City of Ottawa draft budget with 2.5% tax hike tabled at council

Ottawa's draft budget looks to raise property taxes by 2.5 per cent while investing in housing, transit and infrastructure.

The property tax hike holds the line Mayor Mark Sutcliffe promised for the first two budgets of his term. He said the money — including a $4.6 billion operating budget plus $1.24 billion on capital programs — is targeted to the city's most important and urgent priorities.

"We've all heard from residents that they are struggling with rising costs," said Sutcliffe. "They don't want to see us add to their burden with big tax increases."

That means the average urban homeowner would pay $105 more on their property tax bill annually. Together with higher fees and new income from homes added over the past year, Sutcliffe said the city expects to raise about $220 million in additional revenue.

The mayor acknowledged the new money won't be enough to resolve the city's most pressing issues without federal and provincial help.

"The big chunks of money are not going to come from the City of Ottawa to address issues like housing and homelessness, to address public transit operating shortfalls, to address the mental health crisis and the opioid crisis," Sutcliffe said.

"Our budget will never be able to handle the kinds of pressures and demands that some of these crises are creating. We will need support from other levels of government to deliver on those priorities."

City scoured for savings, but denies that means cuts

Rates for water and wastewater are also set to go up, in accordance with a long-term plan. For 2024, the average water bill will rise 4.4 per cent, or $40.91 for the year.

The city's chief financial officer, Cyril Rogers, said staff managed to find savings and efficiencies on everything from vehicle fleet costs to new efforts to refurbish aging road graders. He said the savings add up to nearly $27 million for citywide tax-supported services, though even more if other areas are considered. 

Sutcliffe said savings do not mean service cuts.

"We're doing everything we can to manage our money wisely and to make sure that before we ask the taxpayers of Ottawa to put more money in, that we're looking for savings internally, and we're doing that in a way that doesn't impact the programs and services they rely on," he said.

The city was facing financial headwinds going into budget season, including inflation rates that are still running high. That flows through to municipalities on costs for construction and procurement. But Rogers said the city is somewhat insulated, especially since its biggest cost is compensation and contracts remain locked in at affordable rates.

The toughest financial challenge was at OC Transpo, which was already deep in the red for the current fiscal year as ridership remains below pre-pandemic levels.

The draft budget adds $31 million to OC Transpo to help fill a gaping deficit. Sutcliffe said it also identified $10 million in savings from transit — through what he called "underutilized and low-performing routes" — which can now be reinvested in more reliable service.

"With ridership and revenue down significantly, and without support from other levels of government, we are still investing deeply in public transit," said Sutcliffe. 

"Of course, it means we're taking money from one area and re-allocating it to another, but we're doing it within a budget that's growing and expanding. We've never spent more on public transit than we will next year."

Sutcliffe also highlighted housing investments, including more money for affordable and transitional housing, and $900 million for infrastructure.

That includes doubling annual spending on sidewalks, putting about $100 million into road renewal and $20 million for realigning Greenbank Road, a major priority for Barrhaven West Coun. David Hill.

The budget also would put $66.4 million toward a new Riverside South recreation centre. 

The draft budget will now be split up and head to committees for detailed consideration, before coming back to council for approval next month. Councillors are already holding resident meetings to solicit feedback, and more are planned for the weeks ahead.