Edmonton city council to vote on amendments to 2020 budget amid COVID-19 shortfall

Flags lowered at Edmonton City Hall on Wednesday, Jan. 8, 2020 to honour the victims of the Tehran plane crash. Courtesy: Twitter/City of Edmonton

If suggested amendments to Edmonton’s 2020 budget go ahead, property owners could be paying less in property taxes than they did last year.

In December, city council was recommending a 2.08 per cent tax increase for 2020.

Now, in response to the COVID-19 pandemic, city management is suggesting Edmonton introduce a 1.4 per cent property tax increase.

However, factoring in the announcements from the province in March about cancelling the increase to the education tax as well as the deferring the provincial portion of the municipal tax, the tax rate would dip below last year’s number.

WATCH BELOW: (From April 15) How COVID-19 will result in lower municipal taxes in Edmonton

Click to play video: 'How COVID-19 will result in lower municipal taxes in Edmonton'
How COVID-19 will result in lower municipal taxes in Edmonton

According to interim city manager Adam Laughlin, residential property owners would see a decrease of 0.8 per cent compared to last year’s taxes and there would be a 0.9 per cent reduction for non-residential owners.

Story continues below advertisement

“We appreciate that Edmontonians are not in a position to pay additional taxes to cover these additional costs and, in fact, many have challenges paying the tax increases already anticipated for this year,” Laughlin said.

Financial news and insights delivered to your email every Saturday.

Iveson added city council is committed to attempting to bring that tax number as low as possible and said it’s no small achievement that city administration has already been able to lower it to the new suggested number.

“That’s an extraordinary feat with a nine-figure hit projected already to our revenues for this year.”

Click to play video: 'Edmonton mayor reacts to cancelled summer festivals'
Edmonton mayor reacts to cancelled summer festivals

According to Iveson, the City of Edmonton will not be looking to dip into a deficit for this budget year.

On Tuesday, the provincial government said it is considering allowing municipalities to run a deficit as they struggle to battle the COVID-19 pandemic and its subsequent financial impact.

Story continues below advertisement

“Even encouraging municipalities to run deficits could make it really difficult for communities to rebound from this crisis and doesn’t recognize the stark financial limitations local governments already face.”

In an effort to balance the budget without skyrocketing property tax numbers, the city announced a few projects will have to be put off.

Click to play video: 'Alberta considers letting cities budget for deficits amid COVID-19'
Alberta considers letting cities budget for deficits amid COVID-19

The city had been working to resdesign the bus network. The new network had promised to include more frequent service, longer distances to walk to bus stops and provision of a secondary service to provide “First-KM, Last-KM” access.

The planned summer launch of a city-wide cart waste management service is also being thrown out. Those who are currently participating the pilot project will not see a change in their waste pickup, Laughlin said.

Story continues below advertisement

One project the city has promised to go ahead with is the Valley Line LRT. Of the proposed tax increase, .08 per cent of that would be going to the project with a .04 per cent offset due to a decrease in budget.

“The provincial and federal governments have committed 80 per cent of the funding for this project and a benefit for Edmontonians of 20 cents on the dollar in a once-in-a-lifetime opportunity for a capital project that will create jobs and contribute to Edmonton’s economic recovery,” Laughlin said.

One per cent of the tax increase will be used to honour the tax increase agreement with the Edmonton Police Service.

As of now, Laughlin believes the city will be able to complete its capital construction program for the 2019-22 budget cycle.

“This will help mitigate the impact of further economic slowdown in Edmonton and prevent job losses in the construction sector,” he said.

The proposed changes to the budget will be heading to city council on Monday.

Sponsored content