Ottawa taxpayers facing 3.9% tax hike, 5% hike in transit fares in 2025 budget

Mayor Mark Sutcliffe outlines the 2025 City of Ottawa budget at Ottawa City Hall Wednesday morning. (Katie Griffin/CTV News Ottawa)

Ottawa residents are facing a 3.9 per cent property tax increase and a 5 per cent hike in transit fares, as the city of Ottawa "uses a lot of duct tape" to fill a $120 million hole in the 2025 OC Transpo budget.

Mayor Mark Sutcliffe says the $5 billion 2025 City of Ottawa budget includes a 2.9 per cent property tax hike for "most city services," while the transit levy will increase eight per cent, which equals an additional one per cent tax hike for most homeowners.

"We must strike the right balance. This budget is a balanced approach to our residents' needs," Sutcliffe told reporters.

"It invests in the core priorities that matter most to our residents: public safety, public transit, roads and sidewalks, housing and supporting the most vulnerable."

A 3.9 per cent property tax increase would raise the average urban property tax bill by $168 in 2025.

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The budget was tabled three months after Sutcliffe launched his "Campaign for Fairness," calling on the federal and Ontario governments to provide $140 million a year over three years to help address a revenue shortfall at OC Transpo.

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 both the Trillium Line and the eastern extension of the Confederation Line over the next 12 months.

With no funding confirmed from the upper levels of government, the city is pulling several levers to address a $120 million shortfall in the 2025 OC Transpo budget. Sutcliffe says "tough decisions on how to fund transit" had to be made, including transit fare hikes and finding more efficiencies.

"While we wait for more sustainable funding solutions, we're going to have to do a lot of patchwork and use a lot of duct tape to get through each budget year," Sutcliffe said. "These solutions aren't always ideal; many of them are one-time answers that will help us only in 2025, but in the current climate that's what we need to do."

The mayor says the 2025 budget will increase the transit levy by eight per cent, which equals an additional one-per-cent tax increase. OC Transpo fares will increase five per cent, and adjustments will be made to discounted fares for students and seniors to "bring them in line with those in other cities."

The 2025 OC Transpo budget proposes increasing the cost of a single adult ride by 5 per cent. If approved, a single-ride adult fare paid by card would increase $0.20 to $4, while a cash fare increases $0.20 to $4.05.

Other fare increases: 

• An adult monthly pass increases $6.25 to $135.
• A senior monthly pass will increase 120 per cent from $49 to $108.
• A U-Pass will increase $11.45 to $240.52 a semester.

OC Transpo is scrapping discounted youth fares for 13 to 18 year-olds and eliminating free fares for 11 and 12 year-olds. Youth will need to pay the adult monthly pass fee.

The transit budget includes $21.3 million in capital efficiencies and deferrals and $12.4 million in operating efficiencies. OC Transpo ridership is projected to be 80 per cent of pre-pandemic levels in 2025.

"No service reductions at this time," the mayor said.

Sutcliffe says a $36 million placeholder is in the budget for possible funding from the upper levels of government for public transit.

Comparison chart of transit fares across the country. The 2025 OC Transpo budget proposes increasing the cost of a single adult ride by 5 per cent. If approved, a single-ride adult fare paid by card would increase $0.20 to $4.

Other investments in 2025 budget

The budget includes $1.68 billion in capital spending and a $4.98 billion operating spending plan for 2025.

Sutcliffe says the 2025 City of Ottawa budget will include funding to hire 100 new emergency responders, including 50 staff for the Ottawa Police Service, 23 new paramedics to increase service and reduce the impact of offload delays, 22 new firefighters and 10 new bylaw officers.

The mayor says the 2025 budget will invest $104 million to improve roads and sidewalks, including $89.6 million to repair and resurface roads and $14 million for new and existing sidewalks.  The city will also spend $20.5 million over the next two years to reduce the backlog of work to install traffic signals.

In a media release, the city said the 2025 budget also included $200 million for integrated rehabilitation projects on road infrastructure. Other spending includes:

• $4.2 million increase for social housing
• $550,000 operating budget increase for Ottawa Community Housing Safety Services
• $4.4 million increase for shelter operations and diversion
• $150,000 funding for anti-hate initiatives
• $30 million allocated to more than 100 non-profit agencies to address poverty and social services
• Funding for affordable housing initiatives to support the $176 million from the Housing Accelerator Fund
• $279,000 base operating increase in parks maintenance
• $350,000 capital project for minor park repairs
• $400,000 to upgrade park amenities
• $1.45 million to support facility maintenance for transitional housing
• $375 million for climate action and environmental resilience
• $2.3 million to support reducing landfill use
• $887,000 for tree replacement and maintenance to expand the urban tree canopy

Councillors will have a $12,500 increase in funding for traffic calming measures, bringing the annual budget to $85,000. The city will spend $1.5 million for city-wide permanent traffic calming measures.

Capital spending in 2025 includes $10.9 million for the Greenbank Road widening and realignment from Chapman Mills to Barnsdale, $10.4 million for the Carp Road widening and $6 million for detailed design work for Mer Bleue widening and Renaud Road realignment along the Brian Coburn extension.

Some community groups have urged the city to consider other revenue raising tools, including raising property taxes and parking fees. The groups are seeking expanded funding for public transit and affordable housing.

Other Canadian cities have faced significant tax hikes in 2024, including Toronto: 9.5 per cent, Vancouver: 7.5 per cent, Edmonton: 8.9 per cent and Calgary: 7.8 per cent.

The mayor says $54 million in savings have been found in the 2025 budget, and a hiring pause and a discretionary spending freeze remain in place.

"We've made tough decisions about how we spend money at the city," Sutcliffe said. "We've found $208 million in savings and efficiencies since the start of this term of council, that's less than two years ago."

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.

Councillors will discuss and debate the draft budget on Wednesday and during committee meetings over the next three weeks before its final approval on Dec. 11. 

Ottawa Police Service budget

The Ottawa Police Service plans to hire 22 new officers and continue focusing on the new district policing model with increased staffing for neighbourhood resource teams, traffic and community policing as part of its 2025 budget.

With the help of funding from the federal and Ontario governments, the service will also create a new Parliamentary District and an Alternative Mental Health Support Project. There are also plans to launch a new Mounted Unit to help with policing demonstrations and events and patrolling the ByWard Market in the 2025 budget.

The Ottawa Police Services Board tabled the $447.5 million gross operating budget for 2025 on Wednesday, with a $16.3 million increase in funding. If approved, the average urban property taxpayer will pay an extra $20 for policing services next year.

"This Draft Budget is designed to meet Ottawa's key public safety needs and will assist us in serving the residents and businesses of our community better," Chief Eric Stubbs said in a statement. "It is designed to address gaps in our service and focuses on building public trust while advancing the strategic priorities set by the Ottawa Police Services Board."

The budget calls for Ottawa police to hire 50 new employees in 2025, including 28 civilian positions and 22 sworn-officer positions. The service is looking to hire 145 new sworn members in 2024, 2025 and 2026 to expand the ranks and account for attrition.

The 2025 budget includes finding $9 million in efficiencies.

Stubbs and staff warn a risk to the budget is upcoming contract talks in 2025 with the Ottawa Police Association and the Senior Officers Association.