City of Ottawa sets out 3% property tax hike in 'prudent' draft budget

Most Ottawa residents will see their property taxes rise three per cent as Mayor Jim Watson unveiled a draft 2022 budget intended to mitigate inflation and help the city emerge from the COVID-19 pandemic.

Inflation 'back with a vengeance,' Ottawa mayor says in budget speech

Ottawa city council received the city's draft budget for 2022 Wednesday morning. (Trevor Pritchard/CBC)

Ottawa's spending plan for 2022 will include money for affordable housing, more eco-friendly buses, and several major road projects — all while trying to mitigate inflation and deal with the lingering effects of the COVID-19 pandemic.

The primary budget document, which spells out $4.14 billion in city-wide operating expenses, was one of three tabled Wednesday, along with separate budgets for the Ottawa Police Service and OC Transpo.

It features a municipal and commercial property tax hike of roughly three per cent, in line with the directions city council gave staff in the summer for crafting the draft budget.

Under the plan, the owner of a home assessed at $415,000 will see their taxes rise $119 if it's an urban property and $91 if it's in the country. For a commercial property, the tax hike comes out to an additional $240.

In his annual budget speech, Mayor Jim Watson said holding the tax increase to three per cent was a "practical" step the city could take to addressing inflation that was "back with a vengeance."

Canada's inflation rate rose to a new 18-year high of 4.4 per cent in September, and escalating construction costs have already caused the price tag for the future central library to rise sharply.

The extra tax revenue from new assessments, coupled with the overall tax increase, should keep the city's finances roughly in line with Statistics Canada's inflation projections, Watson told reporters after the budget presentation.

"If we don't control our spending, and the tax rate goes above three per cent, then that's passed on to consumers, particularly renters and individuals in low-income circumstances," he said.

"We don't have control over the price of meat and groceries and fresh fruit and gasoline and so on. So what we have to do — I think, what we have an obligation to do — is do everything we can to remain within that three per cent cap."

Pandemic still looms large

The financial vagaries induced by the COVID-19 pandemic, however, could prove harder to control.

The draft budget forecasts a $161.6-million pandemic-related deficit for 2022 due to things like declining transit ridership and a loss of revenue from parks and recreation programs, chief financial officer Wendy Stephanson said during Wednesday's presentation.

That's roughly in line with what Watson forecasted in his budget speech last year, although the deficit later jumped significantly.

The city is assuming funding from the provincial and federal governments will offset the majority of the deficit, Stephanson said, with help from city reserves. A "multi-year deal" in 2022 and 2023 that would help cover the $60.6-million transit shortfall is being discussed, she said.

The province also came forward Wednesday with another $44.3 million to cover the pandemic response, including Ottawa Public Health's ongoing vaccination program, Stephanson said.

A double-decker red bus is parked on a downtown street while another car drives past.
The 2022 draft budget includes $55 million to replace 74 of the city's diesel buses with new zero-emission electric vehicles, while also pledging to freeze the cost of the EquiPass and the Community Pass for another year and provide up to 2,000 free passes for shelter residents. (Francis Ferland/CBC)

Trees, buses, roadwork

As for what the city plans to spend money on, nearly $1 billion has been set aside for infrastructure projects like roads, bridges and culverts, an increase of 26 per cent over last year.

That includes widening a southern stretch of Bank Street, resurfacing Jeanne d'Arc Boulevard in Orléans, and undertaking a major rebuild of the area around Main and Hawthorne streets in Old Ottawa East.

The budget allocates $11.5 million to improve sidewalks and pathways, including the pedestrian and cyclist bridge at Carleton University. 

On affordable housing, the city plans to spend $15 million to build new units, while offering $2 million in development charge exemptions. 

Other items include:

  • $6 million to renew city parks.
  • $1.6 million to plant up to 125,000 trees.
  • $1.3 million to hire 14 paramedics and buy 12 new ambulances.
  • $1.8 million to upgrade recreational facilities to improve accessibility.

The draft budget also pledges to spend $55 million to buy 74 new zero-emission electric buses, part of an ongoing plan to replace Ottawa's entire diesel-powered fleet by 2027.

For bus riders themselves, both the EquiPass for low-income residents and the Community Pass for Ontario Disability Support Program recipients will remain frozen. The cost of a single OC Transpo fare, however, is set to rise to $3.70 and the monthly pass is set to increase by $3 to $125.50 as of Jan. 1.

Mayor Jim Watson, seen here in October, said Wednesday's draft budget was a 'prudent' one that will help residents facing inflationary pressures that are 'back with a vengeance.' (Alexander Behne/CBC)

    The budget ultimately invests in the city in a "prudent manner," Watson said in his budget speech, while keeping Ottawa "affordable as a new round of inflation threatens the purchasing power of all residents."

    "It positions our city ... to win the fight against COVID-19. It continues to invest in our roads, sidewalks and multi-use pathways. It strives to help businesses bounce back from the pandemic," he said.

    "And it endeavours to make our city more sustainable for future generations."

    With the draft budget documents now tabled, city committees will scrutinize the various spending plans before council sets the city's final 2022 budget in stone on Dec. 8.