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The City of Ottawa is drafting the 2021 budget with a three per cent property tax increase, but the COVID-19 pandemic could impact the city's bottom line next year.

The Finance and Economic Development Committee will vote Tuesday on a report outlining the timetable for the 2021 budget and provide directions. The draft budget will be presented on Nov. 4.

The report recommends the city draft the budget with the three per cent property tax increase approved by Council at the start of the term. The transit levy would increase 4.6 per cent to replace the cancelled provincial gas tax increase.

If Council approves the 2021 budget with a three per cent property tax hike and the higher transit levy, the average property owner would pay an extra $115 in property taxes next year. Rural homeowners would pay an extra $88.

OC Transpo fares are also expected to increase 2.5 per next year.

However, staff warn the COVID-19 pandemic and the restrictions will continue to hit the city's finances next year. The city is anticipating a reduction in the transit and recreation revenues as ridership and recreation program registration is not expected to return to 100 per cent in 2021.

The COVID-19 measures means many people are still working from home, and there are social distancing measures in place for recreation and arts programs.

Staff are also preparing for the possibility the upper levels of government may not cover the full amount of the 2020 budget deficit.  The federal and Ontario governments have already committed to covering $124 million of the $181.8 million 2020 City of Ottawa deficit.

Staff say the city will submit an application for Phase 2 funding under the Safe Restart Funding to cover the rest of the budget shortfall.

"If the funding does not materialize in 2021, staff will prepare mitigation measures that could include use of city reserves, possible reductions in essential and non-essential services and various mitigation measures for consideration by Council," said the report.

The city is also expecting the COVID-19 pandemic will increase costs for cleaning, personal protective equipment and staffing to meet service delivery requirements.