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Budget Wrap Up

Updated: Dec 23, 2022

About a month ago, I wrote that the proposed City budget for 2023 to 2026 would not provide an adequate return on investment for Edmontonians. I laid out five priorities at that time to get the budget on track: affordable housing, climate action, maintaining city services, improving service delivery, and smart planning.



After a long deliberation and amendment process, I am happy to report that Council has passed a budget that delivers on those key issues. From 2023 to 2026, we will begin Edmonton’s pivot to fiscal sustainability by making investments in key priorities while exercising restraint in other areas.


In tight financial times, we need to make sure that every dollar counts. This budget isn’t perfect, but overall it delivers a good return on investment for Edmontonians and sets us up for success in future years.


While it's far from an exhaustive list, this blog covers some of the key investments we're making into our communities to build an Edmonton for all of us.



Affordable Housing

It is absolutely critical that we continue our leadership on affordable housing. Edmonton is facing a housing and homelessness crisis that will only get worse without action. We need to work with other governments, make the most out of every dollar, and ensure that every Edmontonian has a home. This is the ethical thing to do and an economic imperative.


During budget deliberations, Council approved:

  • $74.8 million to fund grants to non-profit housing providers, launch an Indigenous-led affordable housing program, and increase investments in homelessness prevention programs.

  • $26.4 million to offset property taxes on affordable housing providers.

  • $22.9 million in 2023 for site acquisition and affordable housing development. We will work over 2023 to allocate funds for future years, with another $75 million to be approved for 2024-2026.


These funds will allow the City to leverage provincial and federal housing programs. We shouldn’t go it alone, but we can make strategic investments to ensure the greatest benefit for Edmonton.


We have more work to do to ensure we maintain our funding over all four years, but this budget gets us off to a great start. Reducing houselessness, creating safer communities, attracting more investment to business districts and reducing strain on police, health and justice systems.


In addition, $14.8 million was allocated to public washrooms to support public health, hygiene, and basic dignity for all. $1.5 million was also invested in our municipal drug response to support community safety and wellbeing.



Climate Action

The City's Carbon Budget makes it clear that we are not on track to meet our emissions reduction targets. The proposed Capital and Operating budgets had limited investments in climate action and would do little to shift course, but after Council deliberations and amendments, we are now taking climate action seriously. The final budget now includes:

  • $53 million for energy retrofits of City facilities undergoing renewal

  • $34.5 million for district energy

  • $32.4 million for tree planting

  • $11.2 million for emissions-neutral City vehicles and equipment

  • $21.5 million for energy transition programs and grants, including administering the full implementation of the Clean Energy Improvement Program (CEIP) and continuing the Solar Rebate Program and HERA for 2023

  • $5.5 million for climate adaptation programs

  • Investment in low-emissions transportation to enable mode-shift (see below)

Critically, this budget will enable us to set up a full Clean Energy Improvement Program, which will provide a new way for households to finance money-saving energy efficiency improvements ($20 to $80 million per year starting in 2024).


These investments, combined with investments in public and active transportation (below), will make life more affordable for households dealing with rising energy prices, while creating green jobs and transitioning us to a low carbon city. Investing in climate action supports our economy and the environment.


Many of these projects use smart debt, which will allow us to make critical climate investments now so we can do our part to avoid the worst impacts of climate change. We have lots of work to do and I look forward to continuing to work with my Council colleagues and all orders of government on meaningful climate action.



Transportation Options

Directly related to climate action, equity, and economic competitiveness, the City is making strategic investments in public and active modes that will open the door to more affordable, low-carbon transportation options.

  • $316 million to build a new transit garage, which will leverage federal funding and allow us to grow conventional bus service

  • $100 million for bike network implementation

  • $16.7 million operating increase to continue and expand on-demand and off-peak transit service which has become an important service relied upon by many Edmontonians, including folks in Avonmore, Bonnie Doon, King Edward Park, and Cloverdale

  • $13.6 million for missing and enhanced sidewalk connections to increase walkability

  • $13.5 million for transit safety

  • $7.1 million for design and installation of transit priority measures, which is a quick and cost-effective way to increase the performance of our existing bus system.

  • $5.5 million for Bus Rapid Transit planning and design, including routes down 97 Street and 82 Avenue


Not mentioned in this list is over $1.8 billion in investments related to roadway renewal and growth between 2023-2026.



Also related to transportation and mobility is snow and ice control, no matter how you choose to get around. To meet the needs of Edmontonians, we authorized an $11 million increase phased in from 2023 to 2026.


This is the most significant ongoing increase for this service in many years, although it will not reach as high as the one-time funding allocated for 2022, which would have led to an additional 2% tax increase.



Economic Development

A broad array of projects were supported throughout the budget that will aid in our economic recovery, support businesses, and strengthen downtown, including:

  • $277M into transformational land development projects, like Exhibition Lands, Blatchford, industrial-commercial lands, and mixed-use lands

  • $20M for Downtown Vibrancy

  • $11M for Arts and Culture, including supports for festivals

  • $10M for Chinatown improvements

  • $7M for the Corner Stores Program

  • $5M for the Edge Fund to bring local businesses to global markets

  • Climate action investments mentioned above


These investments will support jobs, grow our tax base, improve efficiency, and increase local spending.


As we work towards recovery, as a municipality, we also need to focus on strengths like land-use, as well as play a role activating and enabling businesses. As I outlined in my previous blog, we need to continue moving towards a more dense, infrastructure efficient city.


This budget takes important steps in that direction by funding the implementation of the City Plan, and I can’t wait to keep working on this for years to come.



Exhibition Lands and The Coliseum

There is one major issue I did not mention in my pre-budget blog. Here in Ward Métis, folks have been waiting for redevelopment of Exhibition Lands and the Coliseum site for years.



I committed to pushing hard to accelerate the redevelopment of Exhibition Lands and am proud of what has been approved. In this budget, we secured:

  • $53.1 million to move forward with redevelopment, including site preparation, planning, design, engineering, utilities, and sub-surface work to prepare the southern portion of the Exhibition Lands site for sales ($9.1M for demolition of existing Northlands structures, $7.6M for planning, design, engineering and monitoring, $33M for construction, and $3.4M for closeout and post-development activities)

  • $35 million for the Coliseum demolition


The Coliseum has been an iconic presence in our city. It has hosted many wonderful moments for Edmontonians, from hockey to concerts to rodeos and much more. This is a place where we have come together and where we have been proud to be Edmontonians.


However, it needs to go. The Coliseum is permanently closed, without a real hope of repurposing.


What once was a point of pride for the surrounding neighbourhoods is now becoming a blight, and what once was a special gathering place for the whole city is now increasingly expensive to taxpayers.


The longer the Coliseum stands, the longer it will sit empty, hampering redevelopment of the site and costing taxpayers $1.5 million per year to maintain, while the cost of demolition grows. The most cost effective, and fiscally responsible decision is to stop the bleeding as quickly as possible. I’m proud that this council is taking responsibility for this and moving forward with demolition so that the vision for Exhibition Lands - a mixed-use, transit-oriented, complete community where folks can live, work, and play - can be realized.



Addressing Artificially Low Tax Rates

We all want to see value for our tax dollars, just as we want to see our values reflected in our city. Affordability, not austerity, is what will make life better for all Edmontonians. Investing in city services that Edmontonians rely on and expect is important to overall affordability and quality of life, and for attracting and retaining talent to our city.


This budget shows fiscal restraint while investing in key priorities and core services. Council made a series of cuts to proposed spending in non-core services, allowing us to deliver funding where needed and keep the average tax increase to 4.96% in 2023.


We weren’t going to be able to maintain the low tax rates of the past few years – inflation and temporary cost saving measures were going to catch up with us eventually. Continuing to maintain artificially low tax rates is a recipe for service decline, poor maintenance, and frustration, and judging from the thousands of conversations I have had over the last two years, I don’t think that’s what Edmontonians want.


We are still delivering a tax increase mostly in line with comparable Canadian cities after having the lowest tax increases among our peers in 2022 and a 0% tax increase in 2021. Meanwhile, the City will continue to offer the core services that Edmontonians rely on.


One area where we need further work is funding for infrastructure renewal. We are continuing to under-invest in renewal, and I will work with my colleagues throughout the Council term to identify solutions to get on the right track.



Thank You

The decisions made around the Council table have a direct impact on the lives of Edmontonians who call this city home, and they have a direct impact on future Edmontonians who aren’t even born yet. Many of our decisions span across generations and we need to be thinking years into the future about the kind of city that we want to build and the kind of city that we want to leave behind.


At the same time, there are fundamental, urgent, pressing needs in our communities that demand action and attention today. There are core services that Edmontonians expect to see delivered on a daily basis so that they can get to work, get to school, safely move around their city in ways that work for them, and enjoy a good quality of life.


We will never achieve perfection, but this budget represents the collective hard work of each and every member of City Council. I would like to publicly reiterate my appreciation to all of my colleagues for shaping the budget, and also thank City staff and Edmontonians for their participation in this critical city-building process.


I look forward to the work ahead.


 

FAQs

Q: Why a 4.96% tax increase?

We weren’t going to be able to maintain the low tax rates of the past few years – inflation and temporary cost saving measures were going to catch up with us eventually. Just as households are experiencing spending power reductions, so is the municipality. The difference between our tax levy and inflation has been 10.8%. A five year gap of 10.8% can not be filled without increases to revenue. This differential represents significant losses in our ability to deliver service.


If we do not respond to the inflation we have already experienced, and react to inflation forecasts, the City of Edmonton will have placed itself in a dire fiscal position. This four year budget responds to these financial pressures. I ran on responsible fiscal policy, maintaining the low rate increases of the last 5 years will severely impact service delivery. Within 2 years, we’d be looking at a 1/6th reduction in our spending power.


Continuing to maintain artificially low tax rates is a recipe for service decline, poor maintenance, and frustration, and I don’t think that’s what Edmontonians want. We are still delivering a tax increase mostly in line with comparable Canadian cities after having the lowest tax increases among our peers in 2022 and a 0% tax increase in 2021. Meanwhile, the City will continue to offer the core services that Edmontonians rely on.


Q: How will a 4.96% tax increase affect me as a homeowner?

Edmonton is increasing property taxes by 4.96% in 2023. For every $100,000 of assessed value on a residential property this represents an increase of about $34 in taxes per year, or $2.80 per month. It is important to keep in mind that the largest variable under the property tax system is often the shifting of assessed values – only the home that sees the average assessment change will see the exact 4.96% increase.


Q: How much will bike lanes cost me?

Active transportation is not a main driver of the approved tax increase. In 2023, homeowners will pay $0.33 per $100,000 assessed value towards the cost of the newly-approved bike network. For an average $400,000 home, that is $1.32 for the whole year. Even in a budget cycle that will see us implement about half of an entire city-wide bike network, this investment only makes up 1.27% of the entire $7.8 billion capital budget. For context, the 50th street overpass, a relatively small project, costs $179M. The Lewis Farms Recreation Centre is $311M.


Cycling is popular in many winter cities, such as Montreal and Oulu, Finland. It is getting more popular in Alberta, too. Many of us love outdoor winter activities like skiing and skating. When it comes to winter cycling, safety and convenience are critical. Our goal with bike infrastructure is to deliver a connected network that gets people to where they need to go safely, whether in the summer or winter.


Q: Why not invest in housing instead of bike lanes?

Housing and climate action (including bike lanes) are both key priorities for City Council, and this budget invests in both while also leveraging as many funding sources as possible from other orders of government.


Bicycling is a very low cost form of transportation. Through this budget Edmonton is investing in your ability to access safe active transportation infrastructure. If a household can substitute just a handful of kilometres a year away from a personal automobile, or avoid two transit fares, they are in the black. For hundreds of thousands of Edmontonians, this investment will unlock incredible savings opportunities.


In addition, investing in low cost transportation options (active and public transit) that are not reliant on private automobiles can increase affordability, leaving more funds for housing needs.


Funding sources should also be discussed when considering trade-offs between different budget items. Bike network implementation will be funded with tax-supported debt, which is not an available funding source for our affordable housing investments.


Q: Can we repurpose the Coliseum instead of demolishing?

At this point, I believe that the City has done its due diligence in exploring repurposing opportunities.


The condition and nature of the building would also make repurposing difficult. Major work would need to be done in order for the building at this point to be fit for storage, let alone any business, non-profit or shelter space.


Rogers Place was approved by Council in May of 2013. By the time Coliseum demolition is slated to occur in 2026, 13 years will have passed during which repurposing has been considered. It is time to move forward.


Q: Why are some parking fees increasing?

Property tax is the largest source of City revenue, but it is important to maintain a balance with user fees. Over the last 20 years, transit fares have increased 75%. Parking fees have stayed virtually stagnant over the past 20 years while property taxes have gone up, leading to a greater and greater subsidization of public parking by all taxpayers.


The parking fee increases in this budget don’t match the previous increases for transit and property tax, but they do partially catch up.


Q: Why was funding not approved for the Edmonton Metropolitan Transit Commission?

I’ve heard from many folks who were disappointed in this move. I believe in regional transit, but I did not believe that this commission was positioned to deliver on the promise of efficient, integrated service. About 40% of our funding would have gone towards overhead and administration costs, not transit service. This led to a difficult vote to withdraw from the Edmonton Metropolitan Transit Services Commission. When we are already asking more of taxpayers, that wasn’t a justifiable investment in my view.


Regional transit exists in the Edmonton region, and will continue to grow and improve in future years. What has not been funded was a commission model. Over the last few years there has been an investment into the development of this model, but as a financial steward it is essential that we adjust and adapt to changing conditions. Bilateral agreements between municipalities still exist and connectivity between the region continues to be enhanced through the introduction the ARC card.


 

Key Documents

Here are the key documents to help explain the budget. Some are incredibly long and the search function (ctrl+f / cmd+f) is recommended to find key words you might be looking for.


Proposed Capital Budget 2022 - This was the proposed capital budget put forward by City staff to Council.


Questions on the Proposed Capital Budget 2022 by Councillors - These were the written questions Councillors asked about the capital budget to City staff.


Amendments to the proposed capital budget - This was the outcome of Council deliberations on the capital budget. You can see who brought forward what amendments, details on the amendments, the outcome, and which Councillors voted for/against which amendments.

Councillors who might have voted against the main budget motion still voted for increases and decreases to the passed budget.


Proposed Operating Budget 2022 - This was the proposed operating budget put forward by City staff to Council.


Questions on the Proposed Operating Budget 2022 by Councillors - These were the written questions Councillors asked about the operating budget.


Amendments to the proposed operating budget - This was the outcome of Council deliberations on the operating budget. You can see who brought forward what amendments, details on the amendments, the outcome, and which Councillors voted for/against which amendments.


**Councillors who might have voted against the main budget motion still voted for increases and decreases to the passed budget.


Proposed Carbon Budget 2022 - Based on the projects and priorities of the proposed operating and capital budgets, this is how Edmonton would have done against its climate goals.


Questions on the Proposed Carbon Budget 2022 by Councillors - These were the written questions councillors asked about the carbon budget to administration.





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