April 17, 2024
Mayor Amarjeet Sohi
2nd Floor, City Hall
1 Sir Winston Churchill Square
Edmonton, Alberta T5J 2R7
RE: Spring 2024 Supplemental Operating Budget Adjustment
Mayor and Council:
Edmonton’s business community – as represented by the Edmonton Chamber of Commerce, UDI–Metro, NAIOP, and BOMA Edmonton – are deeply concerned about the proposed tax increases of 8.7% in 2024, 7.0% in 2025, and 6.4% in 2026, as outlined in the April 23, 2024, Financial and Corporate Services report FCS02361.
In November 2022, Council approved its 2023-2026 capital, operating, utility, and carbon budgets. At the time, we voiced concerns about proposed tax increases that amounted to nearly 5% annually. We recommended principles and actions that would eliminate the proposed tax increases and bring greater focus to municipal expenditures. Despite these concerns, and despite approving substantial multi-year tax increases, we were cautiously optimistic when Council committed to finding significant cost savings through the OP-12 budget exercise.
One year later, Council approved further tax increases as part of its supplemental operating budget adjustment. At the time, we urged Council to apply a fiscally responsible lens and to assess budget priorities based on economic impact. This lens is critical if we want our people, businesses, and city to remain attractive and competitive in the long-term. We are confident that the following principles remain relevant and should guide Council’s budgetary decisions:
- Ignite new investment: every public dollar spent should be structured to bring more back to the community in return. These investments should generate social and economic impacts that are measurable and necessary for Edmonton.
- Focus on areas where we can succeed: Council should get out of whole lines of business that are not core mandates of a municipality and/or can be better handled by the private sector, non-governmental organizations, or other orders of government.
- Commit to measurable progress: the City should focus services and investments on delivery of essential services that are expected of a municipality, such as infrastructure planning and maintenance, snow clearing, park maintenance, waste collection, etc.
We acknowledge the breadth of financial pressure and economic uncertainty that individuals, businesses, and municipalities currently face. Fuel and utility price volatility, high interest rates, supply chain disruptions, and general inflation affect everyone’s bottom line. Edmonton’s business community has responded by making tough yet reasonable decisions that prioritize investments, reduce costs, and generate value for our community. The City must make tough decisions – to mitigate constant, significant, and unexpected tax increases each year – to maintain a competitive business environment, and to fund the services that Edmontonians rely on.
We also acknowledge the efforts made by Council to address Edmonton’s challenging financial position. The OP-12 budget exercise signalled a willingness to adopt a fiscally responsible lens for budgetary decisions. We’re hopeful Council’s commitment to critically assessing which lines of business are legally required, practically necessary, non-core, or strategic in nature will continue.
On April 23, 2024, Council will deliberate further adjustments to its four-year operating budget. We strongly encourage Council to consider adjustments that will result in a more reasonable property tax increase for residents and businesses, including:
- Further divestment from non-core services: As part of OP-12, Administration identified over 50 non-core services. It is unclear how many of these services have been discontinued, or how many will be divested from in the future. Council should consider reducing expenditures in non-core services and return resulting savings to the tax levy.
- Unallocated OP-12 Savings: As part of OP-12, Administration identified $284.6M in revenue generation and/or cost-saving opportunities between 2023-2026. As of March 2024, $56.5M of these savings were classified as unallocated. Rather than spending these resources on Council priorities, they should be used in a manner that reduces property taxes and/or generates a significant economic impact for the City.
- Review the Financial Stabilization Reserve Policy: Council approved Policy C629: Financial Stabilization Reserve on December 6, 2021. Council should expedite review of this policy before the fall 2024 supplemental operating budget adjustment to revise minimum balance requirements and amortization periods in a manner that will ease pressure on the City’s financial position over the next three years. Council could also direct Administration to return a portion of the $33.5M allocated to the financial stabilization reserve in 2024 to the tax levy.
We ask that Council take every necessary and prudent step to minimize property tax increases in 2024. Edmonton’s recovery is fragile, and it is critical at this time to preserve and nurture the economic momentum our city’s business community has fought for in recent years. Effective and decisive steps to reduce or eliminate this additional tax increase would send a positive message to businesses and potential investors in the city and region. We ask Council to demonstrate the same level of leadership that individuals and businesses have demonstrated in managing their finances during this period of economic instability.
Sincerely,
Lisa Baroldi, President and CEO, BOMA Edmonton
Doug Griffiths, President and CEO, Edmonton Chamber of Commerce
Anand Pye, CEO, NAIOP Edmonton
Kalen Anderson, CEO, Urban Development Institute – Edmonton Metro
About our Organizations
Edmonton Chamber of Commerce
The Edmonton Chamber of Commerce (Chamber) is the official voice of business in the Edmonton Metropolitan Region. With over 1,800 member companies that employ more than 100,000 people, we are one of the largest and longest standing chambers in Canada and among the most influential business organizations in the country.
BOMA Edmonton
Building Owners and Managers Association of Edmonton (BOMA Edmonton) is a membership-driven industry association for companies and professionals involved in commercial property ownership and management, operations, and service provision. Our vision is of a high-performing commercial real estate industry that has a positive impact on communities through smart and sustainable buildings and our BOMA BEST program, diverse and educated talent, fair and equitable taxation and regulation, and safe communities and vibrant economies.
NAIOP Edmonton
NAIOP is Edmonton’s Commercial Real Estate Development Association. It is a leading voice for developers, owners and investors in office, industrial, retail and mixed-use real estate. Edmonton Businesses in these buildings pay about half of all property taxes collected in Edmonton. NAIOP’s membership also includes real estate professionals in fields such as brokerage, finance, law, consulting, and construction management.
Urban Development Institute – Edmonton Metro
The Urban Development Institute-Edmonton Metro (UDI) is a non-profit, member-driven organization representing leaders in the real estate development industry in all communities throughout the Edmonton Metropolitan region. UDI’s members are development companies and the professionals involved in our industry, including planners, surveyors, landscape architects, engineers, contractors, finance managers, and others.
MEDIA CONTACT
Akanksha Bhatnagar
Director, Communications & Marketing
abhatnagar@edmontonchamber.com
780-616-7153
Have your say.
The Edmonton Chamber wants to hear from you. What are the top issues and priorities for your business this spring? Start the conversation by writing to policy@edmontonchamber.com