City of Edmonton recommends 8.1% tax hike for 2025

Edmonton City Hall in an undated photo. (CTV News Edmonton)

The City of Edmonton is recommending a 8.1 per cent tax increase for 2025 in its draft budget to tackle the shortfalls city council is facing. 

With the cost of inflation and population growth, it’s becoming more expensive to deliver the same services, the city said in a news release on Thursday.

City staff is projecting a $34 million deficit this year.

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“While we planned for these pressures, they’re much bigger than forecasted when we developed the four-year budget in 2022,” said Stacey Padbury, Chief Financial Officer and Deputy City Manager, in a news release.

Padbury says it’s unsustainable to be paying for services beyond its budget.

“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.”

The approved seven per cent tax hike was made in April to help manage budget challenges.

The draft report says the additional one per cent increase would help replenish the financial stabilization reserve. This reserve is used to help with single budget pressures like deficits. The remaining 0.1 per cent increase would help fund the 2025 election.

City staff is also looking at ways to reduce increases by proposing $8.5 million in ongoing savings. The savings would come from cuts made to the city’s phone contracts and slowing down the Heritage program.

“The challenges we face are complex and will take several years to manage, but we can make meaningful progress with these recommendations,” Padbury said.

The 2023-2026 operational city budget funds 70 services and over 200 construction projects in Edmonton.

Proposed changes are also coming to the capital budget. The city is recommending a $152 million increase so its capital plans, mostly for neighbourhood renewal projects and the Terwillegar Drive Expressway.

The reports will be presented to Edmonton’s city council on Nov. 13. Budget adjustments will be made between Dec. 2 and 5.