Edmonton businesses urge council to focus on core services: ‘7% is too taxing’

Click to play video: 'Concerns with City of Edmonton’s proposed property tax increase'
Concerns with City of Edmonton’s proposed property tax increase
There is a lot of anxiety in Edmonton's business community ahead of city council's 2024 budget deliberations. As Sarah Komadina explains, business leaders are now offering recommendations on ways to keep the expected tax hike a little lower – Nov 20, 2023

In a joint statement issued Monday, several organizations representing Edmonton businesses expressed concern about the proposed tax hike and urged city council to be fiscally responsible.

The open letter is addressed to city council and comes from Edmonton Chamber of Commerce, Edmonton’s Commercial Real Estate Development Association NAIOP, the Building Owners and Managers Association (BOMA) Edmonton, and the Urban Development Institute-Edmonton Metro (UDI).

Together, they say the proposed 2024 municipal budget increase — “potentially escalating the annual impact to over seven per cent” — is raising concerns in the local business community.

“Anyone who understands compound interest will understand the long-term impacts that you have as you build five per cent on last year’s five per cent and we are already in the second year and it’s a seven per cent proposed increase,” said Doug Griffiths, president and CEO of the Edmonton Chamber of Commerce.

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“That’s why we are encouraging the council to go back and find ways to help mitigate this and at least get back to the five per cent they originally proposed in the four-year-long budget,” he said.

“Seven per cent is just too taxing on our communities — the businesses and the people that live here.”

Click to play video: 'Edmonton city councillors begin 2024 budget talks, address possible 7% tax increase'
Edmonton city councillors begin 2024 budget talks, address possible 7% tax increase

At the end of October, the city released its fall budget adjustment reports, recommending a 7.09-per cent tax increase next year — 2.13 per cent above what was originally approved by city council when it set the four-year budget in December 2022.

At that time, Edmonton city council approved the 2023-2026 budgets with annual property tax rate increases of about five per cent each year.

The city’s financial pressures include significantly higher energy costs, as well as lower-than-forecast revenues from transit fares and ATCO Gas franchise fees, and a higher-than-forecast arbitrated salary settlement.

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The recommended tax increase would mean Edmonton households would pay about $750 for every $100,000 of their assessed home value in 2024 — that’s $49 more than in 2023.

Click to play video: 'Civic Matters: A look into the Edmonton Police budget'
Civic Matters: A look into the Edmonton Police budget

The joint letter from the business community stresses it is critical that city council uphold “fiscal responsibility while evaluating budgetary priorities based on their economic repercussions.”

“Our message to the city council is all about balance — finding ways to grow without piling on extra taxes,” Griffiths said in a news release.

“We’re pushing for smart investments and careful spending, aiming to boost Edmonton’s prosperity without burdening people with high taxes.”

The open letter asks council to focus on igniting new investment, zero in on areas where city hall can succeed, and commit to measurable progress.

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“Not every problem needs to be dealt with at city hall,” the letter states. “Council should get out of whole lines of business that are not core mandates of a municipality and/or which would be better handled by the private sector, NGOs, or other orders of government.”

Griffiths, a former MLA and past minister of municipal affairs under Progressive Conservative premier Alison Redford, said this council suffers from “some scope creep.” He said council is tackling issues that are noble, but outside its purview.

“We recommend council goes back and looks at all the lines of business and get back to doing what a city council is supposed to do, those basic core services, and make them exceptional. That is how you build a great city in so many circumstances,” he explained.

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Slower snow removal service expected in Edmonton

The groups ask council to focus on what municipal governments need to do best.

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“The ‘basic stuff’ is the most important to most people (i.e. snow clearing, road conditions, well-maintained parks, efficient waste collection). A well-run city that provides the basics will support a high-functioning business community and citizenry.

“When infrastructure is not well-maintained and operations struggle, we lose credibility and a sense of civic pride.”

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Together, the business organizations also offered recommendations to optimize the city’s financial resources, including leveraging the $8-million EPCOR dividend “to mitigate property tax impacts instead of allocating it to new spending initiatives” and to review agencies, boards and commissions for efficiencies and cost savings.

“That extra dividend that is coming from EPCOR — that they never counted on and never anticipated — should go back into offsetting the tax increases they are proposing,” Griffiths said. “It amounts to about a half per cent decrease right off the top.”

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The groups also want to see council be more transparent on labour cost increases, refine its budget priorities, maximize economic returns, and prioritize, delay or cancel capital projects that aren’t essential city requirements.

“The business community urges Edmonton’s City Council to engage in practical steps to eliminate the proposed budget increase,” the news release says.

“Now is the time to scrutinize all expenses and revenue sources.”

Click to play video: 'Edmonton businesses concerned over recommended tax increase'
Edmonton businesses concerned over recommended tax increase

Edmonton Coun. Anne Stevenson admits the proposed tax increase is bigger than she wanted.

“It’s higher than we budgeted for at 4.96. I think, as I’ve heard from a lot of businesses and residents, there have been a number of pressures — inflation — that have impacted households and businesses, and those have had the same impact on the city’s budget.”

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Click to play video: 'Edmonton city councillors begin 2024 budget talks, address possible 7% tax increase'
Edmonton city councillors begin 2024 budget talks, address possible 7% tax increase

Stevenson said council doesn’t have a lot of wiggle room but councillors will be trying to find adjustments to bring the taxes down.

“I’m always hopeful. I think there’s different options we can explore, not only in finding savings but also in finding new revenue sources, be really creative,” she said.

“But for me it’s really important that we don’t make short-sighted decisions. That’s part of why we’re in the position we are: we haven’t invested consistently in the things we need to be investing in.”

And, while it’s not finished yet, the city is in the middle of re-prioritizing $240 million for some core services.

“And priorities like climate change, transit and housing. I’m really excited by that… I wish it was happening sooner. I wish we had a bit more on the table for this budget cycle. But that’s work that’s ongoing and I think will help alleviate that pressure on the taxes moving forward.”

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Council will deliberate the proposed tax increases on Wednesday.

Click to play video: 'Edmonton homeowners feeling impact 2023 tax increase'
Edmonton homeowners feeling impact 2023 tax increase

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