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

Ottawa's spending plan for 2022 will include money for affordable housing, moreeco-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 billionin city-wide operating expenses, was one of three tabled Wednesday, along with separate budgets for the Ottawa Police Service and OC Transpo.

• Ottawa police draft budget calls for 2.9% increase
• OC Transpo seeks $21M more in 2022 budget, expects $60M from province

It featuresa municipal and commercial property tax hikeof 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 theirtaxes 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.

• It's been nearly 20 years since inflation has been this high in Canada

The extra tax revenue from new assessments, coupled with the overall tax increase,should keep the city's finances roughly in line withStatistics 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 andgasoline 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 deficitfor 2022 due to things like declining transit ridershipand a loss of revenue from parks and recreation programs, chief financial officer Wendy Stephansonsaid 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.

• Pandemic projected to cost city $254M in 2021

The city is assuming funding from the provincial and federal governments will offsetthe 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 withanother $44.3 millionto cover the pandemic response, including Ottawa Public Health'songoing vaccinationprogram, Stephanson said.

Trees, buses, roadwork

As for what the city plansto spendmoney 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 Orlans, 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 plansto 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 buy74 new zero-emission electricbuses, 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 singleOC Transpo fare, however, is set to rise to $3.70 and the monthly pass is set to increase by $3 to $125.50as of Jan. 1.

The budget ultimately invests in the city in a "prudent manner," Watson said in his budget speech, whilekeeping 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 businessesbounce back fromthe 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.