Inflation and budget deliberations

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Inflation seems to be slightly letting up in a few areas, but is still massively impacting operations across the country. 

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According to Statistics Canada, the consumer price index (CPI) rose 6.8 per cent in Nov. Prices across Canada rose 5.4 per cent on a yearly basis in Nov., excluding energy and food prices. 

Director of Corporate Services Sam Mugford says we are in unprecedented times from inflation rates. This isn’t equally distributed across all services in the town, but they are aware of its impact. 

Some areas experiencing this pressure include salary pressures, fuel, chemicals, contracted supplies, projects, and pricing on materials such as concrete and asphalt. 

The towns unionised staff collective agreement ended in Dec. of 2022 and negotiations will begin in 2023. “We don’t know what the union’s ask is going to be, but we expect that there’s going to be an ask, given where inflation has been.” 

Administration recommended passing the interim budget based on half of the 2022 operating budget. They say the town can operate properly next year while giving administration time to have a good plan for the operating budget.  

This won’t delay any payments the town has to make. 

Mugford says it’s been past practice to use 50 per cent of last year’s budget to make up the interim budget. He adds for the municipal government, there won’t be significant changes in regards to operations. 

“There’s certain individual line items that will potentially change drastically. We’ve noticed over the past year that fuel as an example is one where there’s a significant amount of variance. But generally speaking, you don’t have that many major changes year over year. The exception being in the case of the town of Peace River, we transitioned operations of the airport, which was disposed of and transitioned to the airport authority.”

Budgets go through multiple phases of review. In some areas, values are known in advance. 

“Some of the companies that we procure services from have told us in advance what they’re going to charge us. In some instances, we use previous year trend data. And in some instances, we use that estimate based on where we know prices are today and where we anticipate they’re going to go in the future.”

The interim budget will be reviewed by council sometime this month and will be officially approved at the end of March. 

Mugford began his position in Oct. while the new CAO, Barbara Miller, began in Nov. 

“We didn’t want to rush a budget. We wanted to make sure that we had time to fully understand all of the elements that go into it–We want to present a budget that’s accurate, and that, as best as possible, we minimise the risk in the budget. Part of that is being very thorough in reviewing what’s included in it.”