Understanding your City Budget

Budget basics

Every year, the City of Ottawa produces a municipal budget. One of the City’s most important documents, the budget is the blueprint that defines how resources are collected and allocated. The overall budget comprises two main components – the Operating Budget and the Capital Budget.

Operating Budget

Every City program and service is funded through the City’s operating budget, which is designed to ensure the dependable delivery of a broad array of programs and services that residents rely on every day. Your municipal government is responsible for emergency services (fire, police and paramedics), roads, clean water, parks and recreation, public health programs, garbage and recycling programs, libraries and the buses that take residents to work and home. The Operating Budget funds all this and much more.

To keep Ottawa both affordable and prosperous, City staff needs to determine how best to deliver all these services while balancing revenues and expenditures. Given Ottawa’s size, that’s not as simple as it might sound.

Ottawa is one of the largest cities in Canada – larger than the areas of Toronto, Montreal, Vancouver, Calgary and Edmonton combined. Ottawa covers an area of 2,760 square kilometres. Only 10 per cent of that is urban while the remaining 90 per cent is agricultural land, villages, marginal and forested lands, and wetlands. Given the sheer scale of the city, it’s no wonder that a majority of City funds are spent on delivering existing services, many of which are available 24 hours a day, 7 days a week.

Capital Budget

In order to progress and grow, Ottawa must also look beyond simply providing existing services. A City needs to be guided by a clear and overarching vision of what it is to become.

City infrastructure is funded through the Capital Budget. The bulk of that funding goes to maintaining and rehabilitating existing infrastructure as identified in the Comprehensive Asset Management analysis. As funding allows, the City continues to fund growth, building new infrastructure and investing in the future. The City adds between $600 million and $800 million worth of new capital to Ottawa’s existing asset base every year – from buses and vehicles to water pipes, , roads to trunk sewers, from street lighting to libraries. These are investments that residents and businesses will benefit from for years to come and which contribute to the growth of Ottawa’s economy and quality of life.

The Capital budget also funds Council’s Strategic Initiatives, which support the Term of Council Priorities.

Developing the budget

With direction from Council, the City’s Finance Services Department is responsible for assisting departments in developing their detailed draft budgets every year. A series of budgets are tabled, broken down by category so that the various City Committees responsible can review and discuss what is proposed and ensure everything included complies with existing City plans.

The City must maintain a balanced operating budget. The Municipal Act prohibits the City from running a deficit on operating expenditures. The city can only borrow funds and incur debt for the Capital Budget.

During development of the operating and capital budgets, Council has some flexibility for reallocating or reprioritizing funds between programs and services to address emerging issues. Given these limits on discretion and the financial realities of limiting tax increases to residents, it is difficult to address all these issues or to implement significant changes from year to year.  

How the City Budget Works - Video

Get informed about how the City budget works and how you can get involved.

Watch a short video and learn the basics of how the City budget works.

Get involved in the budget process-  key steps

A key component to developing the budget is hearing from you! To help you better understand how Ottawa plans its spending every year – and how you can get involved – we have broken down some of the  key steps that go into developing the City’s budget.

Develop budget guidelines and priorities

This occurs at the start of a 4 year Council term. Guidelines and priorities are derived from several key documents including the Long Range Financial Plan, the Fiscal Framework and the Strategic Plan.

Set budget timetable

This occurs in the summer or early fall. It involves the Council approval of the Budget Directions report which provides the direction for annual City budgets. It outlines dates for the tabling of the draft budget and approval of the budget.  Questions can be directed to your member of Council.

Draft budget preparation

In the summer and fall, the draft budget is created. During this period, members of the community can provide input in a variety of ways including online tools and surveys, Councillor led public consultation sessions and communication with the Mayor and Council. 

Draft budget presented to City Council 

In November, the draft budget is presented to Council, and the public.  In the weeks following, the budget is reviewed by the Standing Committees.  Each Standing Committee reviews part of the City budget.  Citizens have the opportunity to register and make a presentation at any of the Standing Committee meetings.

 The draft budget, and the schedule for the standing committee meetings are published on Ottawa.ca.

Approve the final budget

Council approves the entire budget in early December. The approved budget details ares published on Ottawa.ca in the new year.

Note:  In an election year, this is delayed until the new year.

There are many ways to stay informed and participate in the budget process

1. Contact your Councillor at any time during the year
2. Participate in on line surveys and tools on Ottawa.ca during the budget process
3. Attend Councillor led consultation sessions during the budget process
4. Attend or register to present at a Standing Committee budget meetings
5. Watch the Council meetings
6. Follow Social media updates

Find out how the City budget affects your property taxes, and what your taxes pay for.

How the City of Ottawa compares

Taxation increases for major Canadian cities 2011 to 2020

City	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	Cumulative Total	Compounded Total
Ottawa	2.45%	2.39%	2.09%	1.91%	2.00%	2.00%	2.00%	2.00%	3.00%	3.00%	20.39%	22.33%
Toronto	0.00%	2.50%	2.00%	2.23%	2.75%	1.30%	3.29%	2.91%	3.58%	2.00%	22.56%	24.94%
Edmonton	3.85%	5.39%	3.30%	4.92%	5.70%	4.10%	3.10%	3.20%	2.60%	2.08%	32.79%	37.91%
Calgary	4.60%	6.00%	5.50%	5.00%*	4.20%	6.10%	0.00%	3.80%	3.45%	1.50%	30.55%	41.49%
Vancouver	2.00%	2.84%	2.00%	1.90%	2.40%	2.30%	3.90%	4.24%	4.50%	8.20%	32.28%	37.12%

*City of Calgary: tax increase mitigated by 1-time rebate of $52 million

City Services and Standing Committee Reporting Structure

Each City service reports to a Standing Committee.  Below is a list of City services, department names and the name of the Standing Committee that each service reports to.  

City Services and Standing Committee Reporting Structure

City Service	Department Name	Standing Committee Name
Affordable Housing	Community and Social Services Department	Planning Committee
Office of the Auditor General	Office of the Auditor General	Audit Committee
Building Code Services	Planning, Infrastructure and Economic Development Department	Planning Committee
By-Law & Regulatory Services	Emergency and Protective Services Department	Community & Protective Services Committee
CFO & Treasurer and Business Support Services	Finance Services Department	Finance & Economic Development Committee
Children's Services	Community and Social Services Department	Community & Protective Services Committee
Chief Financial Officer & Treasurer, and Business Support Services - Finance Services Department	Finance Services	Finance & Economic Development Committee
City Clerk	City Clerk	Finance & Economic Development Committee
City Manager's Office	City Manager's Office	Finance & Economic Development Committee
City Solicitor Office	Innovative Client Services Department	Finance & Economic Development Committee
Committee of Adjustment	External Boards and Agencies	Specific Board/Agency meeting
Community Recreation & Cultural Programs	Recreation, Culture and Facility Services Department	Community & Protective Services Committee
Corporate Finance	Finance Services Department	Finance & Economic Development Committee
Corporate Real Estate Office	Planning, Infrastructure and Economic Development Department	Finance & Economic Development Committee
Crime Prevention	External Boards and Agencies	Specific Board/Agency meeting
City Wide Programs, Aquatics, & Specialized Services	Recreation, Cultural and Facility Services Department	Community and Protective Services Committee
Development Review Process (Rural)	Planning, Infrastructure and Economic Development Department	Agriculture & Rural Affairs Committee
Economic Development and Long Range Planning	Planning, Infrastructure and Economic Development Department	Finance & Economic Development Committee
Elected Officials	Elected Officials	Finance & Economic Development Committee
Facility Operations Service	Recreation, Culture and Facility Services Department	Community & Protective Services Committee
Fire Services	Emergency and Protective Services Department	Community & Protective Services Committee
Fleet Services	Innovative Client Services Department	Transportation Committee
Forestry	Public Works and Environmental Services Department	Environmental Protection, Water and Waste Management- Tax Supported
General Manager & Business Support Services- Emergency & Protective Services	Emergency and Protective Services Department	Community & Protective Services Committee
General Manager & Business Support Services- Planning, Infrastructure and Economic Development	Planning, Infrastructure and Economic Development Department	Finance & Economic Development Committee
General Manager & Business Support Services- Recreation Culture and Facility Services	Recreation Culture and Facility Services Department	Community & Protective Services Committee
General Manager & Business Support- Services Social Services	Community and Social Services Department	Community & Protective Services Committee
Housing	Community and Social Services Department	Community & Protective Services Committee
Human Resources	Innovative Client Services Department	Finance & Economic Development Committee
Information Technology Services	Innovative Client Services Department	IT Sub Committee
Infrastructure Services	Planning, Infrastructure and Economic Development Department	Environmental Protection, Water and Waste Management-Tax Supported
Light Rail Planning and Implementation Program	Transportation Services Department	Finance & Economic Development Committee
Long Range Planning	Planning, Infrastructure and Economic Development Department	Planning Committee
Long Term Care	Community and Social Services Department	Community & Protective Services Committee
Non Departmental	Finance Services Department	Finance & Economic Development Committee
Office of the Auditor General	Office of the Auditor General	Audit Committee
Ottawa Police Service	External Boards & Agencies	Specific Board/Agency meeting
Ottawa Public Health	External Boards & Agencies	Specific Board/Agency meeting
Ottawa Public Library	External Boards & Agencies	Specific Board/Agency meeting
Paramedic Service	Emergency and Protective Services Department	Community & Protective Services Committee
Parking Services	Transportation Services Department	Transportation Committee
Parks	Public Works and Environmental Services Department	Community & Protective Services Committee
Parks & Facilities Planning	Recreation Culture and Facility Services Department	Community & Protective Services Committee
Partner and Stakeholder Initiatives	Community and Social Services Department	Community & Protective Services Committee
Payroll	Finance Services Department	Finance and Economic Development Committee
Planning Services	Planning, Infrastructure and Economic Development Department	Planning Committee
Public Information and Media Relations	Innovative Client Services Department	Finance & Economic Development Committee
Public Policy Development - Emergency and Protective Services	Emergency and Protective Services Department	Community & Protective Services Committee
Revenue  Services	Finance Services Department	Finance & Economic Development Committee
Resiliency and Natural Systems Policy	Planning, Infrastructure and Economic Development Department	Environmental Protection, Water and Waste Management-Tax Supported
Right of Way, Heritage and Urban Design	Planning, Infrastructure and Economic Development Department	Planning Committee
Roads Services	Transportation Services Department	Transportation Committee
Rural Affairs	Planning, Infrastructure and Economic Development Department	Agriculture and Rural Affairs Committee
Security & Emergency Management	Emergency and Protective Services Department	Community & Protective Services Committee
Service Ottawa	Innovative Client Services Department	Finance & Economic Development Committee
Service Transformation	Innovative Client Services Department	Finance & Economic Development Committee
Social Services	Community and Social Services Department	Community & Protective Services
Solid Waste Services	Public Works & Environmental Services Department	Environmental Protection, Water and Waste Management-Tax Supported
Stormwater Services	Public Works & Environmental Services Department	Environmental Protection, Water and Waste Management-Rate Supported
Supply Services	Innovative Client Services Department	Finance & Economic Development Committee
Traffic Services	Transportation Services Department	Transportation Committee
Transit	Transportation Services Department	External Boards & Agencies
Transportation Planning	Transportation Services Department	Transportation Committee
Water Services	Public Works and Environmental Services Department	Environmental Protection, Water and Waste Management-Rate Supported
Wastewater Services	Public Works & Environmental Services Department	Environmental Protection, Water and Waste Management-Rate Supported

 

Okay. I would like to help you understand how your City develops its budget.
We always hear about them, and often this can feel like another language all together.

Before we get started, there is important information you should know. Ontario cities like Ottawa receive only 9% of all taxes collected, but are responsible for over 50% of the infrastructure.

Let’s start by looking at what the word budget means…Simply put, it is a planned itemized summary of money that is coming into to the City and how that money is spent for a specific period of time.

It is very important to note that provincial government legislation in Ontario states money coming in equals money going out also known as Revenue equals Expenditures...or a balanced budget.

The City of Ottawa provides more than 100 services to the citizens of Ottawa, so City Council and Administration always have to make difficult decisions to ensure this balancing takes place.

There are two main components of the budget when looking at the “money going out” side of
the scale. Operating pays for all the day-to-day activities of the Corporation: this includes items such as: salaries and wages, utilities, supplies, fuel, and insurance - just to name a few.

The Capital budget pays for all the new big investments or the rehabilitation of current assets under the City’s control.

So let’s focus on how the city collects to pay for all these services.

For every dollar that comes into the city... 53 cents comes from property taxes, 18 cents from provincial grants, and 29 cents from user fees and other sources.

So, now we have learned what a budget is, how cities collect money and how they spend it.

Now let’s take a look at how these pieces work together: Money comes in through property taxes, grants & subsidies, and user fees. The money collected is required for both the operating and capital budget.

We've already talked about the operating budget, including day to day expenses, but it also includes money for funding capital budgets.

The Capital budget pays for all the new big investments or the renewal or rehabilitation of city assets and infrastructure.

This connection is made through 2 methods:  the Reserve Fund method which sets aside funds to pay for capital projects on a cash basis.  These are usually projects that are paid for in the short term such as a road widening or replacement of a sewer line.  Or the debt payment

Ok. So let’s recap.

One - A budget is a plan for money coming in and money going out. There are two building blocks
to the City Budget: Operating and Capital.

Two - The operating budget is like your paying your house bills to keep the lights on. Just like
in a normal household, our bills go up with inflation.

Three - The capital budget is like your major outlays: vehicles, house, renovations etc.

Four - Money comes in from three sources: Property Tax Levy, User Fees, and Grants and Subsidies.

Five - Money coming in is used to deliver over 100 services to City residents.

Six - City Council and Administration, with the input of the public, decide how best to balance the City budget guided by Provincial legislation.

And that, is how your City develops its budget.