Budget 2024

This year’s budget is what we refer to as a supplemental budget adjustment. In December 2022, Council approved a 4-year Capital, Operating, and Utility Budget. The deliberations for the 4-year budget are more detailed and in advance of reading through this post, I encourage you to take the time to read through my 2023 budget blog series.

Pre-Budget Blogs

Part 1: 10 Things You Need To Know

Part 2: Introduction to the 4-Year Cycle

Part 3: Budget Impacts on Ward Nakota Isga

Budget 2023-2026 Final Update

Part 1: Property Tax Changes Over the Years

Part 2: How I Voted on the Budget

Part 3: Common Themes from Edmontonians

Please take some time to review all 6 parts as they provide important historical context, information about different projects approved, analysis of a number of projects that were debated in the Capital and Operating Budgets, and an explanation as to why I voted against the Operating Budget and in favour of the Capital and Utility Budgets.

I also hosted a budget virtual Community Conversation in November on my Facebook page to provide more information before we started budget deliberations.

I don’t share the point that I voted against the Operating Budget last year to try and appear better than those that did or to score political points. I share that information because as someone who voted against the Operating Budget increase last year that set out the following tax increases: 2023: 4.96%, 2024: 4.96%, 2025: 4.95%, 2026: 4.39% you might be surprised to see that I voted in favour of this year’s Operating Budget. The increase of 6.6% was approved in a 12-1 vote by City Council. That means the average single family home, which is valued at $425,000, will see a municipal property tax increase of approximately $196 for the year. This post will detail why I made this decision as I did not make that decision lightly.

With the adjustments made during budget deliberations, the actual cost per day goes down from $8.74/day to $8.71/day.

Contrary to popular belief, the decision to support a tax increase is never an easy one. After 10 years, I’ve still never met any elected representative who wants to raise taxes. The reason why is that every person knows that anytime someone has to pay more for anything, it has a real impact on the lives of the people we serve. On top of that, costs are going up in many different areas and so it’s the cumulative impact of all of those costs increases that are making it harder on people.

Those same cost increases are being felt by municipalities across the country. These increases are amplified by our response to the pandemic. While I won’t repeat the majority of what I wrote in the previous blogs, I need to highlight this point:

“For the 2019-2022 budget cycle, the property tax increases (and freeze in 2021) were the lowest increases in 25 years. At the time, the 2019 increase was the lowest increase in a decade (2.6%). In 2020, the increase (1.3%) was the lowest increase in 23 years. In 2021, the tax freeze (0%) was the first time that occurred in 24 years (0%). Finally for 2022, we had the third lowest increase in 25 years (1.9%). These were all below the rate of inflation.”

I want to share this again because based on some emails and calls I have received, I believe there are some who believe that taxes have gone up above the rate of inflation every year and that we don’t work to find savings every year. But that is not the case and the numbers above show how much effort was put into keeping costs down throughout the peak of the pandemic.

I won’t detail every previous cost savings motion that has been implemented but I’ll highlight the one I get asked about the most: middle management. A few years ago, I made a motion to reduce middle management and so that work has already been happening to reduce the overall costs. If you are interested in some of the other work I have done to find savings, you can read past blogs like this one from 2018 to help inform the 2019-2022 budget.

It’s important to note that when we made the decision to keep those increases below the rate of inflation from 2019-2022, we did it knowing full well that it meant we wouldn’t be keeping up with the growth of our city or the inflationary cost increases that our city and every household faces.

I’d like to specifically focus on the point about growth as I think it’s an area we don’t discuss enough. From July 1, 2021 to June 30th, 2023, the population in the City of Edmonton increased by approximately 70,000. That’s a 7% increase in just 2 years. That’s on top of the 70,000 people that moved in from 2016 to 2021. Putting that into perspective, if a new city of 70,000 people were to form in Alberta tomorrow, that would make it the 6th largest city in Alberta.

Although we are working to shift how we grow as a city, our current growth patterns still result in approximately 65% of all new Edmontonians moving into new communities. While roads, utilities, and fire halls are covered by the developer of a new community (in most cases), the costs for new police stations, recreation centres, libraries, parks, etc. are paid for through our property taxes. Unfortunately, the property taxes we get from new residential developments do not cover the cost of all the new infrastructure. On top of that, we also have to pay the operating costs (ex: staffing, utilities, etc.) for that infrastructure as well as the operating costs for the infrastructure paid for by the developers (ex: snow removal, staffing for the fire halls, etc.).

The growth of our city is not likely to stop anytime soon. The population increase referenced above is expected to continue because things like the Alberta is Calling campaign have been working. That will continue to create cost pressures. In a future post, I will detail some of the changes that need to be made to how the provincial government funds municipalities as the cuts that all municipalities have been facing over the last decade have made it harder to keep up with that growth. Alberta Municipalities, which represents where over 85% of Albertans live: summer villages, villages, cities, towns, and specialized municipalities, has put together a detailed report on this issue.

As a quick summary, since 2011, municipalities in Alberta have seen provincial infrastructure funding to municipalities drop by 64% even though the populations of many municipalities have been increasing at a very high rate.

Source: Alberta Municipalities

Municipalities are facing an approximately $30 billion infrastructure deficit at a time where we are running provincial surpluses. The lack of adequate infrastructure funding is causing municipalities across the province to face similar budget challenges.

To the south of us, Calgary approved a 7.8% tax increase and Airdrie approved a 6.99% increase. Closer to home, St. Albert approved a 5.5% increase, Spruce Grove approved a 5.12% increase, Devon approved a 5.25% increase, and Wetaskiwin approved a 5.5% increase. Beaumont is proposing a 6.49% increase, Leduc is proposing a 5.5% increase, and Stony Plain is proposing a 9.76% tax increase. Those numbers are looking to be fairly consistent across most of the province. For many municipalities to be facing similar cost pressures, we have to acknowledge the reality that continued underfunding from the provincial government, especially when they have a large surplus, puts an unfair strain on the people we serve.

So when I look at this specific budget adjustment, which changes the proposed tax increase from 4.96% to 6.6%, I supported the additional 1.6% based on the changes that have been made over the past year to serve the existing and rapidly growing population. That additional 1.6% includes 0.8% to deal with the amount identified for the new police funding formula and arbitrated salary settlement for Edmonton Police Service. You can learn more about the funding formula in this blog post. This will allow them to hire additional officers at a time where many residents are raising concerns about safety and security in Edmonton.

The 1.6% increase includes approximately 0.1% to fund an increased response for encampments in our city. As many of you know, housing, shelter operations, and mental health/addictions are provincial jurisdiction. While we will continue to advocate to the provincial government for more permanent solutions (ex: recovery centres, supportive housing, 24/7 shelter spaces across the city, etc.), responding to encampments to ensure the safety and security of everyone is critical. Unfortunately we’ve seen loss of life in encampments due to fires and community members want to help but it’s best to have our Park Rangers in partnership with social services respond to those encampments to connect people experiencing homelessness to proper resources.

The final area I will highlight is an approximately 0.3% increase to fund increasing bus service. Although there were increases in On Demand and off-peak bus service last year, there hasn’t been a meaningful increase to our main bus service since 2015. Considering the physical growth of our city as well as the population increase, we need to start increasing our bus service. Edmonton was one of the first cities in North America to see a return to pre-pandemic bus ridership levels and we are now seeing even more ridership than ever before on our buses.

This funding has the potential to shift popular On Demand routes (ex: Communities of Big Lake) to standard service because even with the increase in funding for On Demand, I am still hearing from residents about long wait times for the On Demand service in the area. This could open up the opportunity for a more frequent service between Jasper Place Transit Centre and Meadowlark Mall which has been a major point of concern for residents. How this new funding will be deployed is to be determined but I will be raising these examples and a few more for enhanced bus service in the west end.

Earlier in this post, I shared some examples of cost savings that have been found over the years. Last year, a motion was made, that is referred to as OP12, which tasked our City Administration to find up to $240 million in savings to allow for a reallocation to other priorities. 

This work has been much slower than I would have expected. Even if we include the increased EPCOR dividend and we take a cumulative definition of how cost savings would be calculated, it looks like we have found a total of just over $33 million of the $240 million target that we set. In order to achieve that $240 million target, we would need to find $100 million by the end of 2024 to achieve our goal. I’m not sure that’s achievable based on where we are now but I’m committed to working with my colleagues and City Administration to try and achieve this goal.

I realize that the words here will not make the $196 increase any easier. It doesn’t matter that municipal taxes only account for around 2% of a household’s annual expenses. An additional $196 increase for the year when your other costs are going up is hard and it will force all of us to continue to make tough choices about our personal budgets.

I believe the services referenced above that make up the additional 1.6% increase are important and will provide a tangible benefit to people’s quality of life. I hope that by detailing these additional pressures, that there is a better understanding as to why I supported this supplemental operating budget adjustment. If you have any questions or feedback on this budget, please share those in the comments below.