City of Saskatoon proposes 4.38 per cent property tax hike for 2023

The City of Saskatoon is proposing a property tax increase higher than approved by city councillors during their two-year budget cycle deliberations last year.

Clae Hack, the city’s chief financial officer, said even though the operating and capital budgets were approved last year, formal and final approval is still needed this year by city council.

Last year, city councillors approved a property tax increase of 3.53 per cent, or $70.43 for the year, for a home with an average price of $344,000. This year, however, the preliminary number is 4.38 per cent, or $87.30 per year.

Hack said there are reasons for the hike, including significant changes to the city’s “economic landscape.”

“(There’s) a $4.1-million increase to gasoline and diesel costs, $2.4 million in general inflationary costs, and $1.5-million increase in natural gas costs,” he said.

The overall revenue gap is $2.29 million, which Hack said needed to be filled by the property tax. Cities are not allowed by provincial law to run a deficit.

However, Hack said there are around $600,000 in options from the proposed 2023 budget that could be cut if council chose to do so, which would reduce the property tax by 0.21 per cent.

“We were previously planning on Saskatoon Light & Power as part of the city returns on investment to the City of Saskatoon to fund ongoing operations … With the increase in electrical rates, they are expecting to bring more cash in to do that asset management work. Therefore … one of our recommendations is to not provide that reversal of return on investment,” said Hack.

The other potential reduction is for the Aspen Ridge neighbourhood to not receive additional transit services since it hasn’t met a specific service level threshold.

Hack said there’s also $10 million included in this year’s operating budget as one-time funding to level off property taxes.

“So 2024 will be a big year for the city where that one-time support and funding won’t be available anymore in the operating budget, so I really expect the full implications of the pandemic to be a major factor in the 2024 budget since we still are relying on one-time funding,” Hack cautioned.

Overall, the total proposed budget for 2023 including capital, utilities and operating budgets could increase from $1.28 billion to $1.33 billion.

City councillors will have the ability to adjust any part of the proposed budget. Saskatoon’s budget deliberations run from next Monday to next Wednesday.