Edmonton’s mayor says he plans to minimize property tax increases as city council begins to examine ways to address a capital and operating funding shortfall of $88 million.

On Wednesday, city administration presented a 159-page report assessing the fiscal gap and the revenue-raising capacity for those expenditures described as persistently falling short.

City administration warned that if the shortfall is not addressed it could result in the erosion of services, the deficiency of infrastructure, and outsized tax increases.

Mayor Amarjeet Sohi said property tax increases are already unsustainable and floated other options.

“I believe we can do it,” Sohi later told reporters. “We can continue to invest in core services at the same time minimize property tax increases. That is my goal going into the budget.”

The mayor instead recommended exploring revenue-raising options such as raising developer levies and Epcor’s dividend, provincial grant funding for service-hub cities and collaboration with developers and the private sector to reduce infrastructure costs.

The report outlines multiple factors contributing to the deficit including insufficient growth of non-tax revenue and fees for transit and recreation services falling far behind inflation.

Sohi ruled out revamping user-fees.

“We need to make sure that our services are accessible,” Sohi said. “We need to make sure we are providing equitable access to low income and middle income families, not just to those who can afford to pay the full fee.”

Population growth

According to administration, population growth is one of the biggest drivers draining city coffers. The report describes Edmonton as the fastest growing large city in Canada since the turn of the century.

Other factors, the report said, include the persistence of high inflation and social service spending post-pandemic. It outlined tens of millions of dollars in expenditures to address gaps in service at the provincial and federal level.

Examples included funding social workers at Edmonton libraries, encampment cleanup and responding to drug-related incidents by dispatching Edmonton Fire Rescue Services, peace officers and security guards.

Administrators also flagged the regional demand for city services such as police and roads to which Sohi encouraged the province to provide a financial top-up for service-hub cities.

Public-private partnerships 

Jim Brown, a developer and the only registered speaker, advocated for lower taxes and transit fees, as well as reigning the regional sprawl cutting into Edmonton’s non-residential tax base.

He also described successful public-private partnerships in Alberta and Pittsburgh as a cost-cutting way to build amenities and infrastructure, which drew multiple questions from councillors.

“Any way that we can actually reduce our output for capital costs and even operating costs in partnership with corporations and businesses who think that they can help provide these services, that makes a lot of sense as long as we don’t relinquish control as a municipality,” Coun. Aaron Paquette said during recess.

Paquette added that any concerns around private profit would have to be examined.

“Maybe their profit is fine as long as it doesn’t ever cost us more than what we would do on our own, and in fact it should cost us less. Otherwise, what’s the point of the agreement?”