City hall hiring, spending freeze amid $14M deficit: new report
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Ottawa City Hall is running a $14-million deficit in the first quarter, prompting a spending freeze and a pause on hiring, according to a report for the Finance and Corporate Services Committee.
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The report said that the hiring and spending freezes 'play a critical role in managing the impact of these unforeseen events.'
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'Management remains committed to implementing these strategies throughout 2025, with a continued focus on maintaining service levels,' the report added.
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In the report, the city's deficit was attributed to 'above average winter weather events' that resulted in a $24.9-million deficit for road services because of higher maintenance costs.
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Last winter in Ottawa saw 193 cm of snow dumped on the city while the five-year average is 143 cm.
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The significant increase in snowfall raises further questions about how climate change and unforeseen extreme weather events will continue to impact the city's budget planning.
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In the Q1 report, the city's transit services also saw a deficit of $1.7 million, which was attributed to lower provincial funding and lower fare revenue than what was budgeted.
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The shortfall exists despite a $200,000 savings due to O-Train Line 1 service reductions. The report says those savings were offset because of delays to the revamp of Ottawa's bus routes and higher Para Transpo service costs.
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However, the city is monitoring how the elimination of the federal carbon tax will impact the city's budget going forward. The scrapping of the carbon tax by Prime Minister Mark Carney is 'expected to have a positive impact on the 2025 operating budget.'
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It's unclear if the savings will be able to make up for Ottawa's Q1 deficit.
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The report says that the end of the consumer-facing carbon tax will reduce operating costs for the city, 'particularly in fuel-intensive departments' like transit, road maintenance and emergency services.
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Meanwhile, Emergency and Protective Services saw a surplus of $1.4 million due to higher-than-anticipated parking fines and compensation savings from worker vacancies, among other revenue generated.
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