Despite pandemic, city aims to hold property tax hike at 3%

Next year is expected to be another rocky one for the City of Ottawa's transit ridership numbers, public healthcosts and recreation revenues, but staff still plan to craft a 2021 budget that holds property tax increases at threeper cent.

Ottawa's finance and economic development committee set that goalTuesday, which would mean an increase of $115 on the average tax bill for an urban house assessed at $415,000.

Staff will now come up with a draft budget to table Nov. 4, and will base their calculationson the assumption that the federal and provincial governments will come through and cover tens of millions of dollars in costs caused by COVID-19.

Mayor Jim Watson urged council colleagues to keep pressingupper levels of government to "fill that void," and said there appears to be an understanding that they will.

Municipalitiesare not allowed to run deficits.

• City to get $124M in pandemic support
• City facing $192M deficit due to pandemic

The city has also learned that the upcoming second stage of COVID-19 funding willcover transit costs through to the end of next March, a point that hadn't been clear earlier.

Vice-chair Coun. Laura Dudassaid the city couldn't "squander the goodwill" of those governments, however, especially if the pandemic's drag onthe economyrequiressubsidies for another year or two.

"It's setting the tone for the year to come so our residents know we're going into this with a prudent vision ... that we're not thinking we're flush with cash," said Dudas.

Dudas's colleagues ultimately agreed with the motion she put forward, which askedstaff to dig intothe city's operations to look for savingsand also consider which capital projects can be delayed if that government funding doesn't come through.

EquiPassto be frozen for 2021

But somecouncillors sought assurances that delaying work wouldn't lead to extra costs.

Coun. Eli El-Chantirysaid he worried deferring projects would be akin to putting off roof repairs on a house, leading to more expensive fixes in the long term.

Chief financial officer Wendy Stephansonsaid Dudas's motion would guide staff if the city is forcedto look for extra savings, but she also noted staff are already careful not to create extra costs down the road.

While COVID-19 might deal awallop to transit and recreation revenues, and also increasefor cleaning and protective equipment,the city sees a few other pressures, too.

Its insurance costs are rising, it has pegged construction inflation atabout 2.3 per cent, and it is gradually having to increase its employer contributions to theCanadaPension Plan.

The city must still also contribute an extra $5 million to transit capital costs, leading to a higher transit levy of 4.6 per cent on property tax bills. That's because gas tax revenues didn't materialize after the change of government from Kathleen Wynne's Liberals to Doug Ford's Progressive Conservatives.

On the other hand, the Ontario government's earlier plan to have municipalities take ona 30 per cent shareof the costof running public health agencies will not befeltuntil at least 2022, Stephanson said.

Ottawa's 2021 budget will also assume transit fares will rise by 2.5 per cent, although Mayor Watson has directed staff to freeze the low-income Community Pass, EquiPass and EquiFares.