City council is leaning towards boosting investment in the city's economic development arm to help offset the damage caused by the current recession.

Council's priorities and finance committee has voted to give Calgary Economic Development an additional $7 million to fund specific programs over the next three years. The issue will go to a full city council vote later this month.

But today's vote came after the city's manager, Jeff Fielding, gave his political masters a blistering speech of his own.

He called the $7 million investment a 'pittance' which didn't seem to merit the numerous questions that were asked about how the money would be spent.

"Is it fully baked? I would suggest it's not. But is it giving you enough direction that that's where you should put some effort? I would say it is," said Fielding.

His voice rising, the manager spoke directly to the politicians on the committee. 

"If you really are serious about addressing the transformational change that looks like it's on the horizon, you're going to have to invest more and you're going to have to show more leadership around how that comes together," said Fielding.

Blunt talk doesn't bother mayor

Calgary's mayor told reporters that he didn't mind Fielding's blunt talk.

"My colleagues who work for the city should give their best opinion at all times and not worry about the political filter. Our job is to apply the political filter, so I love this kind of conversation," said Naheed Nenshi.

That said, Nenshi added that council is well within its rights to question how Calgary Economic Development is planning to spend the additional funds.

The agency's CEO, Mary Moran, outlined to the committee how it will use the $7 million:

  • $3,925,000  Accelerate Diversification: Targeting sectors like logistics, film/creative industries, agribusiness, renewable energy.
  • $1,500,000 Marketing Campaign: Local and national ad campaign to encourage investment in Calgary.
  • $750,000 Head office/Real estate action plan: Target companies who could relocate downtown, potentially create 500 new jobs.
  • $500,000 Global Talent Hub: Identify Calgary workers who can work from home with companies elsewhere.
  • $325,000 Innovation Movement: Attracting new businesses, helping local companies expand, hopefully create 500 new jobs.

The committee voted to approve the additional money, but the full details of how the funds will be spent will be finalized and presented to council on February 22.

Fielding also told council members that media negativity about Calgary's economy is magnifying the public perception of how badly the city has been hit during the downturn. He said that only creates a greater need to tell Calgary's story in other markets.

Unemployment in Calgary could reach 12 per cent — Calgary Economic Development

In CED's presentation to the committee, it noted that unemployment in Calgary has now hit seven per cent with "some forecasting it will go as high as 12 per cent."

City administrators are planning other economic initiatives that they want council members to discuss when they do a halfway point tune-up on the city's four year budget plan this November.

Fielding said the idea is not "kicking it down the road" but rather having a detailed analysis prepared for council to vote on this fall.

The committee also voted today to reject a proposal from Councillor Evan Woolley to give thousands of Calgary businesses a break on their business tax this year and next.

He suggested a $30 million reduction in tax this year and next could help business owners save jobs or help them stay afloat during the current downturn.

That proposal was watered down to a one-time $7 million dollar tax break, but it too was rejected by the committee.