Chart of the Day (CotD) City of Edmonton Financial Crisis, by Eldric Vero

This CotD was inspired by two recent articles:

1) CityNews “Mayor refutes speculations of provincial audit on City of Edmonton” (see link: https://edmonton.citynews.ca/2024/03/27/mayor-refutes-speculations-of-provincial-audit-on-city-of-edmonton/ ). From the article: Is there trouble brewing at Edmonton City Hall? Premier Danielle Smith — while not confirming or denying the allegations Wednesday — does acknowledge Edmonton is facing financial challenges and the province is willing and ready. Smith added that while “It’s Edmonton’s story to tell about where they find themselves, we have had a number of reports that do have us concerned.” She said there are reported money problems on top of a raft of senior city executives — including the city manager — leaving. That is a sign that has us concerned about stability,” said Smith. Alberta municipalities are not allowed by provincial law to run deficits.

2) Bradsalzberg.substack.com “Is There A Liberal-NDP Plot To Destroy Conservatism in Alberta?” (see link: https://bradsalzberg.substack.com/p/is-there-a-liberal-ndp-plot-to-destroy ). From the article: Meanwhile, on a municipal level, candidates for mayoral positions have gained office in surprising fashion. The election of current Edmonton Mayor Amarjeet Sohi in late 2021 stands as one of the most peculiar achievements in the history of Alberta politics. “Amarjeet Sohi, mayor of Edmonton 2021–present was born 8 March 1964 in Banbhaura, Punjab, India. After being accused of terrorism and imprisoned in India for 21 months, Amarjeet Sohi became involved in municipal politics in Edmonton.” He won anyway, thus establishing a former federal Liberal politician as a mayor in Canada’s most conservative province. In turn, Sohi has done such a great job that Premier Danielle Smith’s government is now considering a move to “stabilize and audit” the City of Edmonton.

The author of the CotD has reviewed the City of Edmonton Financial Annual Reports since 2008 (see link : https://www.edmonton.ca/city_government/budget_finances/financial-reports)

Panel 1   The first graph is a construct by the author presenting the Annual Operating Costs.  Annual Operating Costs have increased from $1.82 Billion to $3.45 Billion ($1.63 Billion) since 2008.  This is an increase of 89 percent over 14 years (an average rise of 4.7% per year).  For comparison, the average consumer price index (CPI) has been under 2 percent per year over the same time period.

Panel 2   This is a presentation of Annual Deficits (the author’s definition) based on the change in Total Liabilities.  Except for year 2017 where there was a Liability payment, the City of Edmonton Liability Deficit has averaged in the order of $310 Million per year.  Based on the City of Edmonton’s own debt forecast, the CotD Model predicts Annual Liabilities in the order of $400 Million per year through to 2026.

Panel 3   This table and graph present the Cumulative Long-Term Debt and Total Liabilities as per the Financial Annual Reports.  The question: “Is the current and projected debt levels sustainable?” It appears to be a concern of certain municipal executives (which have recently quit) and the Government of Alberta.

“Modern slaves are not in chains….they are in debt”  Unknown author