Why Edmonton is facing a 7% property tax hike
Madeline Smith | CBC News | Posted: November 23, 2023 2:00 PM | Last Updated: November 23, 2023
Decision to increase property taxes means more households will pay more
Property taxes and the cost of living in Edmonton are in the spotlight again as city council dives deep into next year's budget.
The city's current four-year budget calls for yearly property tax increases: about five per cent from 2023 to 2025, then a 4.4 per cent hike in 2026.
But those numbers can be changed during the annual budget adjustment process, which is what city council is now doing, with a 7.09 per cent tax rate hike on the table for 2024.
That's a bigger increase than Edmonton has seen in years: council held increases below three per cent for 2019 and 2020. Then, they kept property taxes flat for 2021 in the wake of the COVID-19 pandemic — the first zero per cent tax increase in more than 20 years.
Edmonton Police Service funding and salary increases mandated in an arbitration decision are new factors contributing to next year's proposed tax bump.
But city officials are also stressing that inflation and population growth are straining city services, and they need more funding.
Enid Slack, the director of the University of Toronto's Institute on Municipal Finance and Governance, said Edmonton isn't the only city feeling the squeeze.
"Inflation means that municipal costs are going up, but it also means that people are having trouble making ends meet, and they're turning to their municipalities for more services," she said.
Other cities are adding up their own specific costs, but larger property tax hikes are up for debate elsewhere too. Saskatoon is looking at a proposed 7.1 per cent bump, and Calgary approved a 7.8 per cent tax increase Wednesday.
In Edmonton, final decisions are still ahead. City council is set to vote on the budget adjustments by Nov. 29.
What does this mean for tax bills?
If a seven per cent tax increase gets approved, that doesn't necessarily mean the total on your 2024 property tax bill will be seven per cent higher.
A decision to increase property taxes means more Edmonton households will pay more. Although when it comes to how much, that depends.
The city assesses the value of your home each year. How that compares to the previous year, and the overall market, determines how much property tax you owe.
It's a complex calculation, but if your property value shoots up faster than the change across the city overall, you're looking at a higher tax increase, above the hike approved in the budget.
If your home's value goes up less than the rate of change across Edmonton, your property taxes also increase, but the number is lower.
You could even see your bill decrease if your assessed value drops enough — it all hinges on the numbers that come from the finalized tax rate and the assessment process.
The city sends out property assessments in January, and bills follow in May.
City funding stress
Adam Laughlin, deputy city manager of integrated infrastructure services, told city council Wednesday that when it comes to maintaining city assets, "we're underfunded. Point-blank."
He said there's been an effort in recent years to catch up on needed work. If that's neglected, Edmontonians will notice.
"What I will caution, and this happened in a previous budget cycle … potholes will hit a point where each of you will receive calls from residents related to too many potholes," he said.
"I predict that will happen in this budget cycle."
Ward Karhiio Coun. Keren Tang said she's skeptical about bringing the 2024 tax increase back to five per cent.
"I don't know if we can get down to that low," she said, noting other municipalities are having similar struggles.
"Everyone's trying to bring that back down to something much more reasonable. But I think in the current economic climate of inflation and migration patterns, I think we're just trying to stay above the water."
Slack said municipalities' limited revenue sources haven't changed much over more than a century. But they're dealing with more new expenses, from housing to the impact of climate change.
"We're going to see more and more need to raise property tax unless we change the system," she said.
She argues that responsibilities between federal, provincial and municipal governments needs a rethink.
"Because we have a system that's heavily reliant on property taxes to pay for services that are not really appropriately paid for out of a property tax."