The city’s finance and economic development committee gave the thumbs-up Tuesday to a proposed three per cent property tax increase in 2020.
Under the proposal, the city-wide portion of the levy, which includes funding for libraries and public health services, would jump two per cent, while funding for police services would increase three per cent and the transit levy would go up by 6.4 per cent.
In addition, garbage fees would increase by about $11, along with planned increases of three per cent to water rates, four per cent to sewer rates and 12 per cent to stormwater rates.
According to a city report, the proposed increases would mean the average urban homeowner would shell out an extra $109 in property taxes next year, while rural homeowners would pay an average of $77 more and commercial property taxpayers would see their bills jump by an average of $229. The tax hike is expected to boost the city’s coffers by almost $75 million next year.
City staff said the transit levy is expected to increase more than originally expected because the provincial government announced earlier this year it was scrapping the previous Liberal government’s plan to double the gas tax transfer to municipalities – money that was earmarked for long-term transit projects such as phase two of the LRT.
The federal government announced a one-time contribution of $57 million over the next three years for transit-related projects, but that cash must be used for capital investments such as roads, bridges and other infrastructure. The city said the higher transit levy is necessary to offset the lower-than-expected gas tax revenue from the province.
“The plan ensures that the funds are in place to continue with council’s long-term transit plan, including Stage 2 light rail, and allow for continued expansion of service to meet the future needs of the transit system,” the staff report said.
The staff report also noted that changes to the province’s funding formula for public health, children’s services and long-term care announced earlier this year mean local taxpayers will be on the hook for an additional $13.8 million to fund those programs. The document also pointed to other factors that are eating into the budget, noting that Ottawa has some of the province’s highest rates of inflation on construction projects.
Council is slated to vote on the proposed tax increases at its next meeting on Sept. 25.