'Gruelling' budget process ends with tax increase of 4.96% in 2023

City council has approved Edmonton's 2023-2026 budgets, which will result in property tax increases of just under 5% in each of the next four years.

The $7.9-billion capital budget passed 9-4, with councillors Tim Cartmell, Sarah Hamilton, Karen Principe, and Jennifer Rice opposed. The operating budget, with expenditures of nearly $3.3 billion in 2023, $3.3 billion in 2024, $3.5 billion in 2025, and $3.6 billion in 2026, passed 8-5, with the same councillors opposed as well as Coun. Andrew Knack.

The resulting tax increases have been set at 4.96% in 2023, 4.96% in 2024, 4.95% in 2025, and 4.39% in 2026. Council will have the opportunity to make budget adjustments every fall, which could alter those numbers slightly.

"My focus during this budget has been affordability, not austerity," Mayor Amarjeet Sohi said in his closing remarks. "All of us have a responsibility to own it. I will support this budget, because I am proud of the collaboration we fostered."

Despite that collaboration, several councillors commented on how difficult the past few weeks have been. "This budget process has been absolutely gruelling and exhausting," said Coun. Michael Janz. "A rollercoaster like no other."

Coun. Jennifer Rice indicated she could not support a tax increase above 4%. "The outcome and the process fell short of what I believe Edmontonians told us they expected of council," she said.

Coun. Keren Tang also used her closing remarks to address the process, suggesting that council was "drowning in information" and might need a different approach. She wondered aloud if there might be a more iterative and responsive budget process used in the future.

City council approved about $223 million in adjustments to the capital budget, including the approval of $100 million for the Edmonton Bike Plan, a decision that will likely remain controversial for years to come. Other big-ticket items included $53 million for deep energy retrofits of City of Edmonton facilities, $35 million for the demolition of the Coliseum, and $34.5 million for a district energy network strategy.

On the operating budget, council asked for a "city-wide, comprehensive corporate review of all programs and services" with a goal of reducing expenses by $60 million over the four-year budget cycle. Additionally, council asked administration to identify "an additional minimum $240 million that city council can transition to its directed priority areas of housing, climate change, public transit, and core services."

Other operating approvals included the $5-million Edmonton Edge Fund, nearly $8 million per year for on-demand transit, nearly $11 million more over the four-year budget cycle for enhanced snow and ice control, a one-time increase of $5 million for Explore Edmonton, $2 million to partially fund the climate adaptation strategy, and $1.5 million for a municipal drug response.

The closest votes were 7-6 in favour of reducing capital funding for the Edmonton Valley Zoo by $24.5 million, and 7-6 in favour of boosting operating funding for animal welfare by about $3.3 million. Motions to increase funding for transit cleaning, decrease funding for a program focused on diversity and inclusion at the City of Edmonton, and increase operating funding for the Fort Edmonton Park expansion were all defeated 6-7.

Council also considered more than two dozen subsequent motions for things arising from the deliberations.

"Will more good be done for the people of Edmonton in this budget than there is to disagree with?" Coun. Aaron Paquette said in his closing remarks. "And the answer is obviously yes, there's no debating that."

The 'death of regionalism'

A motion put forward by Coun. Andrew Knack to approve about $13 million for the first phase of the Edmonton Metropolitan Transit Service Commission's service plan was defeated 5-8. It was a surprising decision, given that council had just agreed in September to endorse the plan.

"I'm afraid that with our decision to leave the transit commission, we have set a dangerous precedent that Edmonton will be proceeding alone, and that our policy going forward will be an isolationist one," said Coun. Sarah Hamilton, who called it "the death of regionalism."

Knack said that specific decision weighed heavily on him, too. "I am really concerned about what that decision means for the entire region."

Coun. Tim Cartmell was more blunt. "Make no mistake: trust is lost," he said. "We have lost the trust of the collective communities around us … it's a dangerous game."

Last year, outgoing mayor Don Iveson said his successor should prioritize regional diplomacy. He had made region-building a priority and felt significant progress had been made under his leadership.

Mayor Sohi has not been as vocal a proponent of the region, though he pushed back on colleagues who lamented the transit commission decision.

"I want to take exception to the notion that us pulling from the regional commission is going to damage our relationships," Sohi said. He said Edmonton has always supported the idea of a regional transit system and will continue to do so.

"What I reject is a bloated, bureaucratic, parallel system that would replace a very well-run, efficient system in ETS," he said.

Tension between councillors

Several councillors found themselves defending their decision to vote against the budget.

Coun. Karen Principe said she would vote against both budgets because she didn't receive support from her colleagues.

"The amendments I put forward, nothing passed," she said. "There is no reason for me to support."

Paquette used his closing remarks to call out councillors who chose to vote against the budgets.

"For people who care about what's in this budget and want to see it go forward and then vote no, are relying on the goodwill of everyone else to pass the budget that they are voting no on," he said. "Let that sink in."

Cartmell indicated he tried to consider the merit of each item. "Every vote I made, I made in the moment," he said.

Hamilton agreed. "I came to every item on this budget with an open mind and genuine willingness to see investment in every corner of our city," she said.

Rice indicated she didn't see enough for her constituents in the budget, something Janz seemed to respond to directly in his closing remarks. "Maybe we need some governance orientation in the new year," he said, noting the decisions made by council affect the entire city.

"You're not going to get everything you ask for with 13 people at the table who have different values and priorities," Tang said in her closing remarks. "This budget is a reflection of that reality."

"For those who are not supportive of this budget, I will also put on you to ask," Tang continued, "what did you do to get this budget to the place you will support, what kind of collaboration did you lead, what kind of sharing or bridges or compromises have you made?"

For more on the the results of the 2023-2026 budgets, listen to the Dec. 17 episode of Speaking Municipally, Taproot's civic affairs podcast.