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CBC
2 days ago
- Business
- CBC
Saskatoon financial forecast pegs property tax increase at 10%, but says number will go down
Social Sharing The City of Saskatoon has released its preliminary financial forecast, and the numbers are daunting. It projects property tax increases of 10 per cent in 2026 and another seven per cent in 2027 on an average assessed home value of $397,000. Inflation, growth, funding for long-term projects and the police budget account for much of the financial pressure. Clae Hack, the city's chief financial officer, said he's "confident" the numbers aren't what will be ultimately approved by city council when they pass a final budget in the fall. "The starting point of all those conversations is, what are the pressures we're facing? What can we do to address them?" Hack told host Stephanie Massicotte on CBC Radio's Saskatoon Morning on Thursday. "I think for any household or business, that's always the starting point to understand the pressures you're facing and then to make decisions from there." One of the biggest pressures is funding for the Saskatoon Police Service, which accounts for more than one-third of the projected increase — driven by inflation and wage increases set out in a recent arbitration settlement. Hack said he has talked with the police chief about the budget, but ultimately, the board of police commissioners makes the final decision on it. Inflation is another big driver of rising expenses. The administration's report to council cites examples of items that have seen big increases since 2021, such as sand (23 per cent), asphalt (38 per cent), buses (23 per cent) and cement (28 per cent), according to Statistics Canada data. Growth also drives up costs, the report notes. The city's population has increased by four to five per cent annually over the past two years. "When we add more hectares of park space and kilometres of roadway to program and service that growing population, those come with costs to maintain as well," Hack said. City council previously decided to phase in spending for some big capital projects — such as the Link rapid transit system, east leisure centre and two fire stations — so there are already line items for those. The administration is forecasting revenue increases of about 3.5 per cent and four per cent in each of the next two years, which "while substantive," are lower than "the rate of inflation, growth and the associated expenditure impacts." The report notes Saskatoon has one of the most affordable property tax burdens in Western Canada, citing data that shows Saskatoon residents pay about 2.6 per cent of their after-tax income compared to the regional median of about three per cent. The preliminary financial forecast will be considered by council members at the next meeting of the governance and priorities committee on June 11. It recommends that council direct the administration to continue to refine the budget to reduce the proposed property tax increases.
CTV News
3 days ago
- Business
- CTV News
City forecasts need for 9.9% property tax increase next year
The City of Saskatoon could be facing one of its largest ever tax hikes next year. City administration will present a report to the city's governance and priorities committee next week that forecasts property tax increases of 9.9 per cent in 2026 and 7.3 per cent in 2027. 'The city continues to face increasing costs from inflation and the needs of a growing city, and non-property tax revenue sources continue to not keep up with inflation and growth,' chief financial officer Clae Hack said Wednesday. The increases amount to $22 and $18 per month, respectively, for an average assessed home value of $397,000. Hack noted city councillors are likely to look for cuts, rather than approve such a sizeable hike, much like the previous council did in 2023 when the city lowered a $75 million dollar shortfall by $39 million. But Hack said the forecast is a reminder of the effects ongoing inflation and rapid population growth have had on city finances. 'There's definitely no silver bullet. There's not going to be one easy decision that doesn't impact anybody across the city. So, it's going to be a combination of various things,' Hack said about efforts to reduce the tax hike. The largest pressure on the city is the Saskatoon Police Service (SPS) budget, which accounts for more than one-third of the potential increase. The police operating budget is projecting increases of 10.4 per cent in 2026 and 6.4 per cent in 2027 over its existing budget, which Hack largely attributed to salary increases — part of binding arbitration over a new collective bargaining agreement. Without any other increases to expenses, the police budget alone would account for a 4.09 per cent increase to property taxes. 'They recently had an arbitration settlement come in. So, funding the results of that and then future collective bargaining estimates are a big part of their budget increase,' Hack said. Hack says phase-in expenses previously directed by council and maintaining existing service levels also impact the budget. The Link transit system, the new leisure centre planned for growing areas on the east side of the city and two new fire halls, among other expenses, will add approximately $7.5 million and $9.6 million in 2026 and 2027 respectively. Population growth and increasing inflation are also impacting revenue, as well as expenses. According to Statistics Canada, Saskatoon added 12,896 people in 2024. Newcomers to Saskatoon accounted for 42 per cent of the province's population growth last year. Even though the city has collected nearly 19 per cent more in property tax revenue since 2022, the value of the revenue can't keep up with expense pressures, making the city more reliant on property taxes. 'We're seeing things like our user fees or our government grants maybe not growing at the same pace of the expenses. So when you think about the property tax, not only does the property tax need to pick up its share of the expenditure pressures the city's facing, but it also needs to pick up the share of other revenues that aren't keeping pace,' Hack said. Inflation, while not as significant as in 2022 or 2023, is also a major factor. Hack says asphalt costs have risen by nearly 40 per cent in the last four years. Cement also costs 11.4 per cent more than it did last year and 30 per cent more than it did in 2020. Hack said administration hopes to present a 'refined' budget with a minimum one per cent reduction to the property tax increase by November. 'It's not ideal. Nobody would like a zero per cent property tax increase more than I would. But I think in our role, our main job, especially since everything that we do happens in the public, it's to provide the clear, transparent view of the needs facing the city,' Hack said. The largest property tax increase since at least 1987 was a 7.43 per cent increase in 2014, followed by a 6.04 per cent increase in 2024.
