Brandon budget proposes 11.7% tax increase in 2025

Property owners in Manitoba's second-biggest city may face a double-digit tax increase for the second year in a row.

The City of Brandon's proposed budget for 2025 includes an 11.7 per cent increase in property taxes, according to a news release from the city. Mayor Jeff Fawcett says a double digit raise is needed after years of minimal tax increases left the city's coffers low.

"This is the council that's going to bite the bullet," Fawcett said. "It's going to do the things that need to get done so that the future councils going forward and the residents of the city are in a stable, sustainable community."

In 2023, municipal taxes went up 1.6 per cent, while the inflation rate was 6.2 per cent. The city began to play catch-up on rates in 2024 with a hike of 9.4 per cent. Double-digit tax increases are expected in the city of 54,000 until at least 2028, Fawcett said.

Brandon University political scientist Kelly Saunders says the timing of the increase is unfortunate given many people are struggling financially. 

"Issues of affordability, the housing crisis, the cost of food, everything, you know … I think this is really going to hurt, you know, people in this city quite significantly," Saunders said.

"This increase, it's really going to harm a lot of families ... that's really unfortunate."

A second year of high tax increases could have Brandonites questioning how the city is spending public funds, she says. The tax hike speaks to the lack of forward-thinking from past councils putting off increases leaving current leadership in a tough position financially.

"The more you defer major projects or major problems ... it's just going to cost you more down the road economically, socially, politically," Saunders said.

"That's why we're in the mess that we're in right now. But hopefully, administrations moving forward will learn that lesson."

The proposed combined general and utility budgets are $153.4 million. The proposed capital plan is $151.6 million.

Brandon City Council will debate the proposed 2025 budget on Jan. 24 and 25.

Years of catch-up

In December 2023, a city-commissioned report by accounting firm MNP found Brandon's tax rate was 47 per cent lower than comparable Canadian cities. That meant the city was not bringing in enough revenue to cover its costs.

The report warned significant tax increases would be needed for years presenting two options: a 13 per cent tax increase every year from 2024-27, followed by three per cent increases each year from 2028-33; or a tax hike of nine per cent per year for the next 10 years.

If everything goes to plan, high tax increases should be a thing of the past by 2028, and future taxes should hover between three and five per cent, Fawcett says.

The city needs high taxes now to fund some major infrastructure work, which in turn Fawcett hopes will help the general economy and population growth.

"It's going to be really important.... the more we can increase, the more taxes are going to be able to go down," Fawcett said.

Major projects from the proposed capital budget include $30.7 million for wastewater infrastructure, $28.5 million for the water treatment facility expansion, $18.9 million for land drainage improvements, $13.2 million for street and sidewalk upgrades and $6.1 million for upgrades for the Brandon's Community Sportsplex ice arena.

These projects include commercial and industrial developments, Fawcett said.

The Brandon Chamber of Commerce welcomes said investments for economic growth through different capital infrastructure will let businesses to grow in Brandon, said president Lois Ruston. But businesses are feeling the pinch of increased taxes, development costs and utilities in the city. 

Ruston says she appreciates the city's new four-year budget, introduced in 2024, because it lets businesses better plan for potential tax hikes.

"We really see that as a way to grow our tax base and to grow the business community and of course our community as a whole," she said.

"We'll continue to encourage and advocate those strategic investments that will support economic growth."