City budget comes with 3.9% tax increase for most homes

Ottawa city staff have drawn up a budget that would hike taxes and transit fares to patch over a gaping transit deficit.

Even then, it only balances by assuming the federal or provincial governments will come to the rescue with millions more.

If council passes the draft budget, property taxes would go up by 2.9 per cent to fund most city services, though an eight per cent hike to the transit levy means most taxpayers will effectively pay 3.9 per cent.

That's part of the plan to plug the $120 millionhole in the transit budget. Fares will also go up roughly five per cent, increasing the cost of a typical adult ride from $3.80to $4.00and the price of an monthly adult pass from $128.75 to $135.

• Mayor says Ottawa facing 'financial crisis,' blames feds for shortchanging city

The city will also reduce fare discounts that currently benefit seniors, youths and others.

Mayor Mark Sutcliffe said there will be no service reductions, though there will be capital deferrals and millions in "efficiencies." He repeatedly said that the budget strikes a balance amid challenges that make it impossible to satisfy everyone.

"Given the pressures we're facing, when we're still fighting for our fair share from other levels of government, we have to work extremely hard to achieve that balance," he said.

"While we wait for more sustainable funding solutions, we're going to have to do a lot of patchwork and use a lot of duct tape to get through each budget year."

$36M gap 4 weeks from final vote

Even so, the 2025 draft budget includes a "placeholder" that banks on $36 million coming through from higher levels of government, a contribution that neither has hinted is on the way.

"Obviously, I'm not standing here today with cheques from the other two levels of government," Sutcliffe said. "I can tell you however that we are making progress. I hope there will be more news in the coming weeks."

WATCH | Highlights from the draft budget:

Ottawa's draft municipal budget tabled

2 days ago

Duration 1:40

Ottawa taxpayers facing 3.9% tax hike, 5% hike in transit fares in 2025 budget.

Ottawa's chief financial officerCyril Rogerssaid the city does have "tried and tested strategies" to cushion the blow if that money doesn't materialize, including dialling back funding on lower-priority projects.

Still, Sutcliffesaid there are no easy solutionsif the other levels of government refuse his request for more money.

"We're going to have to look at all the options. I've heard people suggest increasing transit fares further. I've heard people suggest service reductions. I've heard people suggest some sort of supplementary tax increase that we would attribute to the federal and provincial governments," the mayor said.

"I hope it doesn't come to any of those things, but we will have to make tough decisions midway through the year if we're not getting the support we need from other levels of government," he said. "There's no easy way to come up with $36 million in the middle of the year."

A 2.9 per cent tax increase for citywide services and policewould add about $100 to the property tax bill of the average urban home.

The eight per cent transit levy hike would add about $68more for that same home. The tax burden on rural homes, which receive less transit service, would belower.

That doesn't include the added costs of a combined 4.4 per cent increase to water, sewer and stormwater rates, or the hike in garbage fees, both of which were already baked into the budget through existing long-range plans.

Money for public safety, roads and housing

All told, the draft foresees just under $5billion in operating spending and $1.6 billion in capital spending.

Despite the challenges, Sutcliffe said the budget will still invest in the city's greatest priorities, such as public safety, roadwork and housing.

The mayor highlighted funding to hire 50 new police staff, 23 new paramedics, 22 new firefighters and 10 new bylaw officers.

• Proposed police budget adds $20 to average tax bill

The budgetwill also include about $104 million to improve roads and sidewalks, and boost transit funding to $856 million, the highest level ever.

It funds new affordable housing projectswith an investment somewhere between $19 million and $23 million, depending on whether council decides to make adjustments to the vacant unit tax.

Sutcliffe said city staff managed to find$54 million in savings to help pay for those commitments.There is also a hiring pause and a discretionary spending freeze.

After a high-level question period from councillors on Wednesday, the budget will go through about a month of detailed debate and public input at committee. It is then expected to come back to council on Dec. 11 for a final vote.

Ottawa Morning11:58City budget comes with 3.9% tax increase for most homes

Ottawa city staff have drawn up a budget that would hike taxes and transit fares to patch over a gaping transit deficit. Mayor Mark Sutcliffe joins us for a debrief.

Councillors react

As thenumbers sunk in, reaction around the council table was decidedly mixed.

"I think it's a prudent approach," said Orleans West-Innes Coun. Laura Dudas, who chairs the community services committee."It's very honest with residents about where we stand."

Dudas and Barrhaven East Coun. Wilson Lo had concerns about theplaceholderfunding.Lonoted that it isn't the first time the city has banked on contributions from higher level of government with no guarantee they'd come through. In the past, it's been disappointed.

"If this was out first year doing that, I'd be comfortable. But this is not," he said.

Lo said he's generally comfortable with the balance the draft budget strikes between usingtaxes and fare hikes to help fill the transit gap.

Kitchissippi Coun. Jeff Leiper, who chairs the planning and housing committee and sat on the working group that weighed in on the transit measures, said his top priority was ensuring that there were no further service cuts.

"I don't think the fare hike is high enough to really significantly dissuade ridership. Service cuts could have destroyed ridership," he said.

Leiper said he'd be open to motions at council that shift some of the burden from fares to property taxes, but called it a "pragmatic package" overall.

"We've pulled the levers in a certain balance, in a way that I think is likely to pass council," he said.

Capital ward Coun. Shawn Menard, who chairs the environment and climate change committee, said again the city shouldn't be raising transit fares at all.

"We're putting it on the backs of our transit riders who have suffered through service issues for many years now," he said.