McKenney pledges 3 per cent property tax cap, no cuts to city services in campaign platform

Mayoral candidate Catherine McKenney is promising to maintain the city of Ottawa's current three per cent approach to property taxes and "no cuts to city services" if elected mayor on Oct. 24, as they outline the plan to fund $600 million in campaign promises over four years.

McKenney's financial plan, released on Thursday, outlines four "sources of incremental revenue" to finance platform commitments in the operational and capital budgets during the term.

The campaign says funding will come from; the "projected free balance" from property taxes and sources of revenue through city growth; using $90 million of "excess reserves" to accommodate inflationary pressures and support new priorities; pursue new federal funding opportunities; and use what the campaign calls "smart debt" to reduce future costs.

McKenney has unveiled several campaign promises during the election campaign, but Thursday was the first time McKenney unveiled a financial plan to detail how to fund the platform.

"My financial plan is ambitious and achievable," McKenney said in a statement. "Because you deserve bold plans for our city with the transparency of showing you how we’ll pay for it."

McKenney has said if elected, they will make "significant investments" in five platform priorities: Bold climate action, housing affordability, reliable and affordable transportation, making Ottawa a "world-class city for cycling", and "building the healthiest city."

According to documents released by McKenney's campaign, the major commitments in McKenney's campaign equal $343 million in operation spending and $315 million on capital projects over four years, including an additional $288 million for "reliable and affordable transportation." 

McKenney's campaign promises have included:

• Increasing transit service by 20 per cent, freezing fares and providing free transit to those 17 and under
• Building 25 years worth of cycling infrastructure over four years through issuing a $250 million green bond. McKenney's campaign says the project will be cost-neutral, paid back over 25 years with funding already in the budget for cycling infrastructure.
• End chronic homelessness by 2026 and transition over 300 families from motels to permanent accommodations
• Keeping pools and beaches open longer in the summer, supporting more youth in lifeguarding, opening all library branches on Sundays and waiving patio fees for the next two years.

McKenney says if elected mayor, the city would borrow $65 million through green bonds to make municipal buildings more energy efficient, "which will pay for itself in eight years through lower energy costs."

"In total over the next term of Council, we will borrow $315 million to fund energy efficiency and active transportation infrastructure – all of which will finance itself through cost savings or foregone future spending," the campaign said in its financial plan.

McKenney says as mayor, they would only take on "smart debt" that can save tax dollars in the future.

“Investing and retrofitting city buildings will start to pay back within eight years and will help us meet our climate action plans," McKenney told reporters.

"Building our safe cycling infrastructure is cost neutral. We are not going to have to spend more money every year for 25 years than we are already planning to. In both of these examples, we would have to ask ourselves- not so much, ‘Why would we borrow?’ but ‘why would we not borrow?’”

To help pay for the campaign promises and address inflationary costs, McKenney's plan says they would "deploy $90 million of excess reserves" to accommodate inflationary pressures and support new priorities. 

The campaign says the city holds cash reserves to protect finances against unexpected shocks to revenues or expenditures.  The city aims to hold between a minimum of 8.5 per cent and a maximum of 9.6 per cent of discretionary reserves as a share of total expenditures; but, Ottawa's discretionary reserves stood at 14.8 per cent of total expenditures at the end of 2022 – "This means the city was holding excess reserves of $205 million," the campaign said.

The campaign estimates Ottawa will have $267 million in projected "free balance" over the next four years, due to growth in property taxes and other sources.

McKenney says if elected, they would pursue funding through the Housing Accelerator Fund and the Active Transportation Fund, bringing $119 million into the city budget.

McKenney disagrees with the suggestion that this is a "spending" budget, that will put the city's finances at risk.

"We have to approach our budget with evidence. It has to be open and transparent, and I would suggest that with this plan, as Kevin Page said, it is the highest level of transparency, and that is what I am bringing to this discussion."

Former Parliamentary Budget Officer Kevin Page praised the financial plan presented by McKenney.

"Mayoral candidate Catherine McKenney has released a financial plan that sets a high standard for fiscal transparency. Key economic and fiscal assumptions, sources and uses of funds and debt sustainability considerations are clearly laid out," Page said in a release from the McKenney campaign. "This high level of transparency promotes policy debate, accountability and trust."

On Wednesday, candidate Mark Sutcliffe promised to cap property taxes between 2 and 2.5 per cent, and find between $35 and $60 million in savings at Ottawa City Hall.

McKenney says they would look for efficiencies, but says Sutcliffe's goal of finding millions in savings won't be possible.

"Is there any small bit of waste somewhere? We are always going to look for that, of course, we are going to look for reallocations," McKenney said.

"But, is there $60 million at the city of Ottawa? Absolutely not! Jim Watson would have found that, and we would have had a tax decrease."

Sutcliffe's campaign released a statement hours after McKenney released their financial plan, suggesting it would put Ottawa's finances "at risk."

"Catherine McKenney’s plan is extremely risky," Sutcliffe said in a statement. "It raids our city’s reserves, adds significantly to our debt, and will dramatically undermine the financial stability of our city. And the more concerning part is what that money is being spent on. We’re putting the city in a vulnerable position to achieve Catherine McKenney’s priorities, which are not the priorities of the vast majority of Ottawa residents."

Mayoral candidates Bob Chiarelli and Mike Maguire have proposed no new tax increase for 2023.