Minding the City’s own Business

Concept Drawing of the Blatchford Development

In a previous blog about business, I talked about reviewing what barriers exist to starting a business. What could City Hall do to alleviate them and help create more opportunities for Entrepreneurs? While there are many steps we can take to help people start a business, we also need to review current practices that cause obstacles to retaining businesses. 

Given the struggles business owners face today, I’m pretty sure most owners wouldn’t be happy to have new competition. Certainly, even less would be happy if the government arbitrarily decided to become their competition. I’m not gonna beat around the bush, I’m talking about the City owning and operating a development company. I know not a lot of love out there for developers, but let’s take that part out of the equation for now; should the City of Edmonton start businesses to compete with other businesses? 

Honestly, it’s a question worth exploring. The City owns EPCOR which is a privately run corporation, so I understand the perspective that we could do it, but EPCORs business model is as a public utility, so I think there’s some context that gets lost in translation. 

Regardless, let’s explore Edmonton as a developer. 

As tempting as it is to use the City’s overall on-budget/on-schedule figures, I recognize that building an alley is much different than building a home. So I believe looking at Blatchford is the most relevant example. Based on their own targets they set for themselves, we should have built 4,250 units. As of today, the City has completed about 235 units. There are two things I find interesting about these numbers. First, the City is clearly unable to develop housing in a timely fashion, even in a housing emergency; second, the City claims this project is on schedule.

We’re looking at over $600M borrowed dollars paid back over 25 years, for a total cost of nearly $1B. The annual debt servicing cost is about $32M/year, or roughly the equivalent of about 1.5% of the taxes. For perspective, the debt servicing cost of just Blatchford is about the same cost as funding the entire Edmonton Public Library department. With the project starting in 2015 and scheduled to be completed in 2040, that means the project will be paid off at roughly the same time it’s completed. Being stuck with the debt is the problem here. The projected 500 units being built each year are supposed to cover the annual debt payment for that year. If the units aren’t built, the revenue to cover the debt doesn’t exist. Guess who is on the hook for the missing repayment funds? 

When we borrow money for an investment, I think it’s fair to want to see that investment start paying itself off sooner rather than later. In the case of Blatchford, the debt will be paid off before the project is finished. Meanwhile, the infrastructure deficit is in the billions. This capital could go a long way to addressing that deficit. Not to mention, how many extra units could have been built over the last 10 years if the land had been sold to a private developer? Can you imagine how that would’ve helped prepare us for the recent population increase? It’s speculative, but I bet the answer is a lot higher than 235.

So regardless of your sentiments towards the developers we need to ask, should the City of Edmonton be in the business of competing with private businesses? 

I think not.

In my opinion, the City is tying up land that developers could use to build homes at an expedited rate. We are in a “housing emergency” after all. I use quotations because this City Council likes to talk the talk, but they fail to walk the walk. The bottom line is that if they were truly taking the housing emergency seriously, they would consider using all the tools in their toolbelt. I understand that the City Plan is to accommodate 2,000,000 people within the city’s existing boundaries, but the City Plan is wrong. We need to treat this like an emergency or admit that it’s purely performative. Ironically enough, the City Plan projected that 2,501 to 5,000 people would have moved into Blatchford over this Council’s term.

As I write this blog and I see these facts and figures in front of me, right from the city’s website, I become extremely frustrated. I see that the city made a plan, raised taxes to implement the plan, and then didn’t stick to the plan. The worst part of it all is there’s no expression of remorse; there’s no apology; and no accountability. There are only excuses. They blame the high-migration numbers, Covid, other orders of government, inflation, previous City Councils, and the list goes on. I am hopeful that if they keep spinning around and pointing the finger, they’ll eventually point at a mirror - then they’ll finally be pointing at the ones responsible for the disasters we face today. 

It’s really a matter of mismanagement. Yes, this Council has only been there for three years, but what have they done to improve things? Outside of government, in the real world, three years is a lot of time and a lot can happen in that time. The next Council needs to set the tone. They need to move like they’ve got somewhere to be. The longer we delay accountability for poor planning and terrible ideas that don’t coincide with the plans, the more our taxes are going to go up. We’re 4,000 housing units behind schedule in Blatchford, yet we tell people the project is on schedule. The budget is 12.5% above what was originally approved, yet we tell people the project is on budget. How many people have been held accountable for these failures? None. 

This is why we need a new City Council. Someone needs to step up and make the hard decisions. I suspect the incumbent Councillor will claim that to deliver a tax decrease, city services must be cut. That’s a disingenuous statement, but just to be clear: The Development projects of the city are considered a service the City delivers. I intend to make the motion(s) required to deliver an estimated 1.5% tax decrease for you regarding these “services”. It’s my hope that my colleagues on Council will support me in this endeavour.  

It’s still early in my survey results and community conversations, but I’m getting the general sentiment that people want a Councillor who will take action. They want a Councillor who will stand up for them - not to them. They want accountability when the City is raising their taxes and still unable to deliver the basic services we deserve like roads, sidewalks, and fire stations. If this sounds like something that resonates with you, then I am your candidate. While the incumbent treats governance like a social gathering, I will take a different approach and treat it like a responsibility. 

The party’s over - it’s time to clean up.

What do you think?