Saskatoon city council shaves $23M off budget shortfall but it's not enough to avoid tax increase

Saskatoon's mayor and city councillorsstill have a lot of work to do after wrapping up theirsecond special budget meeting on Tuesday.

City council was able to shave $23 million off a $72million budget shortfall over the next two years.

That still leavesshortfalls of about$29 millionin 2024 and $20 millionin 2025 that council will attempt to address at a third special budget meeting planned for Aug. 15.

If the remaining shortfall is not addressed, residentscould see a property tax increase of 10per cent in 2024 and a 6.2 per cent increase in 2025.

On Tuesday, council voted to bump up parking fees by 50 cents an hour, which is expected to result in an extra $1 million in revenue.

It also agreed on an additional15-cent convenience fee to use itsparking app.

Ward 1 Coun. Darren Hill was the sole vote against that decision.

"It appears low-hanging fruit that the administrations picks simply to find a dollaramount without enough engagement for the user group and studies and conversationswith the [Business Improvement Districts] for the impactof [COVID-19] and the turnover in parking we're seeing and struggles that exist within those areas," he said.

The North Saskatoon Business Association'sexecutive director, Keith Moen, said the city's finances have become a topic of conversation by those who "normally don't give a hoot" about civic politics.

He urged council to listen to the recommendation put forward by the association, even though they've previously fallen on deaf ears.

"In other words, you've stepped in it big time and everyone is watching," Moen said.

He urged council to reduce staffing by ten per cent which would require cutting dozens of jobs and pausingconstruction onthe downtown arena and new library.

Council did not approve the group'srecommendations, butpasseda motion tonotincrease spendingon serviceslikefire, snow removal and transit that grow withinflation.

Instead, the money will be added back to the operatingbudget in 2026.

Saskatoon's budget will be finalized at a meeting in November. Further special budget meetings could be scheduled before then.

WATCH|Uncertainty for Saskatoon residents, small businesses as city council addresses budget:

Uncertainty for Saskatoon residents, small businesses as city council addresses budget

1 year ago

Duration 2:17

Saskatoon councillors wrapped their second special budget meeting on Tuesday, discussing options to address the 2024-25 budget shortfall.

Uncertainty for small businesses and residents

Brianna Solberg, the legislative affairs director for theCanadian Federation of Independent Business, spoke with Candice Lipski on CBC Radio's Saskatoon Morning, discussing the concerns small businesses have with the budget shortfall and property taxes.

"Property taxes are particularly harmful to small business because they are profit insensitive," said Solberg, "meaning business owners have to pay them even if they aren't bringing in any revenue and 53 per cent of Saskatchewan small businesses indicate that property taxes are the most harmful."

Saskatoon Morning11:34Small business, tax federation weigh in on what city can do to limit tax increases

Candice Lipski talks with representatives of The Canadian Federation of Independent Business and Canadian Taxpayers Federation to get their thoughts on how to tackle the city's budget shortfall.

Higher property tax rates could cause businesses to lay off staff or raiseprices or,worst of all, Solberg saidbusinesses could close their doors for good.

Solberg said she thinks the city needs to prioritize essential services, such as the police service and road repairs.

Gage Haubrich, prairie director of the Canadian Taxpayers Federation, also spoke with CBC Radio's Saskatoon Morning, and said residents were probably a little shocked to learn how dire the city's funding gap is.

"If you look at it compared to Regina, the City of Saskatoon spends about $400 more per person than Regina does," Haubrich said.

"Some of that comes from our own utility, but some people don't know where that extra money is going and it kind of caught them blindsided when they found out they might have to pay this extra property tax hike."

Haubrich saida property tax increase near seven per cent would be more reasonable because it would roughly match the rate of inflation in 2022.

"That would still put a crunch on families, but it would be much better than what they are currently facing right now."