City of Edmonton proposes 8.1% tax hike in 2025 to cover higher costs

Edmonton property owners may face a tax increase of8.1 per cent next year, the city's finance department said in a budget update Thursday.

A seven per cent hike was previously approved but the proposed increase is part of the city's fall budget adjustment to the original2022-2026 budgets.

The finance team proposes another 7.3 per cent increase in 2026. City council had approved an increase of6.3 per cent inthe spring.

"We are experiencing a growing demand for our services and a growing need for new infrastructure," Stacey Padbury, the city's chief financial officer, said during a news conference Thursday.

Inflationand rapid population growth are makingservice delivery more expensive, Padbury said.

"While population growth adds to our revenues through property taxes, that growth doesn't fully cover the city's added costs," she said.

Edmontonproperty owners were asked to pay 8.9 per cent more in taxesthis year but the municipal government forecasts a deficit of $34 million,based on financial results from the second quarter.

Under the proposed increases,homeowners would have to pay $828 inproperty taxes for every $100,000 of assessed value next year up $62 from this year.

Ward Nakota Isga Coun.Andrew Knack is not surprised by the proposed tax hike needed to cover the estimated deficit, he said.

But he blames higher costson population growth and the provincial government.

Statistics Canada data suggests the city of Edmonton's population grew by nearly 78,000 from 2021 to 2023.

"Two-thirds of our growth is happening in new neighbourhoods, which means new roads are being built, which means new roads need to be plowed and maintained," Knack said.

"Thenwe have new parks and those parks need to be maintained, and we have to build new fire halls and they need to be staffed."

The Alberta government, Knack noted, also does not pay taxes on property it owns in Edmonton. He suggests the citycould maintain the seven per cent tax increase for next year if the provincial government paid taxes.

Mayor Amarjeet Sohi launched a campaignat the beginning of October that urgedthe provincial government to pay the$80 million it has withheld from the City of Edmontonsince 2019.

The city's finance team will present itsreports to council Nov. 13. Council will debate budget adjustments from Dec. 2 to 5,before voting on any changes.

Pressures demanding budget adjustments

Thefinance department adjusts the budgets every spring and fall, based on the current economic situation, external factors and legislative changes.

Encampments and extreme weather are areas the city needs more help with,Padbury said.

"While we plan for these pressures, they're much bigger than what we forecast when we developed the four-year budget in 2022," she said.

Internally, the city renewed collective agreements with unionized workers this year. Wages and salaries make up over 55 per cent of the operating budget.

The City of Edmonton employs 13,327 people, which includes full time, part time, permanent and temporary staff.

This total doesn't include theEdmonton Public Library or Edmonton Police Service.

Thecity is alsospending $1.4 million to covermaintenance costs for the Citadel Theatrelease agreement.

Edmonton must also prepare for the introduction of political parties in the 2025 civic election, as laid out in Alberta's Municipal Affairs Statutes Amendment Act formerly Bill 20.

The city's budget document earmarks $5.2 million for"Bill 20 Update and 2025 Edmonton Election Budget Adjustment."

The finance department also suggests adding$152 million to the city's capital budget, which is currently $10.8 billion.

The extra spending would be mostly forneighbourhood renewal projects and the Terwillegar Drive Expressway.