Ottawa prepares for tax hike and major rise in transit levy, fares

UPDATE: The proposed budget targets passed in a 17 to 8 vote by city council on Sept. 18. City staff were directed to create a draft that follows these guidelines. 

Staff in charge of drafting the City of Ottawa's next budget have given councillors only loose directions for filling a major transit shortfall — with a worst case scenario bringing the equivalent of a 9.9 per cent tax hike.

Mayor Mark Sutcliffe delivered the news in a press conference Wednesday morning in an address that draws heavily on talking points from his ongoing "Fairness for Ottawa" campaign.

Sutcliffe has been making the case since early August that Ottawa is being shortchanged by the Federal government.

He's argued that the Government of Canada is not providing enough money in payments made in lieu of taxes on federal properties and — together with the province — providing less support for Ottawa's ailing transit system than for other cities. 

"I remain optimistic that we will get the help we need," he said. "But if we don't, we'll have no choice but to look at increasing the transit levy, increasing fares, and reducing service."

If the federal government pays up and Ontario follows suit, Sutcliffe is confident that council can keep a tax increase to 2.9 per cent. If not, be prepared to pay much more. 

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Transit troubles

Members of the finance and corporate services committee will consider the budget deliberations at their Monday meeting, which include a number of eye-popping options, including a 37 per cent increase in the transit levy and a 75 per cent hike in fares. 

If councillors were to address transit's full $120-million shortfall with a transit levy, city manager Wendy Stephanson confirmed taxpayers would see the equivalent of a 9.9 per cent increase — similar to Toronto's substantial tax hike last year. 

But Sutcliffe said he doesn't believe councillors will choose to pull just one "lever" in their efforts to balance the budget. He said staff simply want everyone to understand the full scope of potential outcomes. 

"It's not fair at all. None of this is fair to our residents," Sutcliffe said of potential transit cuts. "It's incredibly unfair to our residents that they're paying more than their fair share because other levels of government have not contributed to Ottawa in the same way that they have to other cities, so we don't want to do that."

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Transit commissioner and River ward Coun. Riley Brockington called the numbers "quite shocking" and a reflection of the "very serious fiscal challenges" Ottawa is facing. 

"It does not mean this is what the tax increase or any rate increases will be," he told CBC. "It's simply the direction. And I absolutely will guarantee there will be some modifications." 

'Let's not sugarcoat this'

Capital ward Coun. Shawn Menard, another transit commissioner, balked at the transit options, but said residents need to understand things in the context of ongoing federal negotiations. 

"I don't think that's what we would actually do. So it's not being the most transparent in that way. It's a bit more of a maybe scare tactic," he said. "This is not a plan. This is a worst case scenario on five different areas."

Menard said councillors should instead be reflecting on how to improve service to ensure that ridership rebounds. 

Regardless of how councillors opt to make up the shortfall, Brockington said it's important to remain realistic. 

"This is going to be challenging. Let's not sugarcoat this." 

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Next steps still unclear

Many around City Hall remain optimistic that the federal government provide funding at the 11th hour, with Sutcliffe saying he's been in talks with Liberal MP Jenna Sudds as recently as Wednesday morning. 

"If we do not get funding from the federal, provincial government, we're gonna have to look at the the range of the other choices that we have to compensate for that," transit commission chair and Stittsville ward Coun. Glen Gower told CBC. 

"But we've got 100 days, 100 days approximately between now and when we have to approve a budget for 2025." 

​This is going to be challenging. Let's not sugarcoat this.​​- River ward Coun. Riley Brockington

Coun. David Brown, who represents the rural Rideau-Jock ward and stood listening as Mayor Sutcliffe laid out the situation, said it's important to look at all the options before deciding how much taxes will increase. 

"I don't have a crystal ball," he told CBC. "Lower is certainly better. Mortgages are going up, families are struggling, food is expensive, gasoline is expensive. We need to make sure that we keep Ottawa affordable."

Brown also echoed a call from the mayor for anyone who's concerned to support the city's campaign for federal funding. 

"If you want to make sure that your programs and services are protected, reach out to your MP. Reach out to your MPP. Make your voice heard," he said. "Get Ottawa's fair share." 

The draft budget will be tabled on Nov. 13.