Ottawa residents are facing a 3.9 per cent property tax increase in 2025 along with a 5 per cent hike in OC Transpo fares as the city looks for ways to fill a $120 million hole in the OC Transpo budget.
Mayor Mark Sutcliffe announced the 2025 City of Ottawa budget to be tabled Wednesday will include a 2.9 per cent property tax hike for “most city services,” while the transit levy will increase eight per cent which equals an additional one per cent tax hike.
“We must strike the right balance. This budget is a balanced approach to our residents needs,” Sutcliffe told reporters.
“It invests in the core priorities that matter most to our residents: public safety, public transit, roads and sidewalks, housing and supporting the most vulnerable.”
Sutcliffe says the 2025 budget includes a “historic investment” in public transit, with OC Transpo’s budget increasing $88 million to $856 million. The city plans to open both the Trillium Line and the eastern extension of the Confederation Line over the next 12 months.
However, Sutcliffe says “tough decisions on how to fund transit” had to be made while the city waits for information on whether the federal and Ontario governments will provide new funding for public transit.
“While we wait for more sustainable funding solutions, we’re going to have to do a lot of patchwork and use a lot of duct tape to get through budget year,” Sutcliffe said. “These solutions aren’t always ideal; many of them are one time answers that will help us only in 2025, but in the current climate that’s what we need to do.”
The mayor says the 2025 budget will increase the transit levy by eight per cent, which equals an additional one per cent tax increase. OC Transpo fares will increase five per cent, and adjustments will be made to discounted fairs to “bring them in line with those in other cities.”
Sutcliffe says a $36 million placeholder is in the budget for possible funding from the upper levels of government for public transit. In August, the mayor launched his Campaign for Fairness, calling on the upper levels of government to help address a $120 million budget shortfall in 2025. The mayor is calling for $140 million in funding over three years to support public transit.
Other investments in 2025 budget
Sutcliffe says the 2025 City of Ottawa budget will include funding to hire 100 new emergency responders, including 50 staff for the Ottawa Police Service, 23 new paramedics to increase service and reduce the impact of offload delays, 22 new firefighters and 10 new bylaw officers.
The mayor says the 2025 budget will invest $104 million to improve roads and sidewalks, including $89.6 million to repair and resurface roads and $14 million for new and existing sidewalks. The city will also spend $20.5 million over the next two years to reduce the backlog of work to install traffic signals.
Some community groups have urged the city to consider other revenue raising tools, including raising property taxes and parking fees. The groups are seeking expanded funding for public transit and affordable housing.
Other Canadian cities have faced significant tax hikes in 2024, including Toronto: 9.5 per cent, Vancouver: 7.5 per cent, Edmonton: 8.9 per cent and Calgary: 7.8 per cent.
The mayor says $54 million in savings have been found in the 2025 budget, and a hiring pause and a discretionary spending freeze remain in place.
“We’ve made tough decisions about how we spend money at the city,” Sutcliffe said. “We’ve found $208 million in savings and efficiencies since the start of this term of council, that’s less than two years ago.”
The mayor says $208 million in savings is the equivalent of a 10.5 per cent tax increase, and those savings have been invested into the city’s priorities.
Councillors will discuss and debate the draft budget on Wednesday and during committee meetings over the next three weeks before its final approval on Dec. 11.