COVID-19 could cost city $200M to $360M over next 2 years
EDMONTON -- The City of Edmonton now estimates that the COVID-19 pandemic could cost the city between $200 and $360 million over the next two years.
The city expected to see a $164-million shortfall in 2020, but that number is now predicted to be as high as $172 million.
“Thankfully it's not that significant from what they were originally projecting. It's still, of course, very concerning,” said Ward 1 Coun. Andrew Knack.
Revenue is down because the city waived transit fees for several months during the pandemic, fewer people are now using rec centres, and lower investment income.
The city has already made cuts to transit and weed and park maintenance in an effort to make up the losses. As the projected debt grows, the city will either have raise taxes, or cut more services.
“There's no desire to see a tax increase,” Knack said.
“We are acutely aware that this requires significant expenditure management and will affect services,” said Mary Persson, chief financial officer for the City of Edmonton.
And the city projects the financial crunch won’t ease up in 2021, with a budget shortfall of $114 million being predicted.
“There will be services that will be cut, again, whether it will be to the same extent as we did this year, that's still too early to say,” said Knack.
“Ridership may or may not return, the markets may or may not rebound and we may or may not get a second wave of COVID in Edmonton,” said Persson.
The city will likely have to press pause on some construction projects, but Knack is confident the west LRT expansion won’t be one of them.
“I don't expect that one to be changed, but I do expect we'll have to make changes in our capital budget,” he said.
The projects that could be at risk will be debated in the fall when council takes a more detailed look at city finances.