Budget adjustment report recommends city further hike 2024 property tax increase by 2.1% to 8.7%

City of Edmonton administration is recommending in a report released Thursday that property taxes rise by 8.7 per cent for 2024, an increase of 2.1 per cent from the 6.6 per cent hike city council approved in December.

The city's spring operating budget adjustment report says the further increase is needed because of the increasing costs of material and labour, says the city's head of finance.

"We now have a much better sense of how much higher some of our costs will be moving forward," Stacey Padbury, the city's chief financial officer and deputy city manager of financial and corporate services, told media on Thursday.

"We can’t continue to absorb the financial impacts we’re facing this year and beyond without adjusting taxes or service levels, and it may take both strategies to ensure our long-term financial sustainability."

In December, city council approved tax increases for the remaining three years of this budget: 6.6 per cent in 2024, 5.3 per cent in 2025 and 4.7 per cent in 2026.

City staff now say just to maintain services such as transit, snow clearing and recreation at their current price points, taxes need to rise by an additional 2.1 per cent this year.

For a home worth $400,000, it means the owner would about $260 more in taxes in 2024 than they did last year.

Recent labour settlements — with the police and with the Civil Service Union — are leaving a mark on budgetary demands, too, as is spending by city council on urgent issues such as housing, climate change, homelessness and transit safety. Substantially reduced municipal funding from the province has an impact as well.

The city has been streamlining the budget in various ways since 2015, saving $2 billion in that time. Padbury says there's no fat left to trim.

"Either there’s tax increases to pay for the services that continue to get provided, or there needs to be a discussion about which services Edmontonians no longer wish to pay for," she said.

This likely isn't the end of tax increases either. The city has dipped further into its reserve to pay off its $40 million deficit from last year. That account is now well below its minimum required balance.

Padbury says the legally mandated strategy to replenish that reserve will add one more per cent in property taxes for three years.