Edmonton Journal

Tax hike to be higher than expected

City staff calls for 8.7% increase, up from 6.6% jump set last fall


Property taxes in Edmonton are likely going up much higher than expected.

City administra­tors are recommendi­ng an 8.7 per cent hike for this year instead of 6.6 per cent city council set in November. New numbers were announced Thursday as council prepares to finalize the rate at the spring budget update meeting on April 23.

While council revisits budgets every spring, tax rates typically don't change much from what's decided every fall.

The city also expects taxes will be 1.7 per cent higher than expected in each of the next two years — 7.0 per cent in 2025 and 6.4 per cent in 2026.

Stacey Padbury, the city's chief financial officer and deputy city manager, told reporters Thursday about half of the total 8.7 per cent increase for 2024 is to pay to maintain existing city services.

Higher workers' compensati­on fees and labour costs, utilities and fuel are some reasons the increase is higher than anticipate­d, she said.

“We don't take this increase recommenda­tion lightly. However, to maintain the financial stability we face, these are the decisions that need to be made,” Padbury said.

“There are two things that are true at the same time — the city's financial position is stable and we face growing financial pressures.”

Padbury said Edmonton is one of many municipali­ties in Canada navigating “changing economic and political environmen­ts.”

“The city is dealing with the same financial challenges Edmontonia­ns are dealing with as we recover from a high inflation period, which is resulting in an increased cost to deliver the same level of services.”

Edmonton will need to dip further into its rainy day fund, the financial stabilizat­ion reserve, to offset the $40.1 million deficit, bringing the balance of that account about $65 million below its minimum balance if council approves the recommende­d spending strategy, city staff confirmed in an email later Thursday. A threeyear plan to return funding to that account would mean adding about a one-per-cent tax increase on top of what's already been approved for each of the next three years.

The Alberta government is paying the city $3.5 million less for its buildings in Edmonton than expected — grants in lieu of property taxes — which is equivalent to a 0.2 per cent tax hike, budget documents show.

Padbury said the city is not making as much money as expected from transit since switching to ARC cards despite the fact more people are riding the bus and taking LRT. She did not have details on how much less money the city is bringing in.

Newly signed collective agreements between Civic Service Union (CSU) 52 and the City of Edmonton, and with Edmonton Public Library workers, account for the largest portion of the higher-than-expected tax increase — about 1.9 per cent.

An added $20.35 million for City of Edmonton workers' salaries, $5 million for civilian Edmonton Police Service staff, and $2 million for Edmonton Public Library staff, plus $7.8 million for back pay and lump sum payments across the unionized workforce are related to the tax increase.

Increases in Workers' Compensati­on Board premiums will cost an extra $7.4 million, equivalent to about a 0.2 per cent increase in tax.

There is also a 1.8 per cent increase from putting another $35.4 million from tax dollars into the city's rainy day fund, along with other decreases that ended in a 2.1 per cent rise overall.

However, other savings or higher revenues — such as $4 million more from property assessment growth and $2.5 million less for pension premiums — offset some of the other increases.

About 1.6 per cent of the total tax increase, already set last year, comes from police salary settlement­s.

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