City council, administration wrestle with potential double-digit tax hike for 2025

Edmonton facing revenue shortfall Edmonton residents could be facing a 13 per cent tax increase next year. Jeremy Thompson explains why.

If you thought this year's 8.9-per-cent property tax increase was steep, wait until you see the numbers Edmonton city council and administration are batting around for 2025.

"What we're saying today is that we're somewhere between 9 and 13 (per cent)," Ward Pihesiwin Coun. Tim Cartmell said during council's executive committee meeting on Wednesday at city hall.

"That is going to be a really difficult number for most people to consume."

Mounting financial pressures have councillors talking about next year's property tax increase already, on the heels of their summer recess.

After this year's nearly nine-per-cent bump, councillors were already wary of the proposed seven-per-cent rise for 2025.

Now city staff is saying major moves are required to reign in what could be a 13-per-cent hike.

"I don't think there's any more tolerance for any additional increases to what we have already approved," Mayor Amarjeet Sohi said at the meeting.

"I would rather see that number go down ... but I think we need to look at every option in order to reduce that pressure on Edmontonians at a time when they're struggling with their own affordability challenges.

"We have to say 'no' to some very difficult and important decisions that will be coming in front of us — legitimate asks, very important conversations ... in order to manage the finances of the city and continue to provide core services that are our responsibility."

The city is earning less and paying more than expected in several departments.

Inflation is increasing costs for fuel and parts, which means maintaining the city's buildings and fleet of vehicles is more expensive.

Earnings from transit fares are short $13 million for what was budgeted, while people aren't buying as many pet licences and construction permits as predicted.

In recent years, city council has also increased spending on police, transit, snow clearing and infrastructure such as roads and recreation centres, areas Sohi says had been falling behind.

After draining the city's reserve fund below its mandated balance, council has to find ways to pay to fill it back up.

There's also the $90 million in accumulated taxes the province refuses to pay plus cuts to provincial infrastructure funding.

"They've cut our infrastructure grants by over two thirds," Ward Dene Coun. Aaron Paquette said. "That represents a massive chunk of our taxes ... that represents four-and-a-half per cent of the tax rate."

City staff has a plan to chip away at the increase for 2025, but at best, those moves will get it to just under nine per cent.

Councillors are urging restraint when budget talks begin in earnest this fall.