After lengthy debate at Edmonton City Hall on Tuesday over amendments to the operating budget, city council voted to approve changes that will result in an 8.9 per cent property tax hike in 2024.
The city announced the approved budget adjustments just before 11:30 p.m. on Tuesday. The adjustments — which include a 8.9 per cent tax increase in 2024, 7 per cent in 2025 and 6.3 per cent in 2026 — were unanimously approved.
“If the budget had not been passed — if the two per cent increase from 6.6 to 8.7 had not been passed — then that would mean a deficit budget and a deficit budget is against the law. We cannot have a deficit budget,” Coun. Tim Cartmell explained Wednesday.
Discussions earlier in the day originally saw city councillors debate amendments that would have resulted in an 8.7 per cent property tax increase.
“The city is dealing with many of the same financial challenges as Edmontonians, especially when it comes to the cumulative impacts of inflation,” said Stacey Padbury, the city’s chief financial officer and deputy city manager of corporate and financial services.
“Today’s adjustment allows the city to respond to the high costs we’re facing now, as well as to lower revenues and a rapidly growing population, so that we can continue to deliver the services that we heard matter to Edmontonians.”
The city said the tax increase will help the city “respond to several budget pressures that have increased significantly” since the city constructed the current budget in 2022.
Among those increasing costs the city cited were higher-than-expected energy costs, labour costs and Workers’ Compensation Board insurance premiums. At the same time, the city said is it receiving lower-than-expected revenue for gas franchise fees from the utility provider ATCO, from business licences and from transit fares.
Those increased costs and decreasing revenues also come at a time the city said Edmonton is experiencing higher-than-expected population growth.
“We can’t continue to absorb the financial impacts we’re facing this year and beyond without adjusting taxes or service levels,” Padbury said. “And it will likely require some tough choices on both fronts in the years ahead to ensure our long-term financial sustainability.”
Global News spoke with Mayor Amarjeet Sohi and several city councillors while an 8.7 per cent tax increase was still being discussed and before the final vote on the adjustments was held Tuesday night.
“We are under a lot of pressure,” Sohi said. “We’re investing money in protecting services, we’re adding more important services like hiring more police officers, transit peace officers, social workers, building more housing, taking action on climate change, improving snow and ice, putting more money into public transit.
“I think we need to look for opportunities to reduce and look to areas we can do without.”
Cartmell said he believes major changes need to be made to the city’s spending plan moving forward. He’d like to see the budgeting process rebuilt entirely.
“If we were going to actually start effectively a zero-based budgeting process or a prioritized budgeting process, which we asked for previously, I think you start now to build to that next four-year budget. The next four-year budget is 2027-2030. So, election in October 2025, you’ve got a year to condition and a year to put that in place.
“To actually do that fundamental, right-to-the-basics, start it bare and build the budget up, would take some time and I do not think there is will on this council to do that,” Cartmell said.
In November, city council had approved a 6.6 per cent property tax increase but increasing fiscal pressures saw councillors debate a further hike during this spring’s budget adjustment discussions.
Sohi said one step that could help alleviate at least some of the pressure on city council is something he believes the provincial government should do.
“We are not given the proper amount of property taxes that are owed to the city through grant funding,” he said. “It was $60 million (and) now it’s almost $80 million that the province owes to us in the form of property taxes that they should have paid.
“If they paid those taxes, we’d be in a much better position.”
The province is not required to pay taxes to the City of Edmonton on its properties, but a grant program has previously seen the province essentially reimburse the city for some of those costs.
Cartmell said the provincial government was clear about its municipal funding plans and now it’s up to the cities to adjust.
“The UCP said before the election: ‘This is what’s going to happen, this is what you can expect.’ They were elected. They’re delivering on their mandate. I’m not defending it. I don’t agree with it, but it is what it is.
“They’ve reprofiled their grants to us (and) we need to reprofile our capital plan to adjust to that.
“Those are the amendments I’m trying to move today and quite frankly, I’m getting resistance to do that. We need to adjust to the grants we’re getting and really think about what we spend our dollars on.”
He questions what things the city is prioritizing.
“We’ve got to get back to: what do cities do and what do cities not do? What do other levels of government do? What do people do for themselves?”
Cartmell says councillors cannot be swayed by opposition from a “very vocal minority” and city council cannot please everyone.
“We need firmer backbone at that council table to stick to what is a city service and stay in our lane and not do those other things.
“We’re not attending to those core services. We’re not attending to those things that people want to see from their city,” he said.
“When you look out the front door and you see the grass is cut and the roads are plowed and the gravel is swept up and the litter is picked up and the weeds are picked… then you have some confidence that the city is doing what you need it to do… And then that provides city and city council a little bit of currency to go do some of those other things. We’ve lost that ethic,” he said.
“When people look out the door of their home… they don’t see that. They don’t have confidence in city council.
“We don’t have that currency to do all those other things. But all those other things have been the emphasis of this city council,” Cartmell said. “We’ve got it flipped.”
Tax notices will be mailed to all property owners on May 23, with property taxes due on June 30.
As a result of the tax increase approved Tuesday, the city said that on average, Edmonton property owners can expect an increase of about $66 for every $100,000 in assessed property value.
The city said the average tax increase between 2014 and 2023 was 3.3 per cent, and noted that the last time Edmonton saw a similar tax increase was in 2014, when there was a 7.3 per cent hike.