1 of 5 February 18, 2021 The Honourable Chrystia Freeland Deputy Prime Minister Minister of Finance Government of Canada House of Commons Ottawa, Ontario K1A 0A6 Dear Deputy Prime Minister Freeland, On behalf of The City of Calgary (The City), I am pleased to present you with our submission to the Government of Canada’s 2021 pre-budget consultation. First, I must acknowledge and thank you and your government for the leadership shown over the last year of this pandemic. In particular, we have seen real action on critical policy files for The City including backstopping municipal operating losses, the successful roll out of the Rapid Housing Initiative, and the thoughtful approach taken to getting Calgary’s Green Line LRT project rolling. Significant problems lie ahead however, and this budget represents a once-in-a-lifetime crisis for this city, but also a once-in-a-lifetime opportunity for you and your government. Unlike other cities and regions in Canada, Calgary’s economy will not easily bounce back as the pandemic subsides. As the waves of necessary public health measures recede, much devastation will remain. Calgary has a total GDP larger than six provinces. When the City is not running on all cylinders, neither is the region, nor the country. Calgary is the economic capital of a vast region, with major spillover effects for the rest of Alberta, for Saskatchewan, and for large portions of northern BC and the interior. However, we continue to have the highest unemployment rate of any large city in Canada, nearly one third of our downtown is vacant, and we are operating far below our economic potential. As one example, Calgary has nearly as much empty downtown office space as there is office space in all of Winnipeg, or the equivalent of half of downtown Vancouver. With the Government of Canada’s help, Calgary can transition from our current economy to one better positioned to withstand all kinds of shocks and stressors. It is now time for the Government of Canada to prioritize Calgary’s recovery through a whole-of-government approach. This means an asymmetric approach to Calgary, rather than expecting Calgary to benefit solely from national programs. The benefits to Canada from Calgary have always been asymmetric, and it is now time to think about specific investments in Calgary to the problems we must face collectively in order to enable Calgary’s long-term economic and social resilience. 2 of 5 These measures include meeting the immense challenge of Calgary’s economic woes and downtown vacancy crisis with the fiscal firepower of the federal government and through rescoping the mandate of Western Economic Diversification Canada (WD) to meet this crisis. We also need short- and medium￾term stimulus through several specific infrastructure investments and your help in keeping the Green Line LRT project on track by emphasizing it in your government’s discussions with the Government of Alberta. Ensuring that Downtown Calgary Recovers Calgarians need a specific plan to address our city’s unique economic position. As the energy sector has experienced significant declines and volatility, our downtown office towers have emptied out. The human cost of this has been immense, but the decreased valuation of these office towers have also created a multi-billion-dollar impact on our municipal tax base through a “tax shift” that has really hurt retail and other small businesses. All municipalities, including The City, lack the policy tools and fiscal firepower to address a challenge of this scope. Calgary has spent nearly $500 million to help businesses through this, but we are running out of funds. The Government of Canada is uniquely positioned to address this challenge and make meaningful progress on other important policy objectives. The most important thing is to create jobs though attracting domestic and foreign investment and helping Calgary businesses grow across all sectors: energy in all its forms, but also the other six industries identified in our economic development strategy, Calgary in the New Economy: financial services, creative industries, agrifood and agribusiness, transportation and logistics, travel and tourism, and life sciences, along with enabling technology. This means significant further investments in WD and a rescoped mandate to transition the agency from its historical focus on rural economic development to an explicitly urban agenda to help generate wealth and prosperity for all Canadians. We also need specific investments in our downtown, including assistance in conversion of office buildings to new uses. The City is urging the Government of Canada to create a simple, rapid funding mechanism to spur the adaptive re-use of vacant office towers. This could include: 1. Accessing a Green retrofit program that can make these offices more amenable to current non￾residential uses, or converted to residential buildings, including rental and affordable housing, and; 2. Regulatory and financial investment incentives for the development of new high-density residential complexes and the conversion of office buildings to various forms of residential occupancy. The ability to stack grants and work with private industry to help address market failures in this space would help make significant strides to addressing the vacancy crisis and spur the post-pandemic Calgary Comeback. Calgary’s unique crisis requires an equitable approach to federal investment that prioritizes speed and accessibility over perfection. Any region facing concurrent crises like ours would rightly expect differential treatment by the Government of Canada, and historically they have often received it. Demonstrating a greater level of federal investment in our time of need will show Calgarians living through these economic crises that we are all Canadian and that Canadians are there for our neighbours who fall on harder times than the rest of us. 3 of 5 Stimulative Infrastructure Investments in Culture and Sport In addition to your government’s recent historic investments in climate-related infrastructure and a permanent transit fund, we are calling on the Government of Canada to use Budget 2021 to deliver immediate additional stimulus funding directly to cities. The City has a prioritized list of unfunded projects including many that can be ready to go for the 2021 construction season. Delivering on the Commitment to Arts Commons Phase 1 The Arts Commons Transformation project is Calgary’s top unfunded infrastructure priority and an unfulfilled promise from your 2019 campaign. The project is being planned in two phases. Valued at $240 million, Phase 1 of this transformation of our downtown is the development of Arts Commons North, which will include three versatile, purpose-built venues, a connection to the existing building and supporting amenities. The City is calling on the Government of Canada to use Budget 2021 as an opportunity to signal a firm $80M commitment to fund Phase 1. Arts Commons will be a key contributor to the social, economic, cultural, and intellectual life and well-being of Calgarians and visitors alike, and an important building￾block for the revitalization of the downtown core suffering from the cumulative impacts of the sustained economic downturn and COVID-19. The City and Calgarians continue to look to the federal government to deliver on the commitment made during the last election to support the renovation and expansion of the Arts Commons. Both the province and the City of Calgary have fully invested their respective shares of $80M in Phase 1. Promoting winter sport excellence and amateur participation While this is an investment that is in Calgary, it is actually a national investment. 22 of 28 medals won by Canadians in Pyeongchang were from athletes who trained or competed in Calgary and region. However, these facilities are aging and the endowment that supported their operation is nearly depleted. There is a clear and urgent opportunity to address this now before many of these aging assets reach the end of their useful life. There are also clear economic benefits: a 2018 study conducted by Sport Calgary determined that amateur sport in Calgary added $1.1B in GDP and supported 15,976 full-time jobs. The City supports a multifaceted community-led proposal to create the Canadian Winter Sport Centre of Excellence. Collectively our community is seeking $554M. This is a unique package that seeks to renew the Calgary region’s legacy as a winter sport training centre, replenish the endowment that sustains these community assets, build Calgary’s first multisport fieldhouse, and host a premier international sporting event for which the hosting rights have been secured. A transformative investment in housing to end homelessness in Calgary The City applauds your investments aimed at ending chronic homelessness in Canada. With our significantly depressed economy and lower resulting prices for assets that could meet the gap, we have a unique opportunity to massively increase the amount of affordable housing and end chronic homelessness in Calgary in a very short period of time. The City’s ask of $314.6M to Minister Hussen last August in our COVID-19 Community Affordable Housing Advocacy Plan will get us there. 4 of 5 We strongly support the Rapid Housing Initiative (RHI) as a unique bilateral approach to ensure investments into Canada’s 15 largest municipalities to meet local needs. I am proud that the $24.6M identified for direct investment in Calgary through RHI will enable the delivery of three projects comprising 176 new affordable homes to bring more than 216 people home (far exceeding the minimum requirements of 116 units). Further, Calgary’s RHI investment plan includes all preferred housing product types identified in the initial RHI program criteria: a hotel conversion; a modular build and the reclamation of a derelict building. We have the ability and capacity to do much more with our partners in the nonprofit sector. Calgary’s economic conditions and our acute need for affordable housing, combined with the readiness of the non-profit community to deliver new homes quickly, makes us uniquely poised and ready for more federal investment. Based on information collected during the development of Calgary’s COVID￾19 Community Affordable Housing Advocacy Plan, and The City’s recent call for projects under RHI, the capacity in the sector to create more non-market housing is more than ten times higher than the initial funding Calgary received through RHI. Let’s do this. Fully funding this ask will allow Canada to say we were able to end chronic homelessness in one of our largest cities. The impact on citizens in difficult times is almost incalculable. Getting the Greenline LRT Built The City is seeking the Government of Canada’s continued assistance in addressing the Government of Alberta’s delays which have put this project in jeopardy of losing another year. It is a continuing unresolved challenge to fully understand the reasons for this latest delay. Federal support to help collectively push the provincial government to move forward will be critical over the coming weeks. The City strongly encourages the Government of Canada to quickly address the issue of the front-loading of funding for the Green Line project. With the province’s decision to delay its own funding, front￾loading the federal contribution is a necessary step in our efforts to create more than 20,000 jobs in our local economy and contribute to Canada’s ambitious climate agenda. It will also send an important signal to a provincial government that continues to drag out the approval of even its meager front-end contribution to this important project, despite The City’s due diligence and the federal commitment. As a result of this provincial delay, we are also asking the Government to consider an amendment to the “long-stop” date of the project. The confirmation of your government’s ability to front load the federal contribution to this project would have a significant impact in advancing the work. * * * The City thanks the Government of Canada for this opportunity to share our input into the 2021 Federal Budget and we look forward to continuing and deepening our partnership with the Government of Canada over the coming year in pursuit of our shared priorities. The City also applauds the Government of Canada’s renewed commitment in your Fall Economic Statement to addressing the complex intersecting issues of public safety, mental health, addiction, gang violence and anti-racism. The City has several streams of work underway to address these challenges which are producing concrete recommendations to bolster specific interventions and prevention initiatives. We look forward to working even more closely together to tackle these challenges. 5 of 5 Rebuilding a strong and resilient economy in Calgary is critical to rebuilding a stronger, more resilient Canada. Thank you for considering this submission. If you have questions or require further information, please contact me at your convenience. Sincerely, Naheed K. Nenshi MAYOR cc: Calgary City Council David Duckworth, City Manager, City of Calgary