Edmonton city council approved next year’s property tax increase on Thursday.
After four days of deliberations, and some contention ahead of the final vote, council passed a 6.1-per-cent increase for 2025.
That equals about $200 more for the average homeowner.
City council acknowledged that another large tax increase next year, after this past year’s 8.9-per-cent hike, will be challenging for residents.
“That’s really unaffordable, and that’s very, very hard to support,” said Ward pihêsiwin Coun. Tim Cartmell.
“Even though I think we’re doing the right thing about addressing some of these structural deficits, it’s at a time where people are feeling a cumulative impact about affordability,” said Ward Nakota Isga Coun. Andrew Knack.
The city said provincial cuts, inflation and past spending decisions are all squeezing finances.
“We’re feeling the costs and consequences of provincial downloading and at the same time, Edmonton’s population has grown by more than 100,000 residents in just two years,” said Ward Métis Coun. Ashley Salvador.
Mayor Amarjeet Sohi believes the current budget finds a balance between affordability and maintaining essential services required for Edmonton’s rapid population growth – such as public transit, policing, recreation centres and libraries.
“You can always lower taxes, but at what cost to services?” Sohi said. “In this moment, we have been able to reduce taxes by two per cent, and at the same time, continue to invest in core municipal services that people rely on.”
Rather than make cuts to lower the increase, council will use money from the city’s Pay as You Go fund, mainly used for capital projects.
Four councillors voted against the budget adjustment, while others said it was the best they could do in a challenging time.
“A zero per cent tax increase, or anything less than what we’ve arrived at would be absolutely fiscally irresponsible and (would) actually end up hurting Edmontonians and costing us more down the road,” said Ward Anirniq Coun. Erin Rutherford.
“I think this is a bit of a middle ground,” Knack said. “We’re not addressing every infrastructure gap that we have or every issue that we’ve ever had, but at the same time, we have to stay firm on some of these core services that people expect.”
Money taken to reduce the tax increase next year will be paid back over the next few years using a new 0.5-per-cent annual tax increase.
Once the borrowed money is repaid, that tax increase will go toward a new fund for maintaining and repairing city infrastructure.
“It creates a $56 million fund ongoing forever, that allows us to catch up further on the renewal deficit that we have. I think that the ongoing $56 million is a good foundation on which we can build in the future,” Sohi said.
Sohi said Premier Danielle Smith has told him she is seriously considering reinstating the Grant in Lieu of Property Tax.
The grant was eliminated by the province in 2019, and Sohi said Edmonton has lost out on more than $80 million since.
If the grant were to be reinstated in the provincial budget this spring, Edmonton homeowners could see the increase lowered to 5.4 per cent.