City of Edmonton proposes 8.1% tax hike in 2025 to cover higher costs

Edmonton property owners may face a tax increase of 8.1 per cent next year, the city's finance department said in a budget update Thursday.

A seven per cent hike was previously approved but the proposed increase is part of the city's fall budget adjustment to the original 2022-2026 budgets.

The finance team proposes another 7.3 per cent increase in 2026. City council had approved an increase of 6.3 per cent in the spring.

"We are experiencing a growing demand for our services and a growing need for new infrastructure," Stacey Padbury, the city's chief financial officer, said during a news conference Thursday.

Inflation and rapid population growth are making service delivery more expensive, Padbury said.

"While population growth adds to our revenues through property taxes, that growth doesn't fully cover the city's added costs," she said.

Edmonton property owners were asked to pay 8.9 per cent more in taxes this year but the municipal government forecasts a deficit of $34 million, based on financial results from the second quarter.

Under the proposed increases, homeowners would have to pay $828 in property taxes for every $100,000 of assessed value next year — up $62 from this year.

Ward Nakota Isga Coun. Andrew Knack is not surprised by the proposed tax hike needed to cover the estimated deficit, he said.

But he blames higher costs on population growth and the provincial government.

Statistics Canada data suggests the city of Edmonton's population grew by nearly 78,000 from 2021 to 2023.

"Two-thirds of our growth is happening in new neighbourhoods, which means new roads are being built, which means new roads need to be plowed and maintained," Knack said. 

"Then we have new parks and those parks … need to be maintained, and we have to build new fire halls and they need to be staffed."

The Alberta government, Knack noted, also does not pay taxes on property it owns in Edmonton. He suggests the city could maintain the seven per cent tax increase for next year if the provincial government paid taxes.

Mayor Amarjeet Sohi launched a campaign at the beginning of October that urged the provincial government to pay the $80 million it has withheld from the City of Edmonton since 2019.

The city's finance team will present its reports to council Nov. 13. Council will debate budget adjustments from Dec. 2 to 5, before voting on any changes.

Pressures demanding budget adjustments

The finance department adjusts the budgets every spring and fall, based on the current economic situation, external factors and legislative changes.

Encampments and extreme weather are areas the city needs more help with, Padbury said.

"While we plan for these pressures, they're much bigger than what we forecast when we developed the four-year budget in 2022," she said.

Internally, the city renewed collective agreements with unionized workers this year. Wages and salaries make up over 55 per cent of the operating budget. 

The City of Edmonton employs 13,327 people, which includes full time, part time, permanent and temporary staff.

This total doesn't include the Edmonton Public Library or Edmonton Police Service.

The city is also spending $1.4 million to cover maintenance costs for the Citadel Theatre lease agreement.

Edmonton must also prepare for the introduction of political parties in the 2025 civic election, as laid out in Alberta's Municipal Affairs Statutes Amendment Act — formerly Bill 20. 

The city's budget document earmarks $5.2 million for "Bill 20 Update and 2025 Edmonton Election Budget Adjustment."

The finance department also suggests adding $152 million to the city's capital budget, which is currently $10.8 billion.

The extra spending would be mostly for neighbourhood renewal projects and the Terwillegar Drive Expressway.