Budget Frequently Asked Questions (FAQ)

The City is in a stable financial position thanks to robust financial policies and practices, including:

• Reserves to stabilize our finances by supporting one-time pressures on our operating budget. The Financial Stabilization Reserve (FSR) was used to offset recent deficits as well as one-time pressures during the pandemic.
• Budget practices that help us manage ongoing costs like fuel, utilities and labour that can fluctuate significantly in a 4-year cycle.
• A strong AA+ credit rating, which shows the City is managing its finances prudently and has the capacity to meet its financial commitments. Our credit rating provides the City access to lower long-term borrowing costs to help pay for some construction projects.

While the City’s finances are stable, we are facing both short-term and long-term challenges. The City is transparently identifying financial challenges and recommending solutions to deal with them. Budget challenges are shorter-term term and the fiscal gap is longer-term.

For the past few years, the City’s budget adjustments have focused on responding to budget challenges:

• Inflationary pressures: After a prolonged period of elevated inflation, price pressures have come down for many goods and services. Despite this development, the cumulative effect of inflation in recent years has left prices at much higher levels, which has affected the City across the board, from parts to fuel to staffing costs, making it much more expensive to deliver the same services.
• Rapid population growth: The trajectory of population growth between 2021 and 2024 was unexpected. Edmonton experienced a 0.4% annualized population growth between 2020 and 2021, and accelerated in subsequent years to reach 5.7 per cent between 2023 and 2024, which was its highest level since at least 2002. That trajectory translated to much faster growth in the demand for City services and need for new infrastructure. And while a growing property tax base adds to the City’s revenues, that growth may not fully cover the additional costs.
• Changing service needs: Edmontonians’ service needs have also evolved. They’re using transit differently, for example. And we are tackling emerging issues like extreme weather, encampments and social disorder. This is affecting both our costs and our revenues. 

While we planned for a lot of these pressures, they’re much bigger than what we forecast when we developed the budget in 2022. These challenges contributed to the City’s deficits in 2023 and 2024, and they continue to impact our finances. We need to make changes to our budget to bring it in line with what it actually costs to deliver services now.

Like many Edmontonians who are facing higher costs, we have to make some tough choices about the money we have coming in and how we’re spending it. We have to increase our revenues, which are mostly limited to property taxes and user fees, and we have to reduce our spending, through efficiencies and service reductions.
 

Structural budget variances are recurring deficits or surpluses within programs that can be attributed to an event or circumstance that fundamentally changes business operations. Longstanding unfavourable budget variances in programs result when revenue collected falls short of budgeted levels or the actual cost to deliver services at their stated levels exceeds the funding allocated.

As of Q3 2025, Administration has $52.3 million in structural budget variances remaining. Of the $52.3 million, $13.4 million have been addressed through the fall supplemental operating budget adjustment (SOBA) , with no impact to tax payers. On November 25, Administration will provide updates on action plans to address the remaining $38.8 million. For the final year of the four-year budget, the City is focused on addressing these variances and the repayment of the FSR, in order to begin the 2027-2030 budget cycle on a strong foundation. 

Though the City has strong financial practices and is in stable financial condition, it is facing significant fiscal pressures, which means that the City’s ability to generate revenues (the money we expect to take in) has been falling short of spending needs. This is referred to as a fiscal gap. There is no single solution that can fix the fiscal gap and not all of it is in the City’s control, but the City is taking action to help close it. This includes increasing revenues, reducing spending and advocating for different fiscal arrangements from other orders of government.

Council approved the Fiscal Gap Strategies Work Plan on March 5, 2025. The plan calls for continuing work to prioritize services based on what’s most important to maintaining Edmontonians’ quality of life, and evaluating and prioritizing capital construction needs.

It also sets out actions to grow our revenues and reduce our spending needs, including:

• Growing the non-residential tax base in our city limits.
• Evaluating non-tax revenue streams like user fees to ensure they’re keeping pace with the cost of service delivery.
• Continuing our work to prioritize services, focusing on core municipal services that are most important to maintaining Edmontonians’ quality of life.
• Evaluating and prioritizing our capital needs to find the best balance between managing a growing renewal deficit and building the new infrastructure we need as the City welcomes a million more residents.
• Evaluating our policies and prioritizing strategic goals given our financial constraints.

City administration has gone through a series of intensive budget reduction and efficiency exercises over the past decade to keep tax increases as low as possible. It’s part of our normal processes to find cost savings and efficiencies. Since 2015, these efforts have resulted in a cumulative savings of 1.9 billion dollars and reduced our required tax increases by 21.5%.

In this budget cycle, the OP 12 amendment reduced the City’s operating costs by $15 million a year from 2023-2026, which reduced our recommended tax increases by about 1%.

Through the fall 2024 budget deliberations, Council limited property tax increases in 2025 by:

• Approving recommendations that included $18.5 million in savings, including $8.5 million in ongoing savings to limit the tax increase and $10 million in one-time savings to help replenish a key reserve, the Financial Stabilization Reserve.
• Accepting Administration’s recommended $8.5 million in ongoing savings, including a lot of small changes including savings in contracts, materials and equipment, which helped minimize the impact on services. It also includes service changes, like slowing down the Heritage Program.
• Using the $8.0 million increase in the EPCOR dividend and the $9.7 million increase in franchise fee revenue to lower the tax levy.
• Using the LRT Reserve to offset the projected transit revenue shortfall for 2025 and 2026.
  Reducing the annual transfer from the operating budget to fund capital projects, known as Pay-As-You-Go, by $15.0 million. 

In spring 2025, Council reduced the tax increase by 0.4% for both 2025 and 2026. This is a result of changes in the provincial budget that partially restore Grants in Place of Taxes (GIPOT) payments. GIPOT is the program that provides municipalities a grant in place of property taxes for Government of Alberta properties (e.g. the Alberta Legislature).

The fall 2025 supplemental operating budget adjustment (SOBA) also includes $1.9 million in ongoing reductions from an internal reallocation exercise across the organization to limit the tax increase. While most adjustments individually do not have a significant financial impact, the cumulative impact is intended to balance the trade off between minimizing service level disruptions, addressing structural budget variances and improving ongoing financial sustainability, and limiting the tax increase.

The capital budget is about what the City builds and includes funding for new infrastructure as well as maintenance of existing infrastructure Edmontonians use every day. The approved $11.2 billion capital budget includes projects like:

• $2.6 billion for the Valley Line West LRT Extension
• $1.4 billion for the Capital Line South LRT Extension
• $515 million for the Yellowhead Trail Freeway Conversion
• $309 million for the Lewis Farms Facility and Park Project
• $200 million for the High Level Bridge Rehabilitation
• $171 million for Housing Accelerator Fund Projects
• $13 million for the William Hawrelak Park Rehabilitation
• $100 million to fund the Active Transportation Network Expansion

The 2023-2026 capital budget includes over $2 billion in renewal projects - these are projects that are focused on maintaining the infrastructure we already have including:

• High Level Bridge rehabilitation
• Hawrelak Park rehabilitation
• Light rail vehicle replacement

We are working to balance the need for new infrastructure as we grow as a city with the need to maintain what we've already got. This is one of the challenges rapidly growing cities like ours face. The City has millions of assets, with a total replacement value of $41.3 billion. That’s a lot to maintain! Our ideal renewal investment needs over the 2023-2026 capital budget would cost about $3.6 billion.

Like many Edmontonians, we are making the most of our available resources and prioritizing the most important renewal projects. While this is necessary, it isn’t sustainable in the long term. At some point, we will have to invest more to maintain our existing infrastructure. We will also likely need to make some tough choices about some of our older infrastructure, especially ones that may be nearing the end of their lifespans.

The operating budget is about the programs and services the City will deliver to Edmontonians from now through 2026. The tax-supported operating budget will increase from $3.4 billion in 2023 to $3.9 billion in 2026. Council also added to our operations in the 2023-2026 budget. By 2026, the operating budget will include over $186 million in new funding for programs and services such as increased affordable housing funding, increased transit service, energy transition and climate adaptation initiatives. The majority of the operating budget goes towards maintaining existing services in the face of rising costs, but Council has made some additions to the budget too. Over the four-year budget cycle, there is over $591 million in additional funding for programs and services like increased affordable housing funding, increased transit service, energy transition and climate adaptation initiatives.

The operating budget delivers 70 services to Edmontonians, including maintaining the roads and public transit that move people; police, bylaw and fire rescue services to keep people safe; and attractions, leisure activities, parks and social programs that make Edmonton a great place.

On April 22, 2025, Council approved a 5.7%  municipal property tax levy increase for 2025. This will affect property owners differently, depending how their property’s assessed value compares to the overall housing market. A typical household with a 2025 assessment of $465,500, will pay $296 per month to help fund those services.  

On December 5, 2024, Council approved property tax increases of 6.1% in 2025 and 6.8% in 2026, along with $8.5 million in ongoing savings. The budget is reviewed and adjusted each year in response to significant changes. On April 22, 2025, Council approved a 6.4% municipal property tax increase for 2026. This approved increase is 0.4% less than what Council approved in December 2024 as a result of the changes in the provincial budget that partially restore Grants in Place of Taxes (GIPOT) payments.

Council will deliberate and confirm the 2026 property tax increase in December 2025. 

Before Administration sets a tax increase, we look at efficiencies and savings internally. Since 2015, we’ve found an accumulated $1.9 billion in savings without significantly impacting the 70 services Edmontonians rely on every day.

This budget cycle, a Council savings exercise known as OP-12 removed $15 million a year from the 2023-2026 operating budget.  

To limit the tax increases in 2025 and 2026, Council approved several budget changes in December 2024, including:

• Accepting Administration’s recommended $8.5 million in ongoing savings, which includes savings in contracts, materials and equipment, which helped minimize the impact on services, and some service changes like slowing down the Heritage Program.
• Using the $8.0 million increase in the EPCOR dividend and the $9.7 million increase in franchise fee revenue to lower the tax levy.
• Reducing the annual transfer from the operating budget to fund capital projects, known as Pay-As-You-Go, by $15.0 million. The City will develop a longer-term plan to restore these funds, which will be presented to Council next year.

The fall 2025 operating budget adjustment also includes $1.9 million in ongoing reductions from an internal reallocation exercise across the organization to limit the tax increase. While most adjustments individually do not have a significant financial impact, the cumulative impact is intended to balance the trade off between minimizing service level disruptions, addressing structural budget variances and improving ongoing financial sustainability, and limiting the tax increase.

Costs have risen much higher and faster than we forecast when we made our 4-year budget in 2022. It’s costing much more to deliver the same services now and we need to respond. Recent budget adjustments have been focused on responding to the high costs to maintain services, as well as rapid population growth and the changing service needs of Edmontonians.

The carbon budget informs our transition to a low-carbon city. The City is one of the first cities in North America to present a carbon budget alongside our financial plans.

Unlike the proposed capital, operating and utility budgets, Council does not deliberate or approve the carbon budget. The carbon budget is a tool that shows the greenhouse gas (GHG) impacts of budget requests. This allows Council to weigh climate change impacts when making financial decisions.

It also allows the City to measure and track progress against Edmonton’s emission targets, so we know how we’re doing and what we need to change.

The 2023-2026 budget includes more than $372 million dollars in services and construction that support our transition goals. 

The City established community and corporate carbon budgets as part of the Community Energy Transition Strategy, which was approved by Council in April 2021. The strategy sets out our goals of being carbon neutral as a corporation by 2040 and as a community by 2050.

The carbon budget gives Council greenhouse gas emission impacts to consider alongside the financial impacts of the capital, operating and utilities budgets. The carbon budget evaluates the emissions impacts of around 200 items in the approved budgets. 

The 2023-2026 budget includes recommended funding for projects that will reduce GHG emissions by 180,000 tonnes carbon dioxide equivalents (CO2e) over the 4-year period for the City. 

The majority of the climate initiatives funded in the 2023-2026 budget cycle remain in the carbon budget and aren’t significantly impacted by the 2025 fall budget adjustments. 

The carbon budget makes it clear just how much needs to be done to meet Edmonton’s emission targets. Without further action, our updated forecasts show that we’ll deplete both our corporate and community carbon budgets by 2032 and 2036 respectively.

The carbon budget highlights that climate change is a collective problem that will take collective action. The City is actively working to reduce emissions (including investing more than $376 million in services and construction projects in the 2023-2026 budget that will support these efforts), but to be carbon neutral by 2050, it will take a much larger collective effort, including collaboration and support from other orders of government, private investment and the actions of all Edmontonians. 

The 2023-2026 budget includes over $372 million in new funding for services and construction projects that will support the City’s energy transition efforts. This includes $100 million for the Active Transportation Infrastructure Plan, $53 million for energy retrofits of City facilities, $34.5 million for development of district energy networks, $11 million for an emissions-neutral fleet and $6.5 million for natural areas acquisition.

We’re also integrating carbon into our budgeting process, so Council can weigh both the carbon and financial impacts of financial decisions. We’re one of the first cities in North America to do a carbon budget like this. The Carbon Budget makes it clear that further action is needed to achieve community and corporate carbon emissions targets.