'This is a spending problem': Saskatoon business leader calls for 'mid-management' job cuts at city hall

'This is a spending problem', Reaction to Saskatoon city fiscal crunch Chamber of Commerce CEO says the unprecedented fiscal crunch facing the City of Saskatoon is not a revenue problem, but a spending problem

The head of Saskatoon’s chamber of commerce responding with frustration to the city’s announcement of a $75 million deficit over the next two years — and the tax hikes that will likely be needed to help makeup some of the the shortfall.

“I think we had all started to prepare for the idea that the city was facing some sort of deficit, some sort of fiscal gap heading into this next two-year cycle and by most accounts that was going to be in the 10 to $15 million range,” CEO of the Greater Saskatoon Chamber of Commerce, Jason Aebig told CTV News.

“I think the numbers released [Wednesday], were characterized by the CFO of the city himself as 'unprecedented' is a massive number.”

On Wednesday, the city's Chief Financial Officer Clae Hack warned that without spending cuts, a nearly 19 per cent tax increase would be needed to foot the bill. In a presentation to news media, Hack floated potential property tax increases between six and 13 per cent, with each level still requiring the city to find millions in savings.

Mayor Charlie Clark said the funding gap was a combination of inflation and less revenue.

“We're seeing a 30 per cent on average increase in the contracts,” Clark told CTV Morning Live on Thursday. “Thirty million of that funding gap is just [because] our buying power is reduced.”

He also said revenue has not bounced back from the pandemic, which means the city has less money to work with.

“We either have to do less of that construction work or we have to we have to try and raise more money in order to keep up with that pace,” Clark said.

However, Saskatoon’s business community disagrees, Aebig said.

“This is a spending problem. This isn't a revenue problem,” he said.

“This is a constellation of decisions and actions that we've taken over the last several years that have put us here, and there's no one else to blame for that. We are here because of the choices we've made.”

Aebig said the city needs to get serious about narrowing the funding gap without raising property taxes.

“I think it's fair to say I can say this pretty unequivocally 18 per cent is not on, 13 per cent is not on, I would say six or seven per cent is not on. We have got to find a way to close this gap, while at the same time keep growing.”

REDUCING SPENDING

Aebig advised the city to focus on funding important services like policing, fire, snow removal and waste.

“Start there and then work your way out to decide whether or not something is, in fact, worthy of more investment or a potential cut.”

He also recommended the city prioritize investments that will expand the tax base.

Further changes, according to Aebig, could include increasing user fees for facilities and programs.

“We have to increase them so that at least it's a voluntary choice at the end of the day for someone to use those services or programs and it's not being paid on the property tax.”

The city will also whittle down its payroll, Aebig said.

“We're going to have to eliminate mid-management positions,” he said.

“Everything I have just outlined for you is exactly the set of decisions and hard choices that businesses and households have had to make over the last several years where you have to make trade-offs. You have to make sacrifices, not everything can happen all at once, and we can't have everything we want.”

Clark said the city has been trying to cut as much spending as possible.

“We've already been trying to lean down the city and we are already the most competitive city when it comes to commercial taxes in the country,” he said.

“We don't want to kick the can down the road and fall back on terms of the maintenance of our city and our services.”

Special budget meetings have been planned over the summer, which will be open to the public, Clark said.

“We will be engaging with the community on that and people will have a chance to come and speak,” Clark said. “There will be opportunities for citizens if they would like to speak to different aspects of the budget to come forward and do that.”