8.7% tax increase recommended to meet Edmonton’s 2024 operating budget

A view over the North Saskatchewan River valley to the skyline of downtown Edmonton, Alberta, Canada. THE CANADIAN PRESS IMAGES/Don Denton

Edmonton’s tax increase will be higher than expected in 2024 because the city says costs to maintain the existing level of services are rising faster than expected.

As was the case last year, inflation continues to be a challenge for the city.

Edmonton released its spring operating budget adjustment report on Thursday, recommending an 8.7 per cent tax increase for 2024 — an additional 2.1 per cent increase over what was approved in November 2023.

The city said the increase is necessary to respond to several increasing cost pressures and continue to provide the services outlined in the 2023-2026 budget.

“We don’t take this increase recommendation lightly,” said Stacey Padbury, chief financial officer and deputy city manager of financial and corporate services.

“However, in order to maintain the financial stability and address the pressures we face, these are the decisions that need to be made. “

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Click to play video: 'City of Edmonton aims to cut $60M from budget while re-allocating another $240M'
City of Edmonton aims to cut $60M from budget while re-allocating another $240M

The increase means homeowners should expect to pay $65 more for every $100,000 of their assessed home value in 2024.

Broken down, the average household in Edmonton would pay about $8.96 per day. The city noted the tax increase will affect individual owners differently, depending on how their property’s assessed value compares to the market.

City council approved several adjustments to the 2023-2026 budget on November 28, 2023, to arrive at property tax levy increases of 6.6 per cent in 2024, 5.3 per cent in 2025 and 4.7 per cent in 2026.

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Now, city administration is recommending tax levy increases of 8.7 per cent in 2024, 7.0 per cent in 2025 and 6.4 per cent in 2026.

“Since council last discussed the 2024 budget last fall, we have encountered higher WCB premiums and we have a better understanding of longer-term labour costs,” Padbury said.

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“In order to keep our financial status strong and maintain services we need to fund these pressures through increased property taxes.”

Padbury said either taxes need to increase, or a hard conversation needs to be had about what services will be cut to save money.

“What’s important to Edmontonians is that the services that you see when you step outside your door every day, and we always try to minimize the impact on services,” she said.

“But those services come with tax increases just to maintain them. Not every tax increase can be about providing a new service, or would we like to scale back some of our services, in order to take the pressure off taxes?”

In the past, transit was a consistent, reliable source of revenue but the city said that has changed. While ridership has returned to pre-pandemic levels, people are using transit differently and now there are also higher costs for cleaning and security.

“Because of things like hybrid work, people who used to buy a monthly pass are now riding with the tap-on tap-off of the ARC card and not taking as many trips so they’re not hitting the cap,” she said, adding there is also a higher demand for discounted student and senior fares.

“We’re seeing people shift from full-fare products to concession fare products and more low-income transit pass riders.”

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Another challenge: less money coming in from the province.

Last week, Mayor Amarjeet Sohi sent a letter to the Alberta government saying  decades of neglect from the provincial government have put Edmonton in a difficult financial situation. He called on Premier Danielle Smith to step up and give the city equitable treatment.

The province is not required to pay taxes to the City of Edmonton on its properties, but a long-standing grant program has seen the province essentially reimburse the city for some of those costs.

In 2019, that amount was reduced to 50 per cent.

“We have to fill what was previously funded by the Government of Alberta with tax levy or some other civic funding source,” Padbury said on Thursday.

Sohi asked the province to retroactively pay back the difference — to the tune of $60 million. Smith said she looked at Sohi’s letter but made no promises.

Click to play video: 'Concerns with Edmonton’s proposed property tax increase'
Concerns with Edmonton’s proposed property tax increase

The city’s budget is broken into four parts: capital, operating and two utility budgets. The capital budget covers major, long-term expenses such as building new facilities and big projects.

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The operating budget is for day-to-day expenses such as maintaining roads, paying employee wages, budgets for Edmonton Fire Rescue Services and the Edmonton Police Service, and running facilities such as recreation centres, parks and other city properties.

The recommended budget adjustments will allow the city to maintain funding for its 70 services and deliver service increases council approved for 2024, including:

  • Operating the new Metro Line LRT to the new NAIT Station
  • Adding more bus service hours to improve public transit access and align to service standards
  • Expanding library service at Heritage Valley
  • Advancing the work on Edmonton’s anti-racism strategy and truth and reconciliation

The city said the spring supplemental operating budget adjustment is the last step in finalizing the annual tax increase.

The report is set to be discussed by the city council on April 23 and 24.

The city said it will bring forward bylaws on April 30 to set the tax rates based on the approved tax increase. Tax notices will be mailed to all property owners on May 24, with property taxes due on June 30.

— More to come…

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