Property taxes have long been Edmonton\u2019s main revenue source.<\/p>\n
If you wonder why property taxes keep setting new records in Edmonton, don\u2019t just blame inflation for the 6.9 per cent tax increase in 2026.<\/p>\n
User fees \u2014 from free zoo parking to cheap pool memberships \u2014 are pumping up your property taxes. A key municipal revenue tool, they have fallen ever further behind the cost of delivery in Edmonton.<\/p>\n
Over the past 25 years, the cost of city services and attractions has increasingly shifted from user fees to property taxpayers. Stacey Padbury told council\u2019s executive committee a corporate user fee policy is needed to help close the city\u2019s fiscal gap ahead of the 2027-2030 budget cycle.<\/p>\n
Padbury noted property tax revenue grew by 60 per cent from 2016 to 2025, while Edmonton Transit revenue fell 18 per cent over the same period. Recreation and attraction user fees rose just 22 per cent.<\/p>\n
\u201cBecause these two revenue streams have not grown in line with service delivery costs, and because the city is required to balance its operating budget, this has meant that the tax levy has offset the difference resulting in higher tax increases over the entire period,\u201d Padbury said.<\/p>\n
Of course, saying \u201ctaxes versus fees\u201d is like saying \u201cAlien versus Predator\u201d \u2014 who is rooting for either one?<\/p>\n
Show us the numbers<\/p>\n
According to data presented, the city\u2019s revenue mix has steadily shifted over 25 years: from 54 per cent non-tax and 46 per cent property tax in 2000 to 37 and 63 per cent in 2025. The last even split was in 2007.<\/p>\n
The tax base is doing more of the heavy lifting in an apparent effort to keep things affordable for everyone to use.<\/p>\n
\u201cNon-tax revenues for items such as user fees have not grown in line with expenditures, and therefore has placed an additional burden on the amount needed to be collected through property taxes,\u201d said Milap Petigara, the city\u2019s principal policy advisor.<\/p>\n
\u201cWhen non-tax revenues, which include user fees, do not grow in line with expenditures, tax increases need to be higher to ensure the budget is balanced.\u201d<\/p>\n
Who pays, who subsidizes?<\/p>\n
Questions about who pays and who subsidizes what are increasingly in focus at Edmonton city council.<\/p>\n
User fees aren\u2019t intended to generate profit, but to recover all or part of the cost of delivering a public service. The challenge, Padbury cautioned, is balancing financial sustainability with affordability.<\/p>\n
\u201c(Subsidies) also support affordability, as we know that target subsidies will be required to ensure that all Edmontonians are included and have access to city services, so that income barriers don\u2019t limit the accessibility of those services,\u201d she said.<\/p>\n
A user fee policy accompanying the budget would set out key principles. Padbury said user fees are central to financial sustainability, ensuring services can be delivered reliably over the long term. She also said services should remain accessible to all Edmontonians regardless of income.<\/p>\n
Other principles include \u201cbeneficiary pays,\u201d meaning users should cover the cost of services they benefit from, and \u201cequitability,\u201d where costs are shared between the broader community through property taxes and direct users through fees.<\/p>\n
Full cost recovery is not required for services. Instead, partial recovery targets would guide budgeting, Padbury said.<\/p>\n
In addition to general taxpayer subsidies, targeted support could be offered to low-income users so access is maintained on a \u201cbeneficiary pays\u201d basis.<\/p>\n
\u201cWe would not set a target that required a price that would reduce the overall consumer volume at any of our facilities or attractions,\u201d Padbury said.<\/p>\n
Residents shouldn\u2019t expect a flat increase in user fees. Decisions must balance service expansion with pressure on the tax levy, Padbury said.<\/p>\n
\u201cI think we need a starting point to keep us from growing services to the point they\u2019re applying too much pressure, potentially, on the tax levy,\u201d Padbury said.<\/p>\n
Revenue death spiral<\/p>\n
Ward O-day\u2019min Coun. Anne Stevenson raised concerns about a potential \u201cdeath spiral\u201d tied to the elasticity of demand.<\/p>\n
\u201cDo we get to a point where we are increasing prices, which drives down usership, which then drives down revenues further?\u201d Stevenson asked.<\/p>\n
City officials responded that pricing would be structured to avoid that outcome.<\/p>\n
\u201cWe would not set a target that caused the requirement for the prices to be so high that they would push away users and reduce demand. So it\u2019s part of the design, get that balance between pricing and demand correct,\u201d Padbury said, adding that the goal is to balance pricing with expected demand. Noting that setting property taxes and user fees involves ongoing trade-offs that are revisited with each four-year budget cycle. \u201cThese are the tensions that will exist forever.\u201d<\/p>\n
Edmonton Transit is still working through the scenarios for what user fee increases might be; a better picture will be available this summer.<\/p>\n
But don\u2019t expect final numbers on fee hikes without a budget to frame them around.<\/p>\n
\u201cWe want to bring you some information to test things like these principles, but we don\u2019t want to get such specific direction that we can\u2019t do the work. We don\u2019t want to surprise you at budget, but we can\u2019t bring you a fully-baked user fee analysis until we do the budget,\u201d Padbury said.<\/p>\n
Mayor Andrew Knack was hoping for some cost-benefit calculations such as cost of transit service versus wear and tear on city roads.<\/p>\n
\u201cI think my worry is that suddenly cost recovery will become the indicator and everything else will become secondary. And I want to be very clear that I would not want to see a policy that has cost recovery as the primary indicator,\u201d Knack said.<\/p>\n
JCarmichael@postmedia.com<\/a><\/p>\n Related<\/p>\n Bookmark our website and support our journalism:\u00a0Don\u2019t\u00a0miss the news you need to know \u2014 add\u00a0EdmontonJournal.com<\/a>\u00a0and\u00a0EdmontonSun.com<\/a>\u00a0to your bookmarks and\u00a0sign up for our newsletters here<\/a>.\u00a0\u00a0<\/p>\n You can also support our journalism by becoming a digital subscriber. Subscribers gain unlimited access to The Edmonton Journal, Edmonton Sun, National Post and 13 other Canadian news sites. Support us by subscribing today:\u00a0The Edmonton Journal<\/a>\u00a0|\u00a0The Edmonton Sun<\/a>.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Property taxes have long been Edmonton\u2019s main revenue source. If you wonder why property taxes keep setting new…\n","protected":false},"author":2,"featured_media":734822,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[194294],"tags":[49,48,105143,264209,23752,110696,199970,264211,59309,264207,138221,264210,264208],"class_list":["post-734821","post","type-post","status-publish","format-standard","has-post-thumbnail","category-edmonton","tag-ca","tag-canada","tag-city-of-edmonton","tag-city-services","tag-edmonton","tag-edmonton-city-council","tag-edmonton-transit","tag-non-tax-revenues","tag-property-taxes","tag-stacey-padbury","tag-tax-increases","tag-tax-levy","tag-user-fees"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/734821","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=734821"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/734821\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/734822"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=734821"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=734821"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=734821"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}