Mayoral candidate Mark Sutcliffe promises tax cap of 2.5%, $35M in cuts

Mayoral candidate Mark Sutcliffe is promising to cap property tax increases at 2.5 per cent in 2023 and 2024 and says he'll find $35 million in savings partly by cutting 200 staff positions.

Because of high inflation, Sutcliffe told reporters Wednesday it's impossible to predict budget conditions for 2025 and 2026, but that he would work hard keep taxes as low as possible.

"I believe this is a credible, responsible and realistic framework that delivers affordability for Ottawa residents and respects the importance of funding critical services, including the vital programs that support our most vulnerable," he said.

Sutcliffe's property tax plan is even more frugal than that of outgoing Mayor Jim Watson.

Watson raised property taxes to three per cent in the current term, up from two per cent, and that was before inflation began to soar to highs not seen in 40 years.

Watson also didn't freeze transit fares or lower recreation fees for families and kids, as Sutcliffe is promising.

The mayoral candidate is also planning an increase of $4 million for community service agencies.

Sutcliffe's fiscal plan is assuming $40 million in tax revenue from new homes added to the city's roster this year, up from $31 million in growth revenue from 2021. It's from that $40 million in growth revenue that Sutcliffe said he'd fund his promise for 25 new police officers a year.

The plan builds in a "budgetary pressure" of $75 to $100 million for next year. In 2022, the city treasurer identified $110 million to simply "maintain services."

Do you really think that after 20 years of not reviewing the city finances that we can't find 1%? I think we can.- Mark Sutcliffe, mayoral candidate

As part of his plan to keep taxes low, Sutcliffe is promising a "full strategic review" of all operating and capital expenditures and said he can find $35 to $60 million in "efficiencies" or cuts.

In particular, Sutcliffe says, he would save $15 million by eliminating 100 vacant staff positions and also cut another 100 positions through attrition.

Sutcliffe promised no one would be laid off. 

He said he'd also cut $20 million in payments to consultants and other "external services."

When asked why he thinks he can find tens of millions of dollars in so-called efficiencies when others before him have had trouble doing so, Sutcliffe replied "Do you really think that after 20 years of not reviewing the city finances that we can't find 1%? I think we can."

One interesting promise is to cut two programs that subsidize property taxes for businesses.

The brownfields policy has seen about $100 million in property tax breaks since 2007 to companies to help clean up privately held contaminated land. The program began as a way to incentivize developers to build in the core, but it's unclear that sort of carrot is still necessary.

Sutcliffe would also nix the Community Improvement Program that waives property taxes for projects that are deemed to improve certain areas. The most controversial of these was the $2.9 million deal for a Porsche dealership in Vanier.

2 others would freeze taxes

Also on Wednesday, mayoral candidate Mike Maguire proposed no tax increase for 2023 to conduct a "complete program review" and to "have a dialogue with the residents of Ottawa on their spending priorities."

Maguire wants to fund next year's operations from hundreds of millions of dollars in a surplus expected by year-end. But it's not clear the surplus he's referring to is available for spending.

The issue lies in two different accounting methods used by the city.

One is the budget most of us are used to that shows how much money the city is spending and collecting. Under this system, the city isn't expecting much extra cash at the end of the year. (For 2021, the city had a surprise $53 million surplus.)

But municipalities are required to prepare a financial statement based on an accrual basis that represents all the city's net assets — financial and non-financial — and liabilities. In other words, according to city officials, that surplus is not cash the city has on hand.

According to the city's 2021 financial statement, the annual surplus results from the city "setting aside funds in its capital budget for the acquisition and renewal of assets at a rate that is greater than the amounts required to recognize historical capital costs based on amortization expenses."

Maguire wants to reduce, or even stop, the money being set aside — it's unclear if this is even feasible — for a single year.  

"The people need a break and, I have to tell you, I'm concerned about the lack of transparency with the details of the budget," Maguire told CBC. "I want to use this program review to flesh this out."

Candidate Bob Chiarelli was the first to promise to freeze taxes for 2023 and all new spending back in August.

He'd honour any signed contracts and has recently said he'd increase any needed spending in health and social programs, but also wants to conduct a full review of the budget. 

It's not clear how this could be accomplished given the fact that much of the city staff is contractually due for a raise — the city expected to spend an additional $81 million on compensation this year — and that inflation has increased the costs of labour and supplies.

Candidate Catherine McKenney announced last month that they plan to keep annual tax increases to three per cent and released their fiscal plan on Thursday.