Finance committee approves 2024 budget directions

City Hall in downtown Ottawa is seen in this undated file photo. (CTV News Ottawa)

Councillors on the city's finance and corporate services committee have voted in favour of budget directions that include a 2.5 per cent property tax increase.

The vote on the budget directions report passed 9 to 3, with councillors Matt Luloff, Laura Dudas, Cathy Curry, Glen Gower, Tim Tierney, Riley Brockington, George Darouze, Catherine Kitts, and Mayor Mark Sutcliffe voting in favour. Councillors Rawlson King, Jeff Leiper and Shawn Menard voted against.

• The information you need to know, sent directly to you: Download the CTV News App

Staff are recommending the 2024 tax increase be capped at 2.5 per cent, which would follow Mayor Mark Sutcliffe's campaign promise for a maximum tax hike of 2.5 per cent in 2023 and 2024.

The Ottawa Police Service levy and the Transit Service levy would each increase by no more than 2.5 per cent.

According to a presentation by city staff, the city is expecting assessment growth—i.e., new homes—in 2024 of 1.5 per cent, lower than the 2.2 per cent in 2023. This would lead to a $10.5-million reduction in revenue compared to 2023 the presentation said; however, this is expected to be offset by higher taxes, and inflationary reductions on consumer prices and fuel. City staff say the city would receive $49.3 million in new revenue, transit would see an additional $15 million, Ottawa police would receive $13.375 million in new funding, while the Ottawa Public Library would get $2.370 million.

Some councillors said they were concerned a cap on property tax increases would hamstring the city's ability to respond to financial challenges. There are several significant budgetary issues facing the city, including a projected $35 million reduction in OC Transpo fare revenue in 2024.

"What I'm seeing in front of us is an across-the-board approach, the same we've had year after year," Coun. Shawn Menard said. "Some people and departments need more because they've been historically underfunded… I want to see some prioritization based on outcomes."

City solicitor and interim city clerk David White told councillors that Ontario's Strong Mayors, Building Homes Act now governs the budget, which gives the mayor authority over preparing it. It can be amended by council, but the mayor has the power to veto council amendments. Sutcliffe has promised not to exercise these powers, but should he choose to veto, it can be overturned by two-thirds of council.

Coun. Jeff Leiper called a 2.5 per cent increase "an arbitrary number" when saying he would not support it.

"I would be more than happy to put three or four more dollars aside in my taxes every month, every pay, in order to get the services that I think the city should be providing and over the course of nine years I've become increasingly frustrated that we can't," Leiper said.

The staff report says a 2.5 per cent property tax increase would cost the average urban property taxpayer an additional $105 in 2024, while rural homeowners would see the property tax bill increase $86.

The budget directions will rise to city council for a full vote Sept. 13. The 2024 draft budget will be tabled Nov. 8, 2023. Commitees and boards will meet from Nov. 14 to Dec. 5 to approve their respective budgets and then council will vote on the full 2024 budget on Dec. 6.