Councillors ask staff to hold proposed tax hike at 2.5%

Ottawa city councillors directed staff to hold proposals fortax hikes to 2.5 per cent as theydraw up a budget for next year.

The vote at Tuesday's finance and corporate services committee is simplyguidance, and council can still rewrite the budget once it'stabled this fall.

But the votemay come as a relief to Mayor Mark Sutcliffe, who campaigned on capping tax increases atthat ratefor the first two years of his term.

Asked Tuesday whether he'd use the strong mayor powers awarded by the province tohold that line, he was confident a majority ofcouncil will stick to it, saving him from using a veto he's vowed to avoid.

"I don't think it's going tocome down to that," he said, adding thathe has a mandate from voters to keep taxes low.

"The vast, vast majority of Ottawa residents voted for platforms that had moderate or low tax increases for the next few years," Sutcliffe said.

"So Ithink there's an understanding of that around the council table.We're working hard to identify savings so that we can continue to invest in services."

Staff are drafting the 2024 budget amid inflation pressures and a gaping hole in OC Transpo's finances. A minority on the committee worried the tax hike won't be enough to preserve city services and resisted a plan to hike transit fares.

KitchissippiCoun. Jeff Leipersaid resources aren't there to face up to challenges on everything from recycling, potholes to bylaw enforcement. But he noted the window is still open to revisit the tax plan.

"Can we get these things that residents have a right to expect that their city is going to provide?" he asked. "We can choose as a council to bring in the taxes necessary in order to do that.We are not capped at 2.5 per cent."

OC Transpo budget 'greatest financial challenge'

The tax plan would raise about $81.4 million, taking into account modest growth in the city's tax base from new builds.

That money would be split between police, transit, public health and libraries, which each have their own budgets, leaving about $49.3 million for all other city services.The direction councillors voted for Tuesday aims to hold each of those budgets togrowth of 2.5 per cent.

Sutcliffe, who again this weekcalled for increased police resources to combat gang and gun crime, said he thinks that will be enough to hire the officers needed.

But staff have pinpointed the transit budget as the "greatest financial challenge" facing the city.

OC Transpo ridership remains far short of pre-pandemic levels, costing about $35 million in lost fare revenue.

So staff are proposing a 2.5 per cent fare increase to make up the difference, a notion that didn't sit well with several residents who spoke at the committee.

Emma Bider said repeated fare hikes and under-investment in OC Transpo deter ridership and force residents to use cars. She called that a tax of its own.

"I would much rather pay for a reliable, frequent transit system," she said. "I'm already paying an additional tax to live in Ottawa, and that is a car tax."

Some downtown councillors on the committee took up that argument, calling for an increased transit levy on property taxes that would allow OC Transpo to fill the deficit and improve service,without raising fares.

"We're struggling with ridership in the first place. Obviously another increase on the transit fare side is not going to help," said Capital Ward Coun. Shawn Menard.

"I think we should be striving to freeze those fares again this year."