Edmonton heads toward tough budget with steep tax increases or deep service cuts

On average, staff said Monday, council landed around the 3.4 per cent increase administration identified is necessary to maintain existing services.

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Edmonton city councilors will need to decide between deep cuts to some existing municipal services or potentially significant hikes to property taxes later this year.

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Council got a sobering look at the city’s ability to fund existing programs Monday morning, not including future items Edmonton has already committed to, and anything extra councilors may want to add down the road. Inflation, an expected shortfall in revenue from transit fares, declines in funding from photo radar, and years of lower tax rates are some factors city managers identified as potentially playing a role in the city’s current situation.

Monday’s discussion is preliminary. It was meant as an opportunity for city staff to get a read on what tax rates councilors could stomach — councilors voiced support for a range of tax increases of between one and five per cent.

On average, staff said Monday, council landed around the 3.4 per cent increase administration identified is necessary to maintain existing services.

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Continuing with new projects already set in motion would lead to an 8.5 per cent hike next year, but Mayor Amarjeet Sohi said he doesn’t expect council will support such a steep increase. As discussions are still in the early stages, he said Edmontonians shouldn’t focus on these numbers just yet.

“I think that is not where council will land, I can tell you that, because we want to make sure Edmontonians’ living remains affordable, that our taxes remain affordable, that our user fees remain affordable,” he told reporters outside council chambers Monday .

“But at the same time, we need to recognize that as the city grows, as our expectations from city government grows, we need to have additional resources to provide those services … Whether it’s building more sustainable modes of transportation, all those things are what Edmontonians want us to take action on, but we will be very responsible.”

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Council will need to prioritize which future projects they want to support during the budget discussions later this year, Sohi said.

Tax on parking lots and mansions?

Musing about other ways the city could raise money, Coun. Michael Janz asked city staff during Monday’s meeting if they should be looking at other revenue streams like taxes on vacant lots, parking lots, or mansions.

“Vancouver has a mansions tax … I think we need to talk not just about tax tolerance, but who is paying the tax,” said Janz.

“We have people who are still being nickel-and-dimed to just survive in this town. I certainly want to have that conversation about equity, and not cutting vital public services.”

Much of the city’s available money coming in is already tied up in projects approved in previous years — $3.83 billion for creating new projects from 2023-2026 — according to to presentation from administration on Monday.

Some of these big-ticket items include the Valley Line West LRT, Capital Line South LRT extension, and Yellowhead freeway conversion. This also includes major projects approved by this council last year and in the spring update, including Lewis Farms Recreation Centre, upgrades to Edmonton Valley Zoo, and a recent decision to fund a pedestrian bridge between Edmonton and Strathcona County.

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