'It just doesn’t make sense': Chamber urging Saskatoon city council to vote against tax increase

With the city council set to vote next week on additional tax increases, the Saskatoon Chamber of Commerce has written a letter hoping to sway against an increase.

The city originally approved a 3.53 per cent property tax increase for 2023, but a report released on Wednesday is calling for it to be bumped up to 4.38 per cent. The increase would add $2.28 million to the city’s operating budget.

In a letter penned on Tuesday, Chamber of Commerce CEO Jason Aebig urged three other options it hopes the city council will consider next week during budget deliberations: to freeze the 3.53 per cent increase planned for 2023, act on cost reductions and options proposed by the city administration to bring the budget back to balance, and to defer hiring 30 full-time positions to address the city’s budget shortfall

Aebig says business owners have based their plans on the 3.53 per cent property tax increase and that another increase would create “unnecessary instability” as many small and medium-sized businesses are in “recovery mode” after the pandemic.

“Let’s not layer on now an additional increase. It just doesn’t make sense,” Aiebig told CTV News.

In October, the city warned it was facing a shortfall of $8.3 million because of COVID-19 and inflation costs. Aebig suggests the current deficit challenge the city is facing isn’t an income problem but a spending problem.

Aebig says 59 per cent of the city’s operating costs are for staff salaries and payroll costs. He says deferring hiring would help close the budget gap.

RUNNING OUT OF OPTIONS  

Ward 6 City Councillor Cynthia Block says Saskatoon’s commercial property tax is either the lowest or second lowest in the country, while residential property tax ranks “in the middle of the pack” compared with other prairie cities.

Saskatoon’s Chief Financial Officer Clae Hack says one-time funding will get the city through 2023, but beyond that, they’re running out of options.

“There’s all sorts of reserves we could take this money from, but we would literally be using our savings to pay like a mortgage because it’s ongoing,” Block told CTV News.

Block says in 2021 administration was asked to find $7 million in savings and was able to find $5 million.

“That did come about because there were freezes on hiring and deferring of hires and deferring training and, in many cases, limiting travel entirely,” she said.

Budget deliberations are scheduled to begin at 1 p.m. at city hall from Monday to Wednesday next week.