Catherine’s Financial Plan

2023-2026 Financial Plan

Mayoral candidate Catherine McKenney is releasing their full financial plan before voters head to the polls, to clearly demonstrate how Catherine’s bold plan for a healthier, greener, and better connected city will be funded. Catherine will get this plan done while maintaining the current 3% approach to property taxes, recognizing that affordability is key as many in our community struggle to make ends meet. 

The 2022 City of Ottawa operating and capital budgets amount to approximately $5 billion, which provides the flexibility to fund new priorities. Catherine has been involved in the City budget for many years as a Councillor, and before that, as advisor to the City’s senior management. Catherine and the campaign’s team of economists know where to find the flexibility in these budgets and are sharing those insights now. This document outlines four sources of flexibility to support new priorities, and costs out platform commitments.

Chart shows Catherine's plan would make up 1.1% of the City budget for 2023. Refer to data tables on this page for details.

Budgets are about choices. Catherine will curb the influence of corporate interests at City Hall and will stop putting municipal tax dollars into unnecessary projects like subsidizing Porsche dealerships, in order to save the City money. 

Catherine is among the first mayoral candidates in the country to ever release such a thorough platform costing.

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. This high level of transparency promotes policy debate, accountability and trust.

— Kevin Page
President, Institute of Fiscal Studies and Democracy, University of Ottawa
Former Parliamentary Budget Officer of Canada

 

Sources of Funds

Four sources of incremental revenue can finance platform commitments in the operational and capital budgets, as summarized in the tables below. As Mayor, Catherine will continue the current 3% approach to property taxes and there will be no cuts to city services.

 

1. Projected Free Balance 

Over the last term of Council, City revenues from property taxes and other sources grew on average at 4.6% a year. Assuming the status quo for the next term of Council, and taking into account official annual average projections for growth in population and inflation of 4.1% combined, then the 0.5% difference is a free balance in City revenues that can be allocated to different priorities. That free balance amounts to $267 million over the next four years.

2. Reserve Management

The City holds cash reserves, to protect our finances against unexpected shocks to revenues or expenditures. We aim to hold between a minimum of 8.5% and a maximum of 9.6% of discretionary reserves as a share of total expenditures.

As of the end of 2021, Ottawa’s discretionary reserves stood at 14.8% of total expenditures. This means the City was holding excess reserves of $205 million. We will deploy $90 million of excess reserves to accommodate inflationary pressures and support new priorities.

3. New Partnerships with Higher Levels of Government 

Federal and provincial governments are increasingly looking to municipalities to help address housing affordability, climate action, transportation challenges and other issues of concern to Canadians.  Much of this funding is provided on a responsive basis, favouring municipalities that put forward concrete plans to deliver on shared priorities.

As Mayor, Catherine will ensure that the City proactively pursues two new federal funding opportunities, the Housing Accelerator Fund and the Active Transportation Fund, bringing at least $108 million and $11 million respectively into the City budget, which might otherwise end up going to other municipalities. We will bring home, at least, our fair share of any other future federal and provincial programs as they are released.

4. Smart Debt to Reduce Future Costs

Debt can be a smart fiscal move when spending today saves us money tomorrow. The City of Ottawa has the capacity to take on debt responsibly, in order to save the City money later on through investments that save the city money. We have the highest Aaa credit rating from Moody’s Investor Services, and are easily within the debt limits set by the province and by the City itself.

Chart of credit ratings. Ottawa has the highest possible rating alongside the federal government, higher than Toronto, Montreal and Ontario

We will borrow $65 million to make municipal buildings more energy efficient, which will pay for itself in 8 years through lower energy costs.

We will also take on a cost-neutral project for safe cycling infrastructure, which will be paid for through the money that the City is already spending on cycling. We accelerate 25 years of projected spending on cycling infrastructure into the next 4 years. 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.

Uses of Funds

The costing of major platform commitments for the City’s operational and capital budgets are summarized in the tables below. The cost of the platform is less than the available incremental resources that have been identified. The residual balance serves as a contingency, providing us with a cushion against unexpected economic shocks.

This platform allows for significant investments in five platform priorities. Detailed tables of specific expenditures in these areas are provided in our technical background document.

  1. Bold Climate Action

    The City will make the investments required to put Ottawa on a path of net-zero emissions by 2050, through building retrofits, electric vehicle infrastructure, waste diversion and renewable biogases, and expansion of the tree canopy. After savings from energy efficiency and revenues from renewable energy, these actions will cost $24 million over the term of Council.

  2. Housing Affordability

    Ottawa will end chronic homelessness by 2026, transition over 300 families from motels into permanent accommodations and accelerate middle-class housing affordability. After savings and transfers from higher levels of government, housing investments will amount to $21 million over four years.

  3. Reliable and Affordable Transportation

    Ottawa will reinvest in reliable and affordable transit that you can rely on and which takes you where you need to go, on time. Our $288 million 4-year plan includes increasing transit service by 20%, freezing fares, reducing the cost of the EquiPass and providing free transit to those 17-and-under.

  4. A World-Class City for Cycling

    Ottawa will accelerate 25 years of bike infrastructure spending into four years, in order to build an All Ages and Abilities cycling network over one term of Council. Building out a full bike network now, through issuing a $250 million green bond and paying down the principal and interest on that bond through our expected $15 million annual bike infrastructure spending over the course of our Official Plan, will be cost neutral, or even net positive if less wear and tear on our roads means lower road repairs.

    Chart shows 25 years of cycling infrastructure could be built in 3 years through a Green bond investment

  5. Building the Healthiest City

    Investments to make Ottawa more vibrant, prosperous and fun include keeping pools and beaches open longer, supporting more youth in lifeguarding, opening all library branches on Sundays, enhancing support to community service agencies and waiving patio fees for the next two years. These actions amount to $10 million over the next four years.

This is Catherine’s financial plan, which is accompanied by a longer technical briefing document.

Read Financial Plan — Technical backgrounder

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