Council approves 3.9% tax hike in 2025 City of Ottawa budget, hikes senior monthly fares $9

City council has voted to approve the 2025 City of Ottawa budget that will include scaled back fare hikes for seniors and retain youth discount passes while raising taxes across the board for most homeowners.

"This has been obviously a very challenging budget process," Mayor Mark Sutcliffe said at the conclusion of the six hour marathon council meeting on Wednesday.

"It is not perfect, but no budget is, having said that, I do believe that it strikes a very good balance between investing in what matters most in our community and protecting affordability for our residents."

Councillors voted 22-3 to approve the budget, with Laine Johnson, Sean Devine and Jeff Leiper voting against.

Residents will see a 2.9 per cent property tax increase plus a hike to the transit levy that would raise the average urban property tax bill by $168 in 2025. The draft budget earmarks an eight per cent increase to the transit levy, an approximately one per cent hike in taxes to most homeowners.

Property taxes are set to remain lower than many Canadian cities but is among one of the highest increases Ottawa has seen in years. Other cities have placed significantly higher tax burdens on their residents this year, including Toronto: 9.5 per cent, Vancouver: 7.5 per cent, Edmonton: 8.9 per cent and Calgary: 7.8 per cent.

The city says the budget comes with a total of $208 million in savings through service reviews and improvement initiatives. 

Ottawa is facing significant budgetary strains, prompting Sutcliffe to launch a "Fairness for Ottawa" campaign this year to appeal for more funding from higher levels of government while sticking to a campaign promise to keep property taxes low. In addition to increases to fares and the transit levy, the budget includes $36 million in "expected funding from senior levels of government," which has not been confirmed.

Ottawa Mayor Mark Sutcliffe at a media availability after the budget vote on Dec. 11, 2024. (Shaun Vardon/CTV News Ottawa)

Modest fare increase for seniors, youth discount passes to stay for now

Sutcliffe says the 2025 budget includes a "historic investment" in public transit, with OC Transpo's budget increasing $88 million to $856 million. The city plans to open the Trillium Line next month and the eastern extension of the Confederation Line later next year.

The most hotly contested part of the day, the transit budget, passed by a vote of 18-7, with councillors Laine Johnson, Ariel Troster, Riley Brockington, Sean Devine, Wilson Lo and Shawn Menard voting against. A motion moved by Coun. Tim Tierney made several changes to the most controversial parts of the transit budget. Youth discount passes will remain in place until at least September and senior discount passes will see a more modest increase than what had been originally proposed.

The cost of a senior monthly pass will go up from $49 to $58.25 effective in February 2025. Staff had originally proposed raising seniors passes 120 per cent – to $108. Following significant pushback, the Transportation Commission voted last week to reduce the increase to $78.50 but some councillors felt that was still too high.

The approved increase will give seniors a 57 per cent discount on the regular adult monthly rate, which is set to go up to $135 in January.

City staff had also proposed doing away with free transit days for seniors on Wednesdays and Sundays but they will remain in place.

Discussions over the final budget came after nearly two hours of debate as OC Transpo faces questions over how it will fill a $120 million hole in its budget. Several councillors, including Coun. Riley Brockington, expressed "significant concerns" that the budget did not present realistic proposals to improve some of the largest problems with the transit system, including bus reliability.

"These are concerns I have because I think they are not realistic in coming to fruition. And I have an ethical obligation when I vote for a budget to make sure it’s the best budget before us and the estimates in the budget are as realistic as they can be," he said.

Sutcliffe said the transit budget has not been an "easy file" but that progress is being made.

"I know that this is a file that has been a source of great frustration for residents and for councillors and everyone," he said.

"As we continue to invest at historic levels in public transit, as we continue to prioritize public transit, we have to celebrate our successes as well."

Sutcliffe reiterated the need from upper levels of government to step in to support Ottawa's transit system.

"There's no question that this budget is a patchwork solution. That’s what's necessary at the moment given the circumstances that we are facing. But we need to work together to come up with long-term solutions," he said.

To offset the $5.9 million in additional costs the budget faces, councillors voted to take $3.4 million from the capital budget and reduce contributions to the transit capital reserve by $4.4 million. An anticipated $1.5 million was found in expected savings from the city's fuel hedging program based on a decrease in diesel prices and interest rates cut.

"We're squeezing the lemon a little harder to be able to find those savings to be able to make this happen. While some people criticize that we're just kicking the ball down the road, no, our discussions were very determined," Coun. Tim Tierney said.

"Things are going in the right direction but let's be clear, this budget was very conservatively constructed."

Councillors also opted to keep the youth pass in place for now, with a small increase from $99.25 to $104. A proposal to eliminate the youth pass will be put aside until September after the Ottawa Student Transportation Authority (OSTA) raised concerns over the financial impact that would have on its services.

City staff are being directed to collaborate with OSTA and stakeholders to advocate for a more sustainable model for student transportation funding and to investigate the feasibility of a new discount pass for students under 18, similar to that of the U-Pass program offered to post-secondary students.

The budget includes a five per cent overall increase to fares. A single-ride adult fare paid by credit card will increase to $4, while a cash fare will go up to $4.05.

There will be no more free rides for 11 and 12-year-olds. That will become a $2 fare starting in January.

A proposal to increase the U-Pass by five per cent will also be delayed until September so staff can negotiate with students and school administrators who participate in the program. University student unions had said an increase over 2.5 per cent would violate the agreement they have with OC Transpo to keep transit fares low for post-secondary students.

City council before a vote on the 2025 City of Ottawa budget on Dec. 11, 2024. (Tyler Fleming/CTV News Ottawa)

More money for police, emergency services

Council approved the 2025 Ottawa Police Service budget by a vote of 18-5. Councillors Laine Johnson, Theresa Kavanagh, Rawlson King, Jeff Leiper and Shawn Menard voted against the budget.

The $388.7 million budget includes a $16.3 million increase in funding. The budget includes $20 million to maintain existing services plus an extra $8.1 million to hire 22 more sworn officers and 28 new civilian positions.

The police service's budget also includes $5.4 million for new police cars, up to $1.9 million for conducted energy weapons, such as Tasers, and $10.3 million for upgrades to police headquarters on Elgin Street.

The 2025 Ottawa Police Service budget includes plans to launch a new Mounted Patrol Unit, funded by the Ontario government. Residents will be paying an extra $20 for policing on their property tax bill next year.

User fees involving police, including criminal records checks, are also set to increase.

The budget will include funding to hire 100 new emergency responders, including 23 new paramedics to increase service and reduce the impact of offload delays, 22 new firefighters and 10 new bylaw officers.

Sutcliffe had previously said that $54 million in savings had been found in the 2025 budget, and a hiring pause and a discretionary spending freeze remain in place. The mayor says $208 million in savings is the equivalent of a 10.5 per cent tax increase, and those savings have been invested into the city's priorities.

Coun. Laine Johnson, who says she voted against the budget at the last minute, criticized the process, saying councillors and residents didn't have enough time to provide input to the spending plans. She said the budget doesn't provide enough solutions to the deficit issues.

"My feeling is that as a public service, as a municipal government, we've inherited a series of challenges that are not going to be solved if we continue to rinse and repeat the same solutions that we've had for the last 16 years," she said.

"At some point we're going to have to pay. We either pay now or we pay later." 

The budget also includes millions for a variety of services, including roads, city parks, housing and homelessness. The city will spend $186 million for integrated road, water and sewer projects. $69.5 million will be spent to resurface roads and $14 million will go to new and existing sidewalks.

The city will invest $48.5 million through the province's Homelessness Prevention Program to support the local shelter system, housing loss prevention programs, supportive housing and assistance programs.

$375 million will be spent for climate action and $887,000 for tree replacement and maintenance to expand the urban tree canopy.

With files from CTV News Ottawa's Josh Pringle,Ted Raymond and Shaun Vardon