A 13-year quest to fund billions of tax dollars to fix crumbling assets in the wake of dwindled provincial funding got a boost Tuesday.
City council voted to create a dedicated renewal fund reserve to address a $2.8-billion renewal funding shortfall in capital investment over the next three years, a move that will ratchet the tax rate up half a percentage point each year, eventually accelerating to a one per cent hike each year.
And council will get another kick at the can in the fall, when city administration presents an additional “enhancement” to the fund, which would necessitate even more tax hikes.
Discussion about a dedicated renewal fund reserve has been ongoing since 2013 when council asked administration to look into funding options, said Nancy Chow, acting director of budget, planning, and development.
The groundwork was laid in March 2025, when council approved tax levy increases to fund the renewal fund by increases of 0.5 per cent from 2027 to 2029, 0.75 per cent annually from 2030 to 2032, and one per cent annually from 2033 onwards until target funding levels are achieved.
The dedicated renewal fund reserve will be used to fund the renewal of existing city assets as approved by city council through the capital budget process.
The money will be used either to replace the asset with a modern equivalent or to fix it and extend its service life.
The renewal fund can supplement funding for assets already funded through other mechanisms, such as the facility lease renewal and replacement reserve, fleet services, vehicle replacement reserve, and neighbourhood renewal.
“Once the minimum balance is achieved, the funds will be directed to the dedicated renewal fund,” Chow said.
Renewal gap
Ward Anirniq Coun. Erin Rutherford pointed to a current renewal gap of almost 75 per cent.
“It’s not that we’re willfully doing that gap, it’s that there’s no more funding and money to be had,” she said.
“We know we’re seeing the numbers of funding from the provincial government has declined,” she said, noting that highway fund increases are constrained.
“What we really need as a municipality is both this and the province to come to the table with more funding for renewal to really be able to get our assets back where we need them to be, and continue to grow as we know the city will continue to grow.”
Some renewal funds are dedicated from the get-go.
“We obviously have a lot of bridges in the city, and those bridges understandably need to be funded to 100 per cent of their renewal, because we cannot have a catastrophic bridge failure. That money is locked in,” she said.
Competing assets — transit, roads, parks and open spaces, facilities, fleet, Edmonton Public Library, Edmonton Police Service — all have their own renewal demands, she said.
“Does it suck to have to do another dedicated renewal fund where we know that it does put downward pressure on our tax levy? Absolutely. Is it the right thing to do? Because one way or another, we’re going to pay for it. If we don’t actually renew our assets, then we pay on the operational side with more pothole filling, with more breakdowns that require maintenance staff to go out to the facilities to deal with those breakdowns, and ultimately it will lead to the closure of a lot of assets that are well-loved within our city,” she said.
Chow said ideally, 10 per cent or fewer of the city’s assets would be in poor and very poor condition by the end of a 20-year time frame.
If no investment is made in renewal, approximately 70 per cent of the city’s assets would be in poor and very poor condition by 2046, administration said.
‘Enhancement’ could mean further hikes
Ward tastawiyiniwak Coun. Karen Principe asked if administration is recommending increasing the tax levy more than council has already approved.
Chow said the option of an additional level of “enhancement” — an additional tax hike — will be presented to council in fall budget talks.
“The options to enhance the dedicated renewal fund are primarily related to council and taxpayer tolerance of tax levy increases. A temperate approach to balance the risks of deteriorating asset conditions, decline of service levels, safety, and rising maintenance costs is required,” she said.
The dedicated renewal fund takes a step forward towards narrowing the city’s infrastructure renewal gap, but more is required to address the city’s renewal requirements, said Stacey Padbury, deputy city manager for financial and corporate services and the chief financial officer for the city.
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