Edmonton budget shortfall risks bigger property tax hike in 2025, city warns

City officials are warning that without a plan to address next year's financial shortfalls, Edmonton's 2025 property tax increase could be almost double the hike already on the books.

City chief financial officer Stacey Padbury told council's executive committee Monday that Edmonton faces a budget gap of $88 million. Inflation, revenue shortfalls and money for new city initiatives are all running up the total.

The city also has to put money into its financial stabilization reserve next year in order to start bringing it back within the minimum required balance.

But covering the whole amount with tax revenue would mean a 13 per cent property tax increase, "which we know is too high," Padbury said.

The city's four-year budget calls for a seven per cent tax increase in 2025.

Padbury said city staff don't want to bring a double-digit number to council when budget adjustment talks begin this fall, and they have plans in place to address funding shortfalls identified across city services. But some things on the list of issues — like a transit fare revenue gap of nearly $13 million, and an expected $6.2 million in firefighter overtime costs — are complicated, and could take years to address.

In 2022, council directed city administration to find $60 million a year in savings or cuts, as long as the reductions don't affect core services.

"I think we have now come to the realization that is almost impossible," Padbury said.

"We cannot solve our problems if we don't have an honest conversation about what services we deliver and at what level we deliver them."

A city report says without additional funding to cover inflation to fuel and fleet maintenance costs, snow and ice clearing will be slower, spring sweeping will be delayed and bus service will be slower.

Most of the specific financial impacts the city is facing are also detailed in that report. But about $16.5 million of the $88 million total is only accounted for in a document that's been held confidential.

Of that money, $13.2 million is listed as an "administration or council directed" initiative, and $3.2 million comes from "external factors."

After a year when council approved a property tax increase just shy of nine per cent — up from the 6.6 per cent bump originally in the 2024 budget — Edmontonians are "tapped out," according to Mayor Amarjeet Sohi.

"I don't think there's any more tolerance for any additional increases to what we have already approved," he said.