to work with new and innovative business models. The years of debate and frustration that City Council underwent to deal with secondary suites, is another example. We are one of the most outdated global cities when it comes to secondary suite policy and legislation. The fact that City Council cannot unite to create an opportunity for increased affordable housing in Calgary at no cost to the taxpayer is simply unacceptable.
The City of Calgary should look to other leading cities for new and innovative ways to work with businesses to solve community problems. Some examples where other cities are leading in terms of innovative policies include: EDMONTON In 2011, Edmonton was the first Canadian city to receive an IBM Smarter Cities Challenge award. This award recognized Edmonton’s innovative use of information technology to benefit its citizens. The work that Edmonton has done to make all the data on the City and its infrastructure and operations open, has been an invaluable tool that has allowed innovators and entrepreneurs to find ways to make life and business better in their city. It is time to unlock the vault of data. In partnership with Enerkem, the City of Edmonton is converting municipal solid waste into clean biofuels and green chemicals, such as ethanol and methanol. The Enerkem Alberta Biofuels facility is helping Edmonton to reduce the volume of waste sent to landfills by over 100,000 metric tonnes per year.
NEW YORK CITY Many complex problems these days are being solved by incentive prizes whereby a pool of money is made available to the winner of a competition aimed at solving a certain problem. New York’s BigApps competition released city data to the participants and encouraged them to develop mobile applications to solve city-wide problems. Some of the winners included apps that identified healthy food options at nearby restaurants, helped parents find child-care, and helped homeowners calculate savings for a variety of solar power options.
VANCOUVER Earlier this year, the City of Vancouver sponsored an open data competition. One of the winners came up with a budget visualization and editing tool that makes it simpler to understand and present municipal budgets. Through these types of competitions taking place in Vancouver and New York, Calgary’s next City Council can enable global minds to solve some of our biggest challenges like funding and finance, affordable housing, and transportation and infrastructure.
LONDON, ENGLAND London implemented solar powered benches that provide free wi-fi and the ability to charge mobile devices. These cities are adjusting policies and regulations, allowing their businesses and residents to take advantage of new technologies, innovative business concepts, and open data. These cities are keeping up with the pace of innovation and business. With the economic conditions that we are facing in Calgary, and the competition globally for technology companies and their offerings, it’s crucial that the next City Council work hard to ensure that they keep up with the pace that businesses looking to operate in Calgary need them to in order to succeed. For Calgary to continue to be a world class city, it needs a municipal government that is ready to work with businesses to solve complex problems in innovative ways. Unfortunately, many Calgary businesses do not have the impression that City Council has an “open for business” attitude. The Chamber’s recent Calgary Business Leader Market Perceptions survey indicated that one of the main ways the municipal government can support business is having a more business friendly perspective. This simple, and free, change would show that the City understands the importance of the business community, appreciates the work they do to create jobs, and recognizes the challenges they are facing.
HOW CAN CALGARY BECOME MORE ENTREPRENEURIAL? The Chamber recommends City Council put in place a fast track process when outdated, or a lack of, regulations are preventing a business from operating. A task force of innovative business leaders should be created to recommend to the City how they can better encourage and embrace new and disruptive business models.
We are competing against cities all over the world. Cities who are jumping at the chance to pilot self-driving vehicles, drones, or even just new brewpub concepts. It’s time to create a Calgary that celebrates new ideas, new businesses, and creates new jobs. That all starts by saying: “You have a business idea? Hell yes! We can do that.”
Technological innovation is quickly changing what it means to run a business. In fact, technology is allowing for new business models that could not have been foreseen in the last election. This is why a Hell yes attitude is so important. A Hell yes attitude means giving different business models the opportunity to be tested and tried with the best conditions to succeed. Removing barriers to business creation can allow for new and creative ways to solve the world’s current problems This all starts by creating a legislative process that will allow council to have pilot programs, or fast track the change or implementation of bylaws and regulations when the absence, or lack of updated rules is preventing a business from operating. Similar efforts have been made in other leading cities in North America. In Chicago, a Special Deputy for Regulatory Reform was appointed to ensure the City’s regulations do not fall to the wayside as new services and business models emerge. A similar process should be established in Calgary. City Council should also look to its past success with the Food Truck pilot program when approached by businesses looking to provide services to Calgarians in new and innovative ways. To assist with the creation of new policies or fast-tracked regulations, City Council should seek recommendations from a task force of innovative business leaders. To this extent, the City can follow the example of Toronto’s innovation team. In partnership with Bloomberg Philanthropies, Toronto put together an Innovation Team, tasked with solving municipal problems by creating partnerships with outside individuals, groups, and businesses. An “Innovation Task Force” can be put in place in Calgary to help advise the City on how to be nimble, and better embrace new and disruptive business models. Moving forward, we need a City Council that is willing to support transformation, and willing to work with new business models. If the City had a framework in place to quickly adapt regulations, permits and by-laws when required, it would have a leg up on the competition. At the same time, the City should review and remove old regulations and policies that are no longer required. Calgary would be in a much better position to attract world class entrepreneurs and businesses. Entrepreneurs understand the importance of getting stuff done. Like many budding entrepreneurs, its time for City Council to take pride in its ability to “get stuff done” and get regulations passed so new businesses can provide Calgarians with services, and jobs.
CALGARY CHAMBER 600, 237 8th Avenue SE Calgary, AB T2G 5C3
T 403 750 0400 Policy@CalgaryChamber.com CalgaryChamber.com @CalgaryChamber