Budget Frequently Asked Questions (FAQ)

Multi-year budgets typically need adjustments so the City can respond to any significant changes that happened since the 4-year budget was set, including:

• Changes in external factors such as provincial or federal budgets or legislation
• Adjustments for operating impacts of capital (when construction projects open to service)
• Unforeseen changes to economic forecasts
• Council-directed changes 

Twice a year, in the fall and spring, City administration brings forward the Supplemental Operating Budget Adjustment (SOBA) and Supplemental Capital Budget Adjustment (SCBA) to City Council. Council also approves any necessary adjustments to the utility budgets. Through these reports, Council can make changes without revisiting the 4-year budgets as a whole. 

This fall, we are bringing forward budget adjustments that will allow us to respond to increased costs and reduced revenues, so we can continue to deliver on the 4-year budget. It will cost $41.2 million more to deliver the same services next year, due in part to utility costs and an arbitrated salary settlement. We planned for these costs, but they are much higher than forecast.

An additional 2.13% tax increase will be needed in 2024 in order to maintain the 70 services in the operating budget, bringing the tax increase to 7.09%. For an average Edmonton household, a 7.09% tax increase means about $49 more/$100K of assessed home value.

We’ve made careful and difficult decisions over the last decade to reduce our budgets, including lowering planned tax increases from 2020-22 as we supported Edmontonians through the pandemic. These low tax increases were necessary, but they aren’t sustainable.

We have limited resources and we know that many Edmontonians are also stretched thin. We’re only recommending budget adjustments that are absolutely necessary to deliver the 4-year budget.

Here's the breakdown of tax increases for the rest of the 2023-2026 budget if Council approves our recommended fall budget adjustment:

Yes, we were prepared for increased costs and decreased revenues, and they were part of our planned tax increases for 2023-2026. We anticipated and budgeted for things like: 

• Financial impacts as the City and Edmontonians continued to recover from the pandemic throughout the 2023-2026 budget cycle
• Gas and electricity increases
• Transit ridership to continue to evolve post-pandemic
• Population growth to increase demand on our services and pressure on our operating budget
• An updated funding formula for the Edmonton Police Service in 2023
• Collective bargaining agreements to resolve with various unions that represent City employees (negotiations are still underway with some unions)

The actual increased costs and reduced revenues have turned out to be much more significant, which is why we need to adjust the budget moving forward. It will cost us $41.2 million more to deliver the same services in 2024, which is equivalent to a 2.13% tax increase. This would bring the tax increase to 7.09% in 2024. 

Finding savings is actually a fundamental step in building our budgets. 

Before we look at increasing our operating budget, Administration looks at what we can do to use our current budget more efficiently. For example, in 2024, the City will manage $26 million in additional costs caused by inflation and population growth within the approved budget, which is equivalent to a 1.34% property tax increase. If we didn’t do that, we would have been recommending an 8.43% property tax increase in 2024. 

Over the past decade, we have worked hard to find efficiencies and savings to reduce the impacts of inflation and growth on our operating costs and on taxpayers. Since 2015, we have found $345 million in savings, which is equivalent to a 21.51% tax increase.   

In 2020, 2021 and 2022 we lowered planned tax increases as we supported Edmontonians through the pandemic. We were able to do this by reducing spending, including through program changes, finding efficiencies and reducing staff. We had no tax increase in 2021, and in 2022 our increase was the lowest among major Canadian municipalities. 

These low tax increases were necessary, but they aren’t sustainable, especially in our current environment of high prices and significant population growth. It’s costing the City more to deliver the same services all while experiencing a growing demand for those services. We can’t continue to absorb the financial impacts we’re facing without adjusting taxes, reducing service levels or increasing user fees (like transit fares and rec centre admissions). It will likely take a combination of all three strategies to ensure we don’t create long-term financial sustainability issues.  

Our recommended 7.09% tax increase for 2024 is what’s needed for us to continue to deliver the services and construction projects that Council approved in the 2023-2026 budget. We recently learned of an $8 million increase to our annual dividend from EPCOR, which could be used to reduce the tax increase (by 0.41% ) or enhance current services. To further reduce the tax increase, we would have to look at reducing service levels, increasing user fees or some combination of both.

This project is paid for through debt financing over a long period of time, so cancelling it will not make a significant difference to the tax increase. The debt-servicing cost in 2024 will be $749,000, which is 0.02% of the $3.3 billion annual operating budget. As construction progresses, the debt servicing costs will increase. In the 2023-2026 budget cycle, debt servicing for bike lanes will be highest in 2026 at $5.6 million, which is 0.15% of the $3.6 billion operating budget for the year.

It’s important to note that we have not yet confirmed our 2023 deficit so it has not been factored into the fall budget adjustment. The most recent projection was $73.8 million, which is current to June 30, 2023. We’ll report back again in December and will confirm any deficit as part of our year-end financial update in spring 2024, once we analyze our 4th-quarter financial results. (See Financial Reports)

We are projecting a deficit for 2023 mainly because of a higher-than-anticipated EPS arbitrated salary settlement, as well as reduced revenues from transit and ATCO Gas franchise fees.

The Financial Stabilization Reserve (FSR) was created to help offset one-time tax-supported deficits, emergent financial needs, and unanticipated budget shortfalls when they occur. The City has been prudent in transferring year-end surpluses into the reserve. In most years, we typically run a small surplus in the range of 1% of our operating budget.

Based on the current projected year-end deficit, the FSR would fall $61.6 million below its required minimum balance. If the FSR falls below its minimum balance, City policy requires Administration to develop a strategy to replenish the funds within three years. We would share a strategy for replenishing the FSR when we present our year-end financial update to Council in spring 2024.

Moving forward, we need to budget for these ongoing financial pressures, which is part of why we’re recommending an additional 2.13% increase in 2024. 

The capital budget is about what the City builds and includes funding for new infrastructure as well as maintenance of existing infrastructure Edmontonians use every day. The approved $10.3 billion capital budget will support continuing to build previously approved projects and adding additional projects including: 

• $2.6 billion for the Valley Line West LRT Expansion
• $311 million for the Lewis Farms Recreation Centre
• $100 million to fund the Active Transportation Implementation Acceleration Infrastructure Plan 

The operating budget is about the programs and services the City will deliver to Edmontonians over the next 4 years. This includes transformational projects and previous commitments. 

If the fall budget adjustment is approved, the tax-supported operating budget will increase from $3.4 billion in 2023 to $3.7 billion in 2026. Council also added to our operations in the 2023-2026 budget. By 2026, the operating budget will include $142.4 million in new funding for programs and services such as increased affordable housing funding, increased transit service, energy transition and climate adaptation initiatives.

The operating budget delivers more than 70 services to Edmontonians, including maintaining the roads and public transit that move people; police, bylaw and fire rescue services to keep people safe; and attractions, leisure activities, parks and social programs that make Edmonton a great place to live, work and visit.

If the fall adjustment is approved, the budget will require an annual property tax increases of 7.09% in  2024, 5.04% in 2025 and 4.53% in 2026.  

This means that Edmonton households will pay about $750 in 2024 for every $100,000 of assessed home value. This is an increase of $49. 

This may change based on budget adjustments, which happen every fall and spring in response to significant changes since the budget was originally set.

If approved, the increases for the 2023-2026 budget will require annual property tax increases of 7.09% in 2024, 5.04% in 2025 and 4.53% in 2026. The budget is reviewed and adjusted each year, in the spring and fall in response to significant changes. 

During the pandemic, the City worked to keep taxes low to help provide support to Edmontonians and businesses. Property tax increases were 2.6% (2019), 1.3% (2020), 0% (2021) and 1.9% (2022), which brings property tax increases, on average, below consumer inflation. 

Low or no increases aren’t sustainable in the long-term without adjusting services.

The carbon budget informs our transition to a low-carbon city. The City is one of the first cities in North America to present a carbon budget alongside our financial plans. 

Unlike the proposed capital, operating and utility budgets, Council does not deliberate or approve the carbon budget this fall. The carbon budget is a tool that shows the greenhouse gas (GHG) impacts of budget requests. This allowed Council to weigh climate change impacts when making financial decisions. 

It also allows the City to measure and track progress against Edmonton’s emission targets, so we know how we’re doing and what we need to change.

The City established community and corporate carbon budgets as part of the Community Energy Transition Strategy, which was approved by Council in April 2021. The strategy sets out our goals of being carbon neutral as a corporation by 2040 and as a community by 2050.

The carbon budget treats 2021 as the starting point for measuring our progress moving forward, and makes it clear just how much needs to be done to meet Edmonton’s emission targets:

• Without further action, forecasts show Edmonton will deplete its carbon budget of 176 megatonnes by 2036
• Instead of being carbon neutral by 2050, Edmonton would have a carbon deficit of 12.88 million tonnes a year 

The carbon budget gives Council climate change impacts to consider alongside the financial impacts of the capital, operating and utilities budgets. The carbon budget evaluates the emissions impacts of around 200 items in the approved budgets. 

The 2023-2026 budget includes recommended funding for projects that will reduce GHG emissions by 180,000 tonnes carbon dioxide equivalents (CO2e) over the 4-year period for the City. 

The carbon budget makes it clear just how much needs to be done to meet Edmonton’s emission targets. 

Without further action, forecasts show Edmonton will deplete its carbon budget of 176 megatonnes by 2036. 

The carbon budget highlights that climate change is a collective problem that will take collective action. The City is actively working to reduce emissions (including investing more than $376 million in services and construction projects in the 2023-2026 budget that will support these efforts), but to be carbon neutral by 2050, it will take a much larger collective effort, including collaboration and support from other orders of government, private investment and the actions of all Edmontonians. 

The City is making progress. We’ve set up community and corporate carbon budgets as part of the Community Energy Transition Strategy, which was approved by Council in August 2021.

We’re also integrating carbon into our budgeting process, so Council can weigh both the carbon and financial impacts of decisions. We’re one of the first cities in North America to do a carbon budget like this.

The 2023-2026 budget includes over $376 million in new funding for services and construction projects that will support the City’s energy transition efforts. This includes $100 million for the Active Transportation Infrastructure Plan, $53 million for energy retrofits of City facilities, $34.5 million for development of district energy networks, $11 million for an emissions-neutral fleet and $6.5 million for natural areas acquisition.

The Community Energy Transition Strategy sets out Edmonton’s goal of being carbon neutral by 2050. Edmonton is making positive strides. Our annual greenhouse gas emissions reduction target is 7% until 2025, followed by 3% per year from 2026 to 2030. In 2021, Edmonton’s community GHG emissions were about 15 megatonnes (14.2 tonnes per person). This is a 4% decrease in emissions from 2020, and a 17.6% reduction since 2005.