The Numbers Don’t Lie: Downtown Takes More Than It Gives

Earlier this week, City Council's Urban Planning Committee discussed a perceived need for more Downtown spending. At its core, the justification is that Downtown is critically important to Edmonton's economy. The reality is that the economic activity generated by Downtown tends to stay Downtown, as one Councillor pointed out.

On the day of the Committee meeting, advocates for Downtown wrote an Op-Ed about how wonderful this investment was. When it came time for the meeting, these activists, along with others, showed up with outstretched hands and palms up, demanding more like some entitled version of Oliver Twist. 

As I'm sure you've guessed by now, I'm no fan of this proposal. Personally, I'm opposed to much of the Downtown spending. However, I've been seeing mixed results on my survey, with the largest portion feeling neutral towards it. If the residents of Ward Karhiio elect me as their representative and largely decide they want more Downtown spending, I will honour their feedback. However, simply put, Downtown already elects a representative to advocate for them, they don't need more. I want to advocate for Ward Karhiio.

Regardless of the election outcome, I do feel strongly that the City and advocates for Downtown need to stop the propaganda machine that pushes misinformation. When Council members are making decisions that directly impact you, they need to do so with accurate and reliable information. The report discussed this week was anything but genuine. Let me break it down. 

First, the employment numbers. The report states, and the Administration's presentation affirms, that there are 69,353 jobs Downtown. While this is likely true, the report also implies that these jobs are from 1,632 businesses. What they don't tell you is that:

• There are only 1562 unique businesses

• At least 88 of these businesses are government employers

• Anywhere from 5,000 to 35,000 of these jobs are public sector jobs

  • (Note that employment numbers from the City's cited source were provided as a range. I don't trust they were able to accurately calculate exactly how many jobs there are.)

So when these activists tell City Council they need more public dollars to create more private sector jobs, but use public sector jobs to inflate the job creation numbers, I find it very disingenuous. The stats are compelling enough without artificially inflating it, so why embellish it? 

Next, let's look at the spending. The report states that over the last 10 years, there has been $5B invested into Downtown, and only $1.9B has been public investment. In reality, I believe the numbers to be much higher. The $5B barely accounts for the Valley Line LRT (West and Southeast combined). However, for the sake of conversation, let’s take it at face value. When we analyze the cost of just the current projects, we can see there is a very clear discrepancy between our capital dollars and where they are going. The largest line items are LRT related and somewhat obscure the data. What I find interesting, is that despite the various LRT lines being sold as a benefit for Downtown, they are being tracked as spending in other wards. When we consider just Downtown, as it’s listed on OpenData, the total is $234,798,340. 

These figures are only reflective of current projects and do not include the other generous spending on Downtown projects over the years such as the Funicular, Experience Jasper (remember the ping pong tables on Jasper Ave?), the Arena deal, and the list goes on. 

Now that we have an idea of what Downtown spends, let's take a look at what they contribute. At its peak, Downtown contributed 10.1% of the tax base in 2010, equating to about $83 Million. In 2025, they contribute 5.2% ($119.6M). On average over the 16-year period, they contributed 7.6% per year. As a data enthusiast, I went through the City's Open Data website, found every tax account in the City, applied the estimated tax (based on the City's tax calculator) to each one of the approximate 430,000 tax accounts, and totalled it up by ward. This is what I found:

When we consider the debt servicing costs of just current projects for Downtown, we’re looking at paying about 12-20% of the tax revenue generated by Downtown. When we factor in the cost of one LRT line, the debt servicing cost alone exceeds the tax revenue Downtown generates. Now imagine what the total bill is when we add up all the spending on Downtown-focused projects over the last 10 years that we’re currently repaying. We’re already way over what they pay in taxes, and we haven’t factored in the costs of day-to-day public services.

It’s now 1:55 AM as I write this, and I need to be up in four hours. As a member of the public, I shouldn’t have to go through this much effort to hold my representative accountable. I would expect them to do this information gathering and act accordingly instead of burying their head in the sand. City Council members not only have access to more information to provide better context they also have staff members and City resources to help them put this information together. It seems the only tool they want to use is more taxes for you.

I'm not looking to advocate for the whole city. I'm looking to represent Ward Karhiio, which pays 10.45% of the tax base. This amount is comparable to the Ward representing Downtown. However, our spending is not nearly as much as Downtown. We receive lower quality service levels for snow clearing, less frequent transit service, and we have to pay on top of our taxes for road and sidewalk renewal. When this City Council approved the Zoning Bylaw Renewal, the overall assessment value was shifted from Downtown to the suburbs. As a result, we pay a bigger share of the tax pool. As if that's not bad enough, the City, the Downtown activists, and even our own current City Councillor suggest that we are the roots of the City's financial problems. 

The bottom line is that Ward Karhiio pays more in taxes than it receives in services. We are not the problem. The problem is when Downtown fails to spend within its means.

So while I understand that most of the spending in this proposal is actually coming from the Downtown CRL, there is still a subsidy from the general budget and there is still a mentality at City Hall that Downtown is the only part of the City that matters. 

They say Downtown is the heart of the city. If that’s true, then we’re on a path for a major heart attack, unless we start to take better care of our financial health.