Ottawa draft budget 2025: 3.9 per cent tax hike, transit fare increases

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The cost of a bus or train ride will rise next year, all taxpayers will pay more toward OC Transpo, and students — and especially seniors — will get less of a discount under the City of Ottawa’s $4.98-billion 2025 draft budget, which calls for an overall property tax increase of 3.9 per cent for most homes.

That increase meets Mayor Mark Sutcliffe’s budget target set in September to hold the 2025 tax increase to 2.9 per cent in non-transit spending. The cost of OC Transpo is what pushes the total increase to 3.9 per cent.

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Sutcliffe has kept a campaign promise to hold tax increases to 2.5 per cent for the first two years of his term. But the soaring cost of transit, fueled in part by pandemic-related delays and cost increase, as well as a drastic drop in ridership, made a higher tax hike all but inevitable this year.

For the average suburban homeowner, it means an extra $168 on their property tax bill. Of that, $68 is for public transit, $20 is for policing and $80 for all other city services.

The transit budget

The measures “are not decisions we took lightly, but are necessary,” Sutcliffe said Wednesday as he introduced a draft budget that he called “a balanced and responsible way forward.”

The five per cent fare increase will hike an adult fare by about 19 cents, while the transit levy climbs eight per cent. The transit levy is a fee tacked on to all property bills, although the amount is lower for rural residents who receive less service than their urban and suburban counterparts.

The fare increase pushes a single adult fare on OC Transpo to $4, when paying by card, which is significantly higher than other Canadian cities. An adult fare in Toronto is $3.35, in Montreal $3.75, in Calgary $3.70, in Edmonton $3.50 and in Vancouver $3.20.

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OC Transpo fares went up 2.5 per cent in 2024.

“Fares shouldn’t be going up this much,” Capital Ward Coun. Shawn Menard said after the meeting. “It looks that with this increase, the fares are going to be the highest in Canada. Our service is not better than many of the other cities, based on what we’ve seen here.”

Seniors will be hit even harder, with the cost of a senior’s monthly bus pass more than doubling to $108 from the current $49. The U-Pass for post-secondary students will continue, but its cost will rise by $11.45 to $240.52 per semester.

“We’ll continue to have discounted fares for seniors and youth. The discounts won’t be as large as they were in the past. The discounts will be more in line with what they are in other cities,” Sutcliffe said.

The transit increase is needed to meet the $120-million operating deficit OC Transpo faces next year. OC Transpo will cost $856 million next year, an $88 million increase from 2024. There will be no service cuts, Sutcliffe said.

The city is also spending $104 million on roads and sidewalks, another core priority, he said. There’s money for upgrades to the Brian Coburn Extension in the east and Carp Road in the west, as well as funding for more traffic signals at busy intersections that don’t yet have them.

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Social Services

At a budgeted $1.12 billion, community and social services make up the largest piece of the city’s budget pie, coming in at approximately 22 per cent of the city’s spending. That’s partially due to its large scope — covering everything from childcare to gender and race equity to housing and homelessness.

Budget highlights for 2025 include $18.9 million to support construction of affordable supportive housing by local non-profits, and a total of $30 million to be invested in over 100 non-profit social service agencies that address the root cause of poverty.

The city has also earmarked $680,000 for urban Indigenous organizations, and $120,000 to support Black-led youth initiatives.

There are also plans to spend $550,000 on improving Ottawa Community Housing’s safety services. There is $1.2 million for planning, design and community engagement for a “community hub” at 1010 Somerset St., including 150 affordable housing units and 150 market-rate units, as well as parkland, recreation and cultural facilities, an elementary school and childcare facility.

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Sutcliffe said it’s a reflection of the “really, really challenging times” many of the city’s residents are facing.”We’re seeing an increase in the number of homeless people, we’re seeing issues with food insecurity, we’re seeing the opioid crisis and mental health issues play themselves out on their streets. It’s very challenging. We want to do everything we can to support the most vulnerable.”

Sutcliffe said the city will be putting more funding toward food insecurity, even though it’s not traditionally a municipality’s responsibility, “but we see the need.”

The Board of Health is seeking $30.8 million from the city, a 2.9 per cent increase from what the city spent last year. The board will spend $82.7 million next year, with most of that funding — $51.9 million — coming from the provincial Ministry of Health.

Ottawa Public Library

The Ottawa Public Library’s $67.6-million budget makes up just 1.5 per cent of the city’s entire operating budget for 2025, the smallest fraction among all the city’s services. The OPL’s budget is increasing by 2.9 per cent over last year.

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OPL CEO and president Sonia Bebbington said additional investment from the city will be required next year, when the new central branch, Ādisōke, opens.For this year, the average taxpayer’s annual contribution is increasing by $2.55, to total $90.53.

User fees will be increasing 2.5 per cent for meeting room rentals. A highlight of the 2025 budget includes funding for 54 full-time library positions.

For the library’s $9.1-million capital budget, $5 million is earmarked for a funding gap for Ādisōke. There’s also $500,000 in funding from capital reassignments, and $2 million coming from the library’s reserve funds.

Help from above

Since the summer, Sutcliffe has been lobbying for money from the federal and provincial government through his “Fairness for Ottawa” campaign — so far with limited success.
The transit budget includes a $36-million “placeholder” that Sutcliffe hopes will be money coming from higher levels of government.

“Obviously, I’m not standing here with cheques from the other two levels of government,” he said. “I can tell you, however, that we are making progress. I hope there will be more news in the coming weeks.”

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That help is “absolutely critical” for the city, Sutcliffe said.

Sutcliffe echoed a call by the Canadian Federation of Municipalities that cities receive a share of the harmonized sales tax. An average homeowner pays close to $10,000 a year in HST, Sutcliffe said, dwarfing the amount they pay the city in property taxes, he said.

“If we were to receive even a small portion of HST in the future, it would provide a source of reliable, sustainable funding for transit and other priorities.”

Somerset Ward Coun. Ariel Troster was one of eight councillors who opposed Sutcliffe’s 2.9 per cent target in September, saying it was unrealistic given the demands on the city’s social support programs, but she backed the mayor’s call for help from the provincial and federal governments

“Other levels of government have given us no choice but to play this kind of game every year and it’s super frustrating,” Troster said after the meeting. “We absolutely need municipal finance reform. Every year we play this cat and mouse game and every year we have to go to them cap in hand.”

Budget deliberations will continue over the next month at the committee level with the final budget coming to council for approval on Dec. 11.

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