12 Questions the Ottawa Budget Should Answer

Do you know what your City budget is prioritizing?

I’m always happy to hear from readers, but will be unable to respond to any messages until December 11.

How transparent is your budget?

Last summer, the CitySHAPES Substack, Fix Your City, published a list of 12 questions that every city budget should answer.

I’m reposting those questions here, customized for the Ottawa context, along with some answers from the 2024 budget documents.

Questions and (some) answers

1. How large is the total Ottawa budget, and how much is this per person or household?
   
   The 2024 Ottawa budget is $5.9 billion:
   - $4.6 billion in operations
   - $1.2 billion in capital spending.
   
   Although not reported in the Budget, that works out to:
   - $5,400 per person, or
   - $12,700 per household.
   

2. How much does the average Ottawa household pay in property taxes, and how does this compare to other cities and towns in Ontario?
   
   The Budget doesn’t provide this information, but Zoocasa does. Essentially, Ottawa property taxes are middle of the pack for Ontario, as per this chart from the Zoocasa website.

   

3. How much flexibility is there in the budget for spending on new priorities? How could the city raise additional revenues, other than by increasing property taxes?
   
   This is not considered in the Budget documents. But maybe it should be. One of the consequences of keeping taxes at 2.5% is that user fees have had to increase, on average, by 5% in this budget.
   

4. How much money can the city borrow for big construction projects like buildings, highways or parks? What could happen if we borrow that much?
   
   The City can borrow for capital projects (but not operations). The City can borrow up to an amount for which the annual debt servicing (principal and interest payments) is no more than 7.5% of its “own source” revenues — i.e., 7.5% of property taxes, user fees and other revenue streams that the City controls (so NOT transfers from other levels of government).
   
   Ottawa has outstanding debt of $3.2 billion, and its debt servicing amounts to 4.1% of own source revenues.
   
   The City does have another $2.6 billion in committed but unissued debt. The city is continually retiring debt and the budget does not report on how much debt headroom we have above existing commitments.
   
   Of note, the City’s 7.5% limit for debt servicing is self-imposed. The provincial limit is 25%, and the City could change its own limit at any point.
   

5. Does the budget clearly lay out the level of reserves by category, and identify whether there are any surpluses or deficiencies in reserves?
   
   All cities hold reserves — basically cash in the bank — to accommodate unexpected fluctuations in revenues or expenses. Since cities cannot run operating budget deficits, they need reserves to manage cash flows, given that a budget at the beginning of the year will differ from final revenue and spending numbers at the end of the year.
   
   The Budget tells us how much it expects to have in reserves at the start and end of the year, both in total and by specific categories.
   
   For Ottawa, total reserves are as follows:
   
   Start-2023: $663m
   End-2023: $533m
   End-2024: $436m
   

   These reserve levels tell a concerning story. Over the course of Mark Sutcliffe’s first two budgets, reserves have dropped by 34%.
   
   The City has an opaque methodology for assessing the target reserve levels, but does not report reserve levels against targets.
   
   To cut through the complexity, a simplified approach is that reserves should equal about 9% of total expenditures. Given Ottawa’s 2024 budget of $5.9 billion, by this simplified approach, Ottawa’s reserves have dropped to about 7.5% of total expenditures.
   

6. How much do we spend on “high-visibility” city services (e.g., snow removal, potholes, wading pools), and if we wanted to achieve a higher standard of service in any of those areas, how much would it cost?
   
   The Budget unfortunately does not provide this level of detail. Spending is aggregated into buckets at a much higher level, so it’s not usually possible to see in the budget how much we are spending on specific objectives.
   
   The staff report that accompanies the budget can provide additional information on any particular theme. For example, it provides more information on climate spending (see 11 below).
   
   The staff report also includes a short discussion of options for wading pools and portapotties for parks. That’s more transparency around the cost of different options than we normally see.
   

7. How much are we investing in transportation capital projects, and how is this divided between building new roads, widening roads, fixing roads, new public transit, upgraded transit, and building bike lanes and sidewalks?
   
   In the Transportation Committee budget proposal, we can see the total capital budget for roads. ($455 million in 2024, but which includes integrated sewer and road repairs). The proposal breaks these projects down into half a dozen buckets, but does not provide the sort of granularity noted in the question. If you already know what projects are about, you might be able to put together a story of, for example, how much we are spending on widening roads or on building bike lanes, but otherwise, it’s just a series of lists of projects with little description provided of each one.
   

8. For the big construction projects listed in the budget, is more detailed information provided elsewhere?
   
   Not currently, although this would not be hard to implement.
   
   Construction information is provided on the City website for most projects. But there is no obvious link back from the Budget to a project page.
   

9. For the infrastructure investments in the current budget, what will be their lifetime maintenance costs? Or revenue projections? 
   
   Lifecycle costs of new infrastructure projects are not provided in the Budget.
   
   The closest thing we have on an aggregated basis are the City’s comprehensive asset management plans. These plans sum up the state of our infrastructure and how long until it will need to be replaced.
   
   Those plans are useful to see the big picture, but we should see each piece of infrastructure itemized with its maintenance and replacement plan. That information exists; the city just doesn’t share it.
   

10. How much does each of Ottawa’s 24 wards raise in revenue? How much does each spend?
    
    Revenue by ward is available. It’s not part of the Budget, but the information is available on Ottawa’s open data portal, Open Ottawa.

    
    Spending by ward is not reported. It would not be hard for the City to calculate this, with a little modelling. But they choose not to.
    

11. How much is the city spending on climate action?
    
    The staff report accompanying the budget reports on climate action. The City reports a total of $278m in climate contributions, including:
    
    - $5m to implement its Climate Change Master Plan
    - $180m for zero emission buses
    - $48m for infrastructure projects on Bank St and Carling Ave to reduce basement flooding
    - $21m for resiliency to power outages expected with increased extreme weather events
    
    While I don’t think the City is doing enough to support its climate change goals, I do give the City credit for providing a first cut at reporting on climate-related activities.
    

12. Is financial data available to the public in electronic format?
    
    No, unfortunately. There is no reason that budget data, past and present, should not be included as downloadable spreadsheets in Open Ottawa.

Conclusion

Of the 12 questions that I believe every city budget should answer, the Ottawa budget answers two. And we get partial answers on another four.

Transparency in budgets is a bellwether for transparency and good governance at city hall. Cities that have nothing to hide let citizens understand how they are spending their tax dollars.

It’s easy to imagine what a more transparent and engaging budget could look like. Unfortunately, the powers that be in Ottawa are just not there yet.