Tax hikes or service cuts? Edmonton faces another year of budget pressures – Edmonton

Without service cuts, Edmonton residents could face a 13 per cent tax hike next year.

At a meeting of the executive committee on Wednesday, councillors were briefed on the fiscal outlook for next year. The initial estimate is for a 13 per cent tax increase in 2025 with no adjustments.

After some adjustments and deferring other costs, the city expects the increase to reach 8.8% next year.

The City of Edmonton says it faces an $88 million budget challenge due to inflationary pressures, rapid population growth and the changing service needs of Edmontonians.

“The effects of inflation are still there and it’s driving up costs like fuel costs,” Councilman Aaron Paquette said.

The city said it will explore all options to address its financial challenges while maintaining financial health.

“We’re committed to finding a balance between providing the services Edmontonians rely on and keeping property taxes and user fees manageable, but this is particularly difficult given the budget challenges the City and Edmontonians are currently facing,” said Stacey Padbury, Chief Financial Officer and Deputy Mayor for Finance and Corporate Services.

Get national breaking news

For news impacting Canada and around the world, sign up for breaking news alerts and we’ll send you alerts directly as they break.

By providing your email address, you have read and agree to Global News’ terms and Conditions and Privacy Policy.

“The financial challenges we face are complex and will take several years to resolve. This will require us to make difficult choices between increasing property taxes and user fees to fund these ongoing budget challenges or reducing service levels, and we may need to pursue both strategies to ensure our continued financial stability.”

Mayor Amarjeet Sohi said both tax increase figures proposed Wednesday were too high.

“Either maintain the 7% rate that we have approved, which I think is too high, or reduce it,” he said.

“Edmontonians don’t have the capacity to absorb more than that, and we need to be mindful of that.”

Earlier this year, parliament approved an 8.9% tax increase for 2024. Inflation and falling revenues were cited as reasons for the tax hike.

“We can’t continue to raise taxes to pay for services without looking at the entire service and the service review, looking at each department and finding out where less can be done,” Sohee said.

The report was accepted as information on Wednesday. Members of Parliament will review the budget in the coming months.

“As the mayor mentioned, core services won’t be impacted, but there are a lot of other services that people might think of as ‘this is part of my city’; those might be impacted,” Paquette said.

The government will propose changes to the autumn budget in November, and the council will consider all the changes in December.

— With files from Erik Bay, Global News.

© 2024 Global News, a division of Corus Entertainment Inc.