Ottawa residents are anticipated to face a minimum 2.9% increase in property taxes in 2025, while significant concerns remain about addressing a $120 million deficit in the transit budget. On Monday, the finance and corporate services committee voted 9-3 to approve the budget directions for drafting Ottawa's 2025 budget. Councillors Shawn Menard, Rawlson King, and Jeff Leiper opposed this decision.
The City Council later voted 17-8 in favor of drafting the 2025 budget with the proposed 2.9% tax increase, though several councillors—including Menard, King, Leiper, Laine Johnson, Sean Devine, Theresa Kavanagh, Ariel Troster, and Jessica Bradley—voted against it. Menard expressed concerns about the city's political priorities, stating difficulties in securing funding for community centers and maintaining basic services such as park bathrooms, splash pads, and sidewalk repairs. He criticized the uniform 2.9% tax increase approach, questioning its fairness given the pressing infrastructure issues.
The proposed budget would see a 2.9% property tax increase applied to most city operations, but it does not address the additional transit funding needed. An increase in property tax, combined with a 2.9% rise in the transit levy, is expected to add $125 to the average urban homeowner's tax bill and $268 for the average commercial property owner. Several councillors have voiced concerns about establishing the tax increase before the budget drafting process is completed.
Councillor Jessica Bradley criticized the budget directions as "arbitrary," arguing that they lack strength and fail to truly represent the city's priorities. She noted that the directions are vague and lack concrete figures. Councillor Laine Johnson echoed these sentiments, expressing concern that the current budgeting approach stifles innovative ideas and merely perpetuates the existing dissatisfaction among residents.
The draft budget for the City of Ottawa for 2025 is scheduled to be presented on November 13, with final approval expected on December 11. The Ottawa Police Services Board will also be tasked with preparing a budget that includes a 2.9% increase. To address a $120 million shortfall in the 2025 OC Transpo budget, city staff are considering several options, including a significant increase in the transit levy or fare hikes, should no additional funding be received from the federal or provincial governments.
Among the proposed options are a 37% increase in the transit levy, which would equate to a 7% rise in property taxes, resulting in a total property tax increase of 9.9% for homeowners in 2025. Alternatively, a 75% increase in transit fares could raise the cost of a single ride to $6.60 and an adult monthly pass to over $220.
Mayor Mark Sutcliffe has been advocating for $140 million annually over the next three years from the federal and provincial governments to support Ottawa’s transit system, arguing that the city deserves its fair share of funding. A recent report from the Financial Accountability Office highlights that the Toronto region receives significantly more subsidies per resident compared to Ottawa, with Toronto receiving $191 per resident in 2022-23, while Ottawa received only $59.61.
According to the Financial Accountability Office, Ottawa received $31.91 per resident in provincial funding for the 2024-25 fiscal year, compared to $196.49 per resident in Toronto. This disparity is expected to widen significantly by 2028-29, with Toronto receiving $175.90 per resident, while Ottawa's funding will remain at $31.60. This funding gap includes support for GO Transit in the Toronto area.
Councillor Glen Gower, chair of the Transit Commission, has highlighted the severe impact of potential budget cuts. He stated that reducing the transit budget by $140 million would represent a 14% cut, which could lead to drastic measures such as eliminating service on one day per week. Gower criticized this approach, calling it impractical and detrimental to commuters who rely on transit to reach their workplaces and other essential destinations.
Gower emphasized that the $120 million currently sought is the minimum necessary to address Ottawa’s transit needs and ensure the system's functionality. He stressed that additional funding is crucial for both maintaining and improving OC Transpo services to effectively meet the demands of the city’s residents.
In conclusion, the stark contrast in provincial funding between Ottawa and Toronto highlights a significant and growing disparity that impacts transit services. With Ottawa receiving far less per resident compared to Toronto, the city faces challenging budgetary constraints. Councillor Glen Gower’s concerns underscore the critical need for substantial investment in OC Transpo to avoid severe service reductions that could hinder daily commuting and overall mobility. The $120 million sought is deemed essential to meet the city's transit demands, but addressing the funding gap requires not only immediate action but also long-term solutions to ensure equitable support for Ottawa’s transit system.