An ambitious proposal from within Edmonton's city council aims to tackle the growing disparity in property taxes and business attraction between the city and its neighbouring municipalities. Ward Dene Councillor Aaron Paquette has unveiled a long-term financial strategy that involves radically expanding a existing city fund to create a new revenue stream for municipal operations.
A Bold Financial Plan for Edmonton
Councillor Aaron Paquette presented his "money plan" at the Building Owners and Managers Association of Edmonton (BOMA) annual general meeting on November 4. In an interview with Postmedia, Paquette detailed his vision for addressing the city's fiscal challenges, which have been exacerbated by COVID-19 recovery costs, unprecedented inflation, and provincial funding cuts.
"Coming out of COVID-19 and unprecedented inflation, and now the tariffs — and also the deep provincial cuts, our budget has taken a beating," Paquette stated. "We could have the most efficient budget on the planet and you can beat the budget into submission, but you can't beat math. We are headed to an iceberg."
Scraping the Cupboards Dry
While some advocate for finding further efficiencies in the city budget, Paquette, who has participated in eight city budget deliberations across two consecutive council terms, insists that Edmonton has already exhausted all reasonable cost-saving measures.
"We've scraped the cupboards dry," Paquette emphasized. "There is no buffer here. People wouldn't believe it, because optics are everything but we're running lean."
Instead of further cuts, the councillor proposes building alternative revenue streams that would reduce the city's reliance on property tax collection. His solution focuses on the Ed Tel Endowment Fund, established in the late 1990s when the Edmonton Telephones Corporation was sold to Telus for $466 million after then-premier Don Getty privatized Alberta Government Telephones.
Transforming the Fund into a Sovereign Wealth Fund
The endowment fund has since grown to a value of $1 billion. Currently, the city uses approximately $48 million in annual interest to offset property taxes, while the remainder is reinvested into the principal. Paquette envisions transforming this fund into a sovereign wealth fund that could grow to $6 billion within 10 to 15 years.
"We've got to become as fiscally independent as humanly possible," he asserted. "We need a sovereign wealth fund. Obviously Norway did their thing, we were supposed to do it with the Heritage Trust fund but we never did — but can we do it in Edmonton? Yes — we already have the base for it."
The councillor calculates that if the fund reached $4 billion today, the city could achieve a zero per cent property tax increase. He also wants the city to pursue developers more aggressively to stimulate economic growth.
"The future has a funny way of sneaking up on you really quick," Paquette noted, "so when we get there let's make sure we've done everything we can to make this fund be so large that it pays for our tax increases and gives us a buffer against economic stress."
