The City of Edmonton is recommending a tax increase in the pre-budget

The City of Edmonton is recommending an 8.1 per cent tax increase by 2025 in its draft budget to address the shortcomings facing the city council.

With the costs of inflation and population growth, it becomes more expensive to provide the same services, the city said in a news release Thursday.

City staff expects a $34 million deficit this year.

“While we anticipated these pressures, they are far greater than predicted when we developed the four-year budget in 2022,” Stacey Padbury, chief financial officer and deputy city manager, said in a news release.

Padbury says paying for services that are outside the budget is unsustainable.

“Like many Edmontonians who continue to face high costs, we are having to make some tough choices about the money we take in and what we spend it on.”

The approved seven percent tax increase was implemented in April to address budget problems.

The draft report says the additional one percent increase would help replenish the financial stabilization reserve. This reserve is used to absorb pressure on the budget, such as budget deficits. The remaining 0.1 percent increase would help fund the 2025 elections.

City staff is also exploring ways to reduce the increases by proposing $8.5 million in ongoing cuts. The savings would come from cuts to the city’s phone contracts and slowing down the Heritage program.

“The challenges we face are complex and will take several years to master, but we can make meaningful progress with these recommendations,” Padbury said.

The 2023-2026 city operating budget funds 70 services and more than 200 construction projects in Edmonton.

There will also be proposed changes to the capital budget. The city is recommending a $152 million increase for its capital plans, primarily for neighborhood renewal projects and the Terwillegar Drive Expressway.

The reports will be presented to Edmonton City Council on Nov. 13. Budget adjustments will be made between December 2 and 5.