HRM staff report recommends 9.7% increase to average property tax bill

Halifax Regional Municipality's budget committee will consider a staff report recommending a 9.7 per cent increase to the average property tax bill when it meets for the first time on Tuesday to discuss the 2024-2025 budget.

This is the first stage of a months-long process before the actual budget is finalized, likely in April.

The report says, as in the previous year, the municipality is "forced to tackle ongoing inflation and continued population growth."

The tax hike is needed to cover a revenue shortfall of $68.7 million, the report says.

In its recommendations for the 2023-24 budget, staff proposed an eight per cent tax hike. That figure was eventually reduced to 5.9 per cent.

Coun. Cathy Deagle-Gammon, the vice-chair of the audit and finance standing committee, said the municipality is not allowed to have a deficit so there are only a few options available to it.

"We can do that by debt financing, we can do it by changing the tax rate and we can do it by cutting services," she said.

"Those are the three options that are available to council and, as we move through this journey, those will be the things that will be looked at."

Residents not happy

Deagle-Gammon said she has already been hearing from residents saying that they are already being forced to cut back and an almost 10 per cent tax increase is too much.

She said council has to be "very, very conscious" of the impact budget decisions have on residents.

Coun. Pamela Lovelace said the original proposal in the current staff report was for a 15 per cent increase but it was brought down to 9.7 per cent.

Lovelace said she anticipates some long and difficult debates as council works to finalize a budget.

"I will be asking departments to consolidate to ensure that they're streamlining their services and ... working as hard as we can to ... decrease it as much as we can."

Businesses still recovering

In addition to the burden such a large increase would place on homeowners and new renters, Lovelace said many businesses are still struggling to recover from COVID-19 and wildfires.

Lovelace said she does not think the 9.7 per cent increase is acceptable but she recognizes that the municipality is struggling to deal with deficiencies in a number of areas, including road infrastructure and transit.

She said the municipality is heading in a direction where it is becoming less and less affordable.

Kevin Russell, executive director of the Investment Property Owners Association of Nova Scotia, said the suggested tax increase would be devastating for the apartment rental industry and would cause a decrease of investment in rental properties.

Russell said most people living in the city would want to see a reduction in the size of the municipal government until the economy stabilizes.