Sohi says plan to decrease proposed tax hike would provide 'immediate relief'

Edmonton Mayor Amarjeet Sohi speaks to reporters at city hall on April 4, 2023. (CTV News Edmonton)

Edmonton's mayor is pitching a plan to lower an expected property tax increase next year.

In a Thursday letter, Amarjeet Sohi outlined a series of budget adjustments he said would lower the proposed 2025 tax levy by "at least" two per cent. 

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They include:

• temporarily modifying the Neighbourhood Renewal program to pull $15 million toward tax levy relief;
• changing EPCOR dividend payments and franchise fee formulas to help replenish financial stabilization reserves;
• reallocating funding to support the City Centre Optimization Pilot, previously funded by the province, to rebuild vibrancy downtown; and
• creating an industrial growth hub to boost non-residential tax income, using funding pulled from existing planning and development reserves.

The current city budget was set in 2022. City administration said it is no longer enough to support the same levels of services due to population growth, rising costs and changing needs.

Budget adjustments for 2025 were submitted to council on Nov. 13. They included reducing spending and adding another 1.1 per cent to the property tax increase to replenish financial reserves and fund changes for next year's election.

Sohi said, rather than make cuts, he would like city administration and council to focus on streamlining operations, policies and procedures.

"For example, we heard this week that the Neighbourhood Renewal Program must align with 44 different council-directed policies, adding unnecessary complexity," Sohi said in the letter.

Sohi said, while his plan would offer "immediate relief" through lower taxes, there is more work to be done in the long term.

"It is clear the status quo is not working," he said. "Our budgeting process must be overhauled and council needs to do a thorough evaluation of the city’s programs and services to confirm they are delivering value and meeting the expectations of Edmontonians."

This summer, the 2025 property tax increase was forecast at 13 per cent, up from the seven per cent predicted last fall. City staff have trimmed millions of dollars from the budget to get the proposal down to 8.1 per cent.

One of the reasons cited by the city for ballooning taxes has been the elimination of a grant designed to offset unpaid property taxes by the provincial government – a move Sohi said has "short-changed" Edmontonians more than $80 million since 2019.

However, the mayor said Premier Danielle Smith "assured" him she is "seriously considering" reinstating the Grant in Lieu of Property Tax, which would lower the tax levy another 0.7 per cent.

Sohi's ideas "would allow us to reimburse our reserve funds that were depleted over the past few years due to inflation and growth pressures," the mayor said. "This would restore fairness to Edmonton taxpayers."

Sohi will submit his plan to city council on Monday for the start of deliberations for 2025 budget adjustments.

Other motions include reallocating funding to support tree care, the Ride Transit Program for low-income residents, as well as the creation of a fund to help communities with waste and graffiti removal.

Council is expected to finish deliberations on Thursday.