With city administrators projecting that the City of Edmonton will face a $34 million deficit this year amid ongoing financial challenges, city councillors engaged in discussions on Wednesday about how to keep a tax increase as manageable as possible for 2025.
Earlier this fall, city administrators recommended that city council implement an 8.1 per cent property tax increase for 2025. City administrators have since proposed some ideas to councillors that could reduce that number, including increasing Epcor’s dividend to the city.
“I don’t think I am satisfied settling at 8.1 and I would not vote for that budget,” Coun. Aaron Paquette said on Wednesday.
City council had already approved a seven per cent of that proposed increase in April 2024 in order to maintain services. In August, the possibility of requiring a 13 per cent increase was raised but city administrators worked to reduce that number to the current 8.1 per cent proposal.
City administrators said the additional 1.1 per cent increase is being proposed so that funds from can be placed in the city’s financial stabilization reserve, which helps manage things like deficits. They said the fund was depleted during the COVID-19 pandemic. A small amount of that increase is proposed to be used to help fund the 2025 municipal election.
In a news release issued on Oct. 31, deputy city manager Stacey Padbury noted that administrators have planned for issues that will create challenges in crafting a budget, but noted “they’re much bigger than forecasted when we developed the four-year budget in 2022.”
“We are delivering services beyond what the current budget can support and that’s not sustainable. Like many Edmontonians who continue to deal with high costs, we have to make some tough choices about what money we have coming in and what we’re spending it on.”
City administrators have noted that Edmonton’s quickly growing population, coupled with inflation, has made it increasingly expensive to provide the services that the city currently does.
According to city administrators, last month’s tax increase recommendation also included ideas to achieve $8.5 million in ongoing savings, including to renegotiate the city’s phone contracts and slowing down the Heritage Program.
City councillors also spoke about a longstanding grant to the city that was slashed by 50 per cent once the United Conservatives first formed Alberta’s provincial government in 2019. The “Grants in Place of Taxes” program had essentially served to pay the city the equivalent of property taxes on provincial buildings in Edmonton.
“If the province pays their grants in place of taxes for the services that Edmontonians are rendering to the province, we can knock that (proposed property tax increase) down to 6.5 per cent,” Paquette said.
Coun. Andrew Knack also suggested if the grant is implemented again it will make a difference.
“If we don’t see resolution with the provincial government and their property tax piece, then the main conversation we’re going to have is are we cutting back on some core services to bring it below that 7 per cent?” he said.
On Thursday, city councillors will look at a report recommending they increase their own salaries in 2025.
“For council compensation, if council wants to show leadership, I believe that they should freeze their compensation this year,” Paquette said.
City council is expected to begin deliberations and making decisions on any budget adjustments on Dec. 2.
–With files from Global News’ Jaclyn Kucey