Saskatoon financial forecast pegs property tax increase at 10%, but says number will go down

The City of Saskatoon has released its preliminary financial forecast, and the numbers are daunting.

It projects property tax increases of 10 per cent in 2026 and another seven per cent in 2027 on an average assessed home value of $397,000.

Inflation, growth, funding for long-term projects and the police budget account for much of the financial pressure.

Clae Hack, the city's chief financial officer, said he's "confident" the numbers aren't what will be ultimately approved by city council when they pass a final budget in the fall.

"The starting point of all those conversations is, what are the pressures we're facing? What can we do to address them?" Hack told host Stephanie Massicotte on CBC Radio's Saskatoon Morning on Thursday.

"I think for any household or business, that's always the starting point to understand the pressures you're facing and then to make decisions from there."

One of the biggest pressures is funding for the Saskatoon Police Service, which accounts for more than one-third of the projected increase — driven by inflation and wage increases set out in a recent arbitration settlement.

Hack said he has talked with the police chief about the budget, but ultimately, the board of police commissioners makes the final decision on it.

Inflation is another big driver of rising expenses. The administration's report to council cites examples of items that have seen big increases since 2021, such as sand (23 per cent), asphalt (38 per cent), buses (23 per cent) and cement (28 per cent), according to Statistics Canada data.

Growth also drives up costs, the report notes. The city's population has increased by four to five per cent annually over the past two years.

"When we add more hectares of park space and kilometres of roadway to program and service that growing population, those come with costs to maintain as well," Hack said.

Saskatoon Morning8:07CFO of Saskatoon talks financial realities city faces and projected tax hikes in years ahead

According to the city of Saskatoon's early financial forecast, property tax is projected to increase 9.9 per cent in 2026 and about 7.3 per cent in 2027. Host Stephanie Massicotte speaks with City of Saskatoon CFO Clae Hack about that forecast and why he feels confident those aren't the final numbers.

City council previously decided to phase in spending for some big capital projects — such as the Link rapid transit system, east leisure centre and two fire stations — so there are already line items for those.

The administration is forecasting revenue increases of about 3.5 per cent and four per cent in each of the next two years, which "while substantive," are lower than "the rate of inflation, growth and the associated expenditure impacts."

The report notes Saskatoon has one of the most affordable property tax burdens in Western Canada, citing data that shows Saskatoon residents pay about 2.6 per cent of their after-tax income compared to the regional median of about three per cent.

The preliminary financial forecast will be considered by council members at the next meeting of the governance and priorities committee on June 11. It recommends that council direct the administration to continue to refine the budget to reduce the proposed property tax increases.