Fact Check: Will the new Climate Strategy cost Calgary taxpayers $87B?
Recently, Councillor McLean implied on Twitter that the new Climate Strategy would amount to an $87B “climate tax.” This is false. While he didn’t go so far as to say that the entire $87B would be paid for from municipal taxes, the 87B figure has no direct relationship to taxes of any government. Another organization ran with the $87B number and started a petition to oppose the Strategy. What are the facts?
Where did the $87B figure come from?
Administration presented the new Climate Strategy - Pathways to 2050 at City Council on May 31. The “Highlights” document included the statement that
“Reducing Calgary’s city-wide emissions to net zero by 2050 will require a cumulative investment of approximately $87 billion by 2050, or $3.1 billion annually, into mitigation measures such as building retrofits, renewable energy and zero emissions mobility. The investment is calculated as a cost to the economy broadly.” (Emphasis added.)
What does “Costs to the economy broadly” mean? Is that Calgary taxes?
Climate change is a problem that affects every segment of our society, and action from every segment of our society will be required to address it. The City added up the total investment from individuals (e.g., increasing insulation in your house, buying an electric car), private businesses and industry (e.g., putting solar panels on a business, switching to green energy, investing in developing new technologies) as well as investment from all three levels of government: municipal, provincial and federal.
The fact that this figure represents investment and not simply cost is important because these investments will bring in big returns. When you renovate your home, you don’t simply think of it as a cost, you are adding value and equity to the place in which you live. In the same way, when the Calgary economy invests in getting to net-zero, we are adding value and making Calgary a more valuable place to live. This creates jobs, attracts further investment and talent, and makes a more valuable city.
This is also an opportunity for Calgary to get back money from the provincial and federal governments. Calgary sends about 34 cents of every municipal tax dollar to the Province. Provincial investment in things like the Green Line will bring a return on our contribution. Federal money will also come back to Alberta if Calgary has a solid climate plan. The Federal Government has indicated that it will be providing up to $90B in climate-related funding across Canada. Calgary should be prepared to get our fair share. Calgary has a larger challenge to get to net-zero than cities like Montreal or Vancouver, which both have greater access to clean hydro electricity. We also need greater federal investment to transition our economy and create green jobs. We need to maximize our use of federal grants and other funding.
So how much will Calgary taxpayers need to invest?
That depends on how Council carries out the vision of the Strategy. The City is developing its four-year budget for November, when it will decide which priorities will get funding. Right now, Administration is asking for climate change to be included as a priority.
It’s important to recognize that:
- Not all municipal spending on addressing climate change will be new dollars. Some items, such as flood mitigation or completing the Green Line, already have a budget allocated. Others require a shift in thinking to make sure that things we are already spending money on start taking climate into account. For example, instead of buying new diesel buses, the City could start buying electric buses instead. Instead of spending money on new interchanges for cars, it could direct funds to improve transit, pathways or bike lanes.
- Not all City money comes from tax dollars. Some of it comes from land sales, fees for service, lease agreements, and fees paid by developers. The City could also raise money through green bonds.
- There are many areas where The City can take action without spending a lot of money. Municipal governments can set regulations that require businesses to take climate into account. For example, The City could require developers to plant more trees in new neighbourhoods or make them more walkable with wider sidewalks. The City can also provide incentives through fees or rebates, such as charging more for extra household garbage. Finally, The City can play a role as a convener, such as bringing people in a neighborhood together to discuss how their community can better prepare for extreme weather events.
Can we afford to spend money on climate change when people are worried about the economy?
The economy is absolutely a concern for Calgarians, but that’s actually a reason to take action as soon as possible. Globally, investors are looking to do business in areas that have strong climate plans. Already, many of the oil companies downtown have declared net-zero targets. Companies such as Google and Microsoft have commitments to use 100% clean electricity in their facilities, something Calgary can not currently provide. Having a robust Climate Strategy will help attract new investment. Encouraging Calgary’s growing green tech sector will help diversify our economy to get away from the boom/bust cycle. Retrofitting buildings will provide jobs in the construction industry. All told, transitioning to a low-carbon economy could create over 160,000 jobs and generate over $60 billion by 2050.
The Climate Strategy will help save taxpayers money in the long run:
- The City estimates that getting to net-zero energy generation could save Calgarians between $60-80 billion in energy costs by 2050. [p.8]
- Failure to address climate change is expensive. Estimates are that the impact of severe climate events on infrastructure, economy and health care could cost $2.6 billion every year by 2050. Insurable losses have already ballooned from between $250-$450 million per year to an average of $1.91 billion per year.
What can I do to make sure the Climate Strategy is not derailed by misinformation about funding?
You can contact your Councillor to let them know you support the Strategy and want them to vote in favour.
Once Calgary has a Strategy in place, we will have an opportunity to make sure the operational plans make it even stronger by addressing clean, connected, protected communities. Send your letter here.
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