Catherine McKenney reveals financial plan to pay for mayoral platform, keep tax increases at three per cent

"I'm here to show you that ambition can be affordable."

Catherine McKenney has released a financial blueprint to show how they’ll pay for the transportation, housing, climate and other promises they’ve made part of their Ottawa mayoral campaign, while keeping property tax increases to three per cent and without cutting existing city services.

“I’m here to show you that ambition can be affordable,” McKenney said Thursday at a media briefing about that financial plan.

It relies on four funding sources, which the McKenney campaign says are above and beyond the city’s existing budget.

The first three are: projected annual growth in city revenues, based on maintaining the average seen over the last term and after accounting for inflation and population growth; drawing down $90 million held in city reserves, which they said totalled $680 million at the end of 2021; and securing new transfers from federal housing development and active transportation funds for municipalities.

For two new capital expenditures the financial plan maps out, the city would take on what the campaign describes as “smart debt” to the tune of $250 million and $65 million, plus an unspecified amount of interest, for McKenney’s cycling infrastructure plan, which they said would be paid off in principal and interest by the $15 million annually the city is already expected to spend on cycling, and for green building retrofits, which they said should be paid back within eight years and reduce the city’s future energy costs.

The new dollars required for McKenney’s major platform commitments on the operational side — the part of the municipal budget for which city isn’t allowed to incur debt or run a deficit — total $343 million over the four-year term. This includes: $288 million to increase transit operations, freeze transit fares, provide free transit to those 17 and under and reduce the cost of the Equipass for low-income Ottawans; $10 million annually for more diversion of organics from the waste stream and investment in biogas refinement to create renewable natural gas; and $16 million annually on rental allowances for people living in hotels and shelters and at risk of falling into homelessness, less money saved being spent now on those hotel spaces. 

The campaign says the funding sources they’ve identified — revenue growth, reserve funds and money from upper levels of government — will cover the platform’s operational expenses with plenty of room to spare, leaving in contingency $132 million over four years.

McKenney’s plan was announced a day after mayoral candidate Mark Sutcliffe released his financial framework, including a promise to increase property taxes between two and 2.5 per cent annually over his first two years — a break from the three-per-cent cap that Mayor Jim Watson stuck to over his last term and that McKenney is matching — and his own commitment that services will not be cut to pay for his platform.

The two leading candidates have traded criticism of their respective financial plans, with the $35 million to $60 million in savings Sutcliffe says he will find through eliminating vacant, non-essential city jobs and staff attrition as well as a strategic review of city spending being characterized by McKenney as “cuts” that will harm Ottawa residents.

 “Is there $60 million in efficiencies at the City of Ottawa? Absolutely not … Jim Watson would have found that and we would have had tax decreases,” McKenney told reporters Thursday.

Sutcliffe called McKenney’s plan “extremely risky.” Arguing that McKenney’s spending priorities weren’t aligned with those of most Ottawa residents, he said the plan “raids our city’s reserves, adds significantly to our debt and will dramatically undermine the financial stability of our city.”

In releasing the plan, McKenney included a positive review for its “fiscal transparency” from former Parliamentary Budget Officer Kevin Page, now president of the Institute of Fiscal Studies and Democracy at uOttawa, who said it “promotes policy debate, accountability and trust.”

Mayoral candidate Bob Chiarelli had a different take, concluding even before his competitors released their financial plans that “the numbers will effectively mean nothing. They’re just for show.”

Chiarelli has promised tax, fee and non-discretionary spending freezes in the first year of his mandate as well as a review of city operations to find efficiencies. After that, he’s told this newspaper that determining any property tax increase would be a year-by-year process rather than something he would commit to ahead of time.