Hefty 2025 property tax hike looms as budget talks start

Edmonton city council discussed money in all its forms Monday at city hall – be it taxes, deficits or reserves – as it begins two weeks of budget talks.

Councillors are still gathering information before making actual changes to the budget, but the starting point is an 8.1-per-cent tax increase for 2025.

The city is facing inflation, a population boom and pressure to make life more affordable for Edmontonians.

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Mayor Amarjeet Sohi has a plan he says can shave two per cent from that tax increase. One aspect includes pulling $15 million from the neighbourhood renewal program.

"Even if 8.1 per cent goes to 6.6 or 5.6 per cent, that is still roughly 30 per cent in three years," said Tim Cartmell, who represents Ward Pihesiwin in Edmonton's southwest. "That is a lot of money."

Next year's property tax increase had been forecast at 13 per cent this past summer – up from the seven per cent predicted last fall – but city staff have trimmed millions from the budget to tamp the proposal down to 8.1 per cent.

 

Edmonton's current 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, including spending reductions and the addition of another 1.1 per cent to the property tax increase to replenish financial reserves and fund changes for next year's election.

While councillors are searching for savings, there's a growing list of city projects that could use more money.

City staff say the Yellowhead Trail freeway conversion project will cost $105 million more than expected. The project is shared by all levels of government.

The city is also trying to move out of aging office buildings and consolidate work-spaces, an effort that requires $23 million.

Add development work for future school sites and a district park, and that's an extra $170 million council could choose to spend.

"Edmontonians are struggling with an affordability crisis as they have been in the past, and we need to remain mindful of that," Sohi said.

There are unfunded operating costs, too.

If council wants to fill a $26-million hole in transit revenue, it could raise fares, or postpone the planned service expansion...

"We have to make sure that in our efforts to keep property taxes low, that we aren't nickel-and-diming the people who depend on front-line services the most," said Michael Janz, councillor for Ward papastew.

Staff believe new election standards will cost the city an extra $3 million in 2025, and each city union is in collective bargaining right now. Those new contracts will likely add unknown costs down the road.

Some city councillors say the budget process is interfering with their ability to make targeted cuts and needs reform.

"We need to break this thing down and take the time to follow every dollar through the system, and see where it ends up," Cartmell said. "Until we actually do that, we're just cherry-picking. We're just guessing."

Council is also contending with a major drop in provincial funding, particularly in the form of property taxes.

Edmonton is home to 248 provincially- owned buildings. Since 2020, the province has paid the city 50 per cent of taxes on those properties.

Sohi said in September the province owes the city $90 million in back property taxes dating back to 2019.

The province is considering a cash infusion to make up for the property taxes it's choosing not to pay.

With files from CTV News Edmonton's Jeremy Thompson