Saskatoon city council shaves $23M off budget shortfall but it's not enough to avoid tax increase
Small businesses would be harmed by big property tax hike, says spokesperson
Saskatoon's mayor and city councillors still have a lot of work to do after wrapping up their second special budget meeting on Tuesday.
City council was able to shave $23 million off a $72 million budget shortfall over the next two years.
That still leaves shortfalls of about $29 million in 2024 and $20 million in 2025 that council will attempt to address at a third special budget meeting planned for Aug. 15.
If the remaining shortfall is not addressed, residents could see a property tax increase of 10 per cent in 2024 and a 6.2 per cent increase in 2025.
On Tuesday, council voted to bump up parking fees by 50 cents an hour, which is expected to result in an extra $1 million in revenue.
It also agreed on an additional 15-cent convenience fee to use its parking app.
Ward 1 Coun. Darren Hill was the sole vote against that decision.
"It appears low-hanging fruit that the administrations picks simply to find a dollar amount without enough engagement for the user group and studies and conversations with the [Business Improvement Districts] for the impact of [COVID-19] and the turnover in parking we're seeing and struggles that exist within those areas," he said.
The North Saskatoon Business Association's executive director, Keith Moen, said the city's finances have become a topic of conversation by those who "normally don't give a hoot" about civic politics.
He urged council to listen to the recommendation put forward by the association, even though they've previously fallen on deaf ears.
"In other words, you've stepped in it big time and everyone is watching," Moen said.
He urged council to reduce staffing by ten per cent which would require cutting dozens of jobs and pausing construction on the downtown arena and new library.
Council did not approve the group's recommendations, but passed a motion to not increase spending on services like fire, snow removal and transit that grow with inflation.
Instead, the money will be added back to the operating budget in 2026.
Saskatoon's budget will be finalized at a meeting in November. Further special budget meetings could be scheduled before then.
Uncertainty for small businesses and residents
Brianna Solberg, the legislative affairs director for the Canadian Federation of Independent Business, spoke with Candice Lipski on CBC Radio's Saskatoon Morning, discussing the concerns small businesses have with the budget shortfall and property taxes.
"Property taxes are particularly harmful to small business because they are profit insensitive," said Solberg, "meaning business owners have to pay them even if they aren't bringing in any revenue and 53 per cent of Saskatchewan small businesses indicate that property taxes are the most harmful."
Higher property tax rates could cause businesses to lay off staff or raise prices — or, worst of all, Solberg said businesses could close their doors for good.
Solberg said she thinks the city needs to prioritize essential services, such as the police service and road repairs.
Gage Haubrich, prairie director of the Canadian Taxpayers Federation, also spoke with CBC Radio's Saskatoon Morning, and said residents were probably a little shocked to learn how dire the city's funding gap is.
"If you look at it compared to Regina, the City of Saskatoon spends about $400 more per person than Regina does," Haubrich said.
"Some of that comes from our own utility, but some people don't know where that extra money is going and it kind of caught them blindsided when they found out they might have to pay this extra property tax hike."
Haubrich said a property tax increase near seven per cent would be more reasonable because it would roughly match the rate of inflation in 2022.
"That would still put a crunch on families, but it would be much better than what they are currently facing right now."
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with files from Saskatoon Morning, Aishwarya Dudha, Liam O'Connor