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Understanding your City Budget

Basic Budget Information

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.  

Learn about the budget - video

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.

The budget process explained

The budget process

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.

Describes 5 steps in the budget process
Steps in the Budget Process

Get involved in the budget process - Have your say

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

City budget: how the money is spent

What you get for your property taxes

The City of Ottawa provides many vital services to residents each day, which have a direct impact on the quality of life that residents expect. One quarter of a residential property tax bill is effectively set or mandated by the Province. Education taxes are set by the Province and collected by the City. In addition, there are Provincially mandated programs such as employment and financial assistance (Ontario Works) and affordable housing that the City is required to administer. City Council has a very limited or no control over these items.

Want to know what you get for every 100,000 in property assessment in 2020?

Assessment $100,000

 Services Urban Area Rural with
Reduced Transit Service
Rural with
Para Transpo Service Only
Transit & Para Transpo 158 53 15
Police 137 161 167
Capital Financing 110 130 135
Roads & Traffic 86 101 105
Fire 74 47 49
Parks/Recreation/Culture 66 78 81
Program Support 65 76 79
Social Housing* 43 51 53
Garbage/Recycling ** 31 36 37
Library 20 23 24
Paramedics 17 19 20
Planning/Economic Dev/Environment 11 13 13
Social Services* 12 14 15
Child Care* 7 8 9
Public Health* 5 6 7
Long Term Care* 10 11 12
Municipal Property Assessment Corporation* 4 4 4
Non Municipal Tax Supported Services      
Provincial Education* 138 162 168
Conservation Authorities 6 7 7
  $1,000 $1,000 $1,000

*Provincial Mandated Programs
**Includes special charge for Solid Waste

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

How the City budget affects your property taxes

The City budget helps to determine the amount of property taxes you pay to the City each year. If you are a home, business or property owner, you will pay your property taxes in two annual instalments. Even if you are a tenant, a portion of your rent will go toward paying the property taxes on the building in which you reside.

Components of property taxes

There are three components used to calculate the amount of property taxes you pay, only one of which the City has some control over:

  • Assessed value of property - determined by the Municipal Property Assessment Corporation.
  • Municipal tax rate - set by City Council annually through the budget and property tax policy.
  • Education tax rate - set by Province.

Three factors determine the Municipal property tax rate:

  • Annual budgetary increase,
  • Tax policy
  • Changes in assessment.

Check out this short video about how your property taxes are calculated.

Your residential property taxes are calculated using this formula:

  • Assessed value x municipal property tax rate = amount of municipal property tax
  • Assessed value x education tax rate = amount of education property tax
  • Municipal property tax + education property tax = your property taxes *

*Please note that, if applicable, other charges such as local improvements, municipal drains or business area improvement charges might be added to the tax bill.

How does the City compare with other municipalities

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

Table of City Services and Standing Committee reporting structure

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

 

Video transcript (Accessible)- How your City Budget Works

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.