Edmonton city council set to approve lower-than-expected 2025 tax increase

Edmonton property taxes will be rising less than expected next year.

While the final number has not yet been decided, the 2025 tax increase is expected to be closer to six per cent.

That's less than the eight-per-cent starting point when city council began budget adjustment deliberations Monday, and a lot less than the 13 per cent forecast this summer.

The reduction is thanks in part to a plan spearheaded by Mayor Amarjeet Sohi, who proposed a plan to reallocate funding to cut down the hike.

"It responds to today's affordability challenges, while not losing the long term view and our ability to deliver core services in the future," Sohi said.

Every city councillor supported at least part of that plan.

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Sohi initially proposed money be taken from the Neighbourhood Renewal Program to reduce the tax increase. But council decided the money should instead come from the Pay as You Go program, a capital project fund typically used for maintenance and renewal.

Cartmell said he was in support of moving neighbourhood renewal money around, but that it would require public consultation and would have to be a future conversation for now.

"This funding source is Pay as You Go, which is different capital projects," he explained.

"Which ones? Don't know. Can they manage it? Sure. Will they manage it in a way that we want? Don't know. Right? So it actually takes it out of our realm, whereas we very discreetly would have known where neighborhood renewal was going to go."

Sohi said any projects that are underway won't be impacted by the reallocation of Pay as You Go funding.

For the projects that are affected, council is looking at instating a small annual tax increase starting next year.

"What administration was proposing was a one-per-cent tax levy for two years to replenish (it) … what my proposal will do is that we will have 0.5-per-cent tax levy starting in 2025," Sohi said.

After impacted programs have been reimbursed, Sohi said money from the annual increase will go into a rainy day fund and then a new program to maintain city infrastructure.

"The approach I have taken responds to the affordability challenges today without compromising the city's ability to continue to sustain good quality public services," Sohi said.

"We need to make sure that we're putting enough money for repairs and rehabilitation, and that has not happened in the past."

Cartmell said he is wary of the repayment plan, as future councils would be within their rights to cancel it.

"Now, they might not want to. It might not be wise, but you cannot bind future councils," he added.

Ward Métis Coun. Ashley Salvador said she's happy to see council considering creating a dedicated renewal fund.

"That is something that I've been advocating for for numerous years" Salvador said, adding that the city is currently coming in around $470 million under its ideal renewal spending each year.

"As a councillor who represents solely mature neighborhoods that were built out in the 50s and 60s, we've had questions related to whether rec centers are going to have to be closed, whether we can afford to maintain all of these beloved facilities that people have come to love.

"Having a dedicated renewal fund will ensure that we can do that."

In addition to trimming the tax bump, council approved the addition of money to programs like subsidized transit, tree care and downtown revitalization.

Community leagues will also get a one-time cash boost, and the city will look at setting up a growth hub to grow Edmonton's industrial tax base.

Budget deliberations are expected to wrap up Thursday.

With files from CTV News Edmonton's Jeremy Thompson