Eye-popping Saskatoon budget update 'not the final number': city councillor

The idea of an 18.56 per cent tax hike to cover the City of Saskatoon's budget shortfall is "unacceptable," says the federal director of the Canadian Taxpayers Federation.

"I don't know how taxpayers are going to afford something like that," Franco Terrazzano said on Friday, reacting to news of the city's $52.4-million shortfall for next year's budget and another $23.2-million forecasted shortfall for 2025.

On Wednesday, the city released a budget status update for its next multi-year budget, saying that without changes, the property tax would need to be hiked 18.56 per cent in 2024 and another 6.95 per cent in 2025 to cover the funding gap.

In a news release, the city cited inflation and lower post-pandemic revenues as reasons for the "unprecedented" revenue gap.

Terrazano pointed to the same inflationary pressures being why residents can't afford the "eye-popping" property tax hike.

"City councillors, they better be spending their summer months going line by line in the budget to find the necessary savings," Terrazzano said.

Jason Aebig, CEO of Saskatoon Chamber of Commerce, said while it's not abnormal to see high potential tax hikes in preliminary budget numbers, he found the figures "alarming."

"The magnitude of the tax hike — if nothing was done — would obviously overwhelm the vast majority of businesses," he said.

Aebig said he doesn't expect council to land on 18 per cent and said people shouldn't panic. He called on city council to consider investing in initiatives that expand the tax base, temporarily reducing operating hours for non-essential services, cutting unnecessary jobs and potentially increasing user fees in places where applicable.

He also noted a high property tax increase could lead to less spending from homeowners in the local economy.

In a media briefing, chief financial officer Clae Hack said the administration is not recommending any specific budget cuts or property tax rate hikes at this point.

He said the biggest reasons for the funding gap are inflation, budget adjustments and the cost of city growth and expansion, including:

"I think it was a little reckless of administration to throw those figures out there until some more work has been done to mitigate the impact of inflation and the other factors," said Ward 1 Coun. Darren Hill.

"They have put fear into many citizens of Saskatoon."