The mayor's many calculations for this 2025 budget

Budget day at city hall on Wednesday broke from tradition.

Councillors and staff did gather around the horseshoe-shaped table at 10 a.m. to hear the mayor's speech and to absorb a presentation from the city's chief financial officer, who wore a striking new pair of budget shoes.

But by thenthe big details of the budget had, unusually, already been revealed.

Mayor Mark Sutcliffe had given a similar speech to reporters an hour earlier outside his office, where he laid out the details of how the city planned to deal with a $120 million deficit for transit costs in 2025. A half dozen council members came by to hear the highlights there, instead of from their usual council seats.

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The morning news conference held while the police were still down the hall presenting their own finances was to help journalists meet their deadlines, explained the mayor. Sutcliffe is, after all, a former longtime journalist and knows the business.

But this announcement was the latest in a number of unexpectedsteps the mayor has taken over the past 12 months to pave the way for what he's long warned would be adifficult budget.

Sutcliffehas approached the challenging task in his own way, and had to make calculations of many kinds.

A different kind of campaign

Last December, when council voted on its 2024 budget, Sutcliffe was already messaging to the public and council colleagues toexpect tough choices for the next one.

That's because Ottawa faces a $120 million problem. The imminent opening of the north-south Trillium Line, to befollowed by LRT extensions east and west, will lead to extra operating costsand debt financingthat will continue year after year. Ridership revenues aren't what they used to be.

After many years of budgets that kept tax increases low and allowed Sutcliffe, and Mayor Jim Watson before him, to keep election promises this budget needed to somehow tackle that growing cost.

The mayor often mentionshe has regular talks with Ontario and federal cabinet ministers about Ottawa's financial picture, which one would expect. Such conversations led to the $543 million deal signed with the Ford government in April. (That deal didn't involve transit money).

But in August, Sutcliffe took the unusual step of launching a formal campaign for extra money, dubbed "Fairness for Ottawa".

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HearguedOttawa was being shortchanged by both the federal and provincial governments, and sought to educate the public about it. Heeven launched an online petition.

Sutcliffe had his council colleagues sign on, too, by tablinga motion in Septemberthat all 24 councillors supported.

Nowhere near worst case

The routine-sounding budget directions report in September was also given a new spin. It didn't set out specific targets to close this transit deficit, as it normally would.

Instead, that report laid out wide-rangingways the city could deal with its $120 million shortfall: a transit fare hike of up to 75 per cent, a transit levy increase of up to 37 per cent that led to a 9.9 per cent overall tax bill increase, $120 million from upper levels of government, or deep transitcuts.

The worst scenarios also detailed in a news conference would be too devastating to OC Transpo to be seen as realistic. The city said they didn't intend to pursue any option to the full extent, anyway.

Now that the draft budget has arrived, transit riders face a five per cent fare hikeand the transit levy could go up eight per cent, for a total tax bill increase of 3.9 per cent.

Those increases are not nearly as dramatic as they might have been, but they are higher than the2.5 per cent increases of the last budget.

Asked Wednesday if the badscenarios were presented ahead of the budget to prepare the public for higher-than-usual taxes and fares, Sutcliffe reiterated what he had said in September.

Those scenarios were meant to help the public understand the scope of the city's problem, he said.City staff alsodescribed spendinghundreds of hours analyzing where the figures should land.

Council calculations

Even the choice to split rising OC Transpo costs between riders and property taxpayers involved careful calculation.

The mayor was electedon a promise to build a more collegial council. Suburban and rural councillors typically say their residents don't want to see property taxes rise, while many urban councillors say fare hikes will deter riders and hurt those onlow incomes.

Sharing the pain between both groups will make everyone somewhat unhappy.

Meanwhile, the strong mayors' legislation of 2022 allowsSutcliffe to craft his own budget. Instead, he formed a couple of working groups to tackle financial issues.

A handful of councillors help him and city staff look for "efficiencies", while a group that includes transportation committee chair Tim Tierney, transit commission chair Glen Gower, and planning committee chair Jeff Leiper, have been working through the transit dilemma.

Despite those months of collaboration, there will still be debate in the many meetings before afinal vote on Dec. 11.

Some councillorsare uneasy about yet another calculation made forWednesday's draft budget: there's a $36 million hole left for upper levels of government to fill.

The $36 million hole not plugged

The mayor and city staff are calling thata "placeholder" amount.

Municipalities are not allowed to run deficits, and this draft budget counts on $36 million materializing from Queen's Park or the federal government at some point in 2025.

To be sure, $36 million is asmaller requestthan$120 million.

And Sutcliffe told reporters Wednesday that, based on his conversations, getting $36 million from the other levels of government is an achievable target.

The thing is, he needs to secure that moneyfor 2025 at the same time as he embarks on this process all over again to balance the books in 2026, which is projected to be worse.

Could this year of advocacy, tight budgeting, and political calculations be thenew normal for Sutcliffe?

He says he hopes not. Municipalities across the country are calling for a new fiscalarrangement that lets themtap into revenuesother than property taxes. Running a modern city requires it, the mayorsays.

But for now, Sutcliffeappears to have tostay in "Fairness for Ottawa" campaign mode.