Common Budget questions

Last updated: April 25, 2023

Common questions about the municipal budget process can be found below.

What can residents expect in terms of a tax adjustment in 2023/24?

On April 25, 2023, Regional Council has approved the 2023/24 municipal budget of $1.2 billion – including an operating budget of $979.6 million (total municipal expenditures) and provincial mandatory contributions of $192.2 million – as well as a capital plan of $333.3 million.

The average residential tax bill is increasing by 5.9 per cent. The average single-family home tax bill will increase by $128 in 2023/24 to a total of $2,288. Due to the increase in property assessment values, the municipal residential tax rate will decrease from 0.794 to 0.760.

Municipal tax-supported debt will remain stable at approximately $194.5 million in 2023/24, with tax supported debt servicing costs under five per cent of revenues, which is well below provincial guidelines for debt management.

A new commercial taxation policy came into effect on April 1, 2023, changing the way that commercial property taxes are calculated going forward. Geographical tax boundaries for commercial properties will change from the previous urban, suburban and rural areas to one of five new tax areas, which are listed in Administrative Order 2022-003-ADM, Respecting Commercial Property Taxation in Certain Areas of the Municipality. As well, for each tax area, rates will vary by assessed value of the property, within three tiers of assessment. The rates for each tier and tax area will be updated on halifax.ca/taxrates by April 26.

The Property Tax Exemption and Deferral Program, part of the Affordable Access Program, offers homeowners assistance with paying property taxes. Through the program, residents can apply for a property tax exemption, rebate, deferral of current year property tax and deferral of local improvement charges. There are also payment plan options that can assist taxpayers with personal budgeting.

The municipality’s approach to the budgeting process was to adjust to, and balance, the demand and cost of services, while remaining fiscally responsible. These increases are in line with inflation and reflect the resources required to carry out the priorities of Regional Council.

For more detailed information on the municipal 2023/24 Budget, visit: halifax.ca/budget.

What do taxes pay for?

The annual municipal budget funds all costs associated with servicing a growing municipality. This includes day-to-day municipal operations (for example, transit, police, fire, garbage collection, snow clearing, staffing costs), capital priority initiatives approved by Regional Council (for example, HalifACT, Cogswell District project, Integrated Mobility Plan), as well as capital projects and investments to purchase, construct, rehabilitate and replace municipal assets such as buildings, roads, active transportation, parks and bridges.

What are some key highlights from the approved 2023/24 Budget?

Guided by the municipality’s vision and mission, the 2023/24 Budget is a reflection of Regional Council's strategic priorities and smart investment, prioritizing the needs of residents as well as ensuring that the needed resources are in place to meet their expectations.

The 2023/24 budget invests in critical areas such as transportation, public safety, infrastructure management and addressing climate change. By doing so, the municipality is creating a foundation for sustainable growth and development in our region.

Key programs and capital projects include:

Halifax Transit
• Electric bus procurement and Ragged Lake Transit Centre expansion – $40.7 million
• Burnside Transit Centre eco‐rebuild – design phase – $20.8 million

Environment
• HalifACT projects (for building retrofits, adaptation, etc.) – $20.7 million
• HalifACT seven new staff positions – $412,000

Community safety
•   15 additional rural fire fighters – $137,000
•   New Community Safety business unit created – $400,000
•   Framework for Addressing Homelessness – $1.1 million
•   New Navigator position – $125,000
•   Bedford West fire station – $16 million

Transportation
• Cogswell District project – $35.6 million
• Integrated Mobility Plan projects – $45.8 million

Recreation and community
•   Affordable access to recreation programming – $500,000
•   Community action planning for African Nova Scotian communities – $300,000
•   Arts grants funding increase – $100,000
•   Halifax Public Libraries’ collections – $300,000
•   Park recapitalization – $6.8 million
•   Park land development – $1.4 million

Can you tell me more about the new commercial taxation policy?

What is the annual Budget Direction report (formerly known as the Fiscal Framework)?

The 2023/24 Budget Direction report was presented to Budget Committee on Friday, November 25, 2022.

The Budget Direction, formerly known as the Fiscal Framework, is presented annually to Regional Council with recommendations for tax and non-tax revenues to accommodate changing operational costs, capital investments, as well as debt and reserve changes. It is also reflective of on-going and emerging opportunities and challenges.

The Budget Direction sets the underlying assumptions that each business unit will build their proposed Operating and Capital Budget on.

Why didn’t you achieve a 4.0 per cent increase to the average residential tax, as directed in the 2023/24 Budget Direction report (presented on November 25, 2022)?

As outlined in the 2023/24 Budget Direction report, the Budget Committee directed the Chief Administrative Officer (CAO) to develop the 2023/24 Budget according to Regional Council's approved priorities and preliminary fiscal direction.

This included a 4.0 per cent increase to the average residential and commercial property tax bill, by preparing proposals for reductions to the operating budget and using one-time expenses to offset costs in the current fiscal year if matched with an operating budget reduction in subsequent years.

As such, on November 25, 2022, Budget committee requested that staff come back with proposals on how the municipality could proceed with a 4.0 per cent increase to the average tax bill.

Based on Budget Committee’s direction for proposals to achieve a 4.0 per cent increase, staff returned on January 25, 2023, to present the 2023 Budget Direction, Assessment, and Revenue Update. During this meeting, staff provided an update on the Budget Direction, Tax Revenues and the PVSC Assessment information with how it relates to the municipality’s property taxes.

All business units spent several months identifying areas where reductions could be implemented, while recognizing the need to provide services to a growing municipality. Staff identified nearly 100 reductions while creating the initial the 2023/24 Budget Direction report. Close to 40 of these reductions were straightforward and have been built into the budget. The remaining nearly 60 reductions were put forward for Regional Council's consideration.

Throughout the budget process, each business unit presented their proposed budget, and the Budget Committee had the opportunity to review each of the proposed reductions, as well as the opportunities for investment.

Following the Budget Adjustment List meeting on March 29, 2023, the Budget Committee approved the reductions and investments, resulting in an increase to the tax rate of 5.8 per cent.

On April 25, 2023, Regional Council approved the 2023/24 municipal budget of $1.2 billion – including an operating budget of $979.6 million (total municipal expenditures) and provincial mandatory contributions of $192.2 million – as well as a capital plan of $333.3 million.

What have been some of the pressures on this year’s 2023/24 Budget?

The 2023/24 Budget Direction report was designed in the face of significant inflationary pressures, some of which include:

• Population growth – The municipality’s population is expected to reach half a million residents before the end of the decade. This growth brings tremendous opportunities for the region, as well as new homes and residents that require municipal services. There is also an expectation of a higher level of servicing across the entire municipality.

• Deed Transfer Tax revenue decreases – Recently, the municipality has been relying on the revenue from the Deed Transfer Tax to mitigate otherwise larger tax increases. Over the last few years, the Deed Transfer Tax has represented a greater proportion of the municipality’s tax revenue than has been seen since amalgamation. Compared to five years ago, the Deed Transfer Tax has doubled as a percentage of the municipality’s tax revenue. In 2022/23, it represented 12.8 per cent of total tax revenue. However, the Bank of Canada has increased interest rates to counter inflation, resulting in a cooling housing market which has had a negative effect on Deed Transfer Tax revenues. For the first time in five years, it is expected to decrease and continue to decline. The municipality can no longer continue to rely on this variable source of revenue to offset otherwise necessary increases to property tax.

• Operating pressures increasing – Inflation is causing all expenditure categories to increase. Together, with the impact on wage demands and the labour shortages, hiring the people that the municipality needs to deliver services remains challenging. Simultaneously, the cost of fuel, goods and services have all risen dramatically.

• Available reserves balance nearing capacity – While reserve balances remain strong, most are committed to current or future Capital or municipal Strategic Initiative (SI) projects, and little funding capacity remains to respond to unexpected issues or opportunities.

• Strategic Initiatives and climate action – Significant strategic city building programs, such as HalifACT and the Integrated Mobility Plan (IMP), are not fully funded within existing capital budget levels. In the 2022/23 Budget, there were actions taken to begin funding these initiatives. The Strategic Capital reserve was created to accumulate the funds that will be used to pay the principal and interest on the debt that will be issued to fund these Strategic Initiatives. Additionally, the Climate Action Tax (CAT) was passed with the goal of funding the first four years of HalifACT projects. Increasing project costs, as well as increasing debt borrowing costs will require future tax increases to complete these projects. This is why staff are recommending maintaining current levels of funding to the SI projects.

• Debt is a limited tool – Unlike other levels of government, the municipality is legislatively bound to approve a balanced budget and is not able to use debt to fund its on-going operations. Decreasing capital from operating – meaning funding of capital projects from taxes – will only result in projects being cancelled or delayed, primarily projects focused on maintaining existing assets in a state of good repair.

As a result, the 2023/24 Budget Direction report was designed to address three key areas:

• coping with expenditure growth;

• maintaining a path toward fiscally sustainability; and,

• maintaining funding for Strategic Initiatives and base capital funding.

What have been the Capital Budget challenges for 2023/24?

Similar to previous budgets, the Capital Budget faced several challenges:

• Rapid population growth and demands for additional services are adding pressure to this imbalance. This growth brings tremendous opportunities for the Halifax region, as well as new homes that require municipal services. There is also an expectation of a higher level of servicing across the entire municipality, including investments in rapid transit, inclusive growth and complete streets;

• The portion of the capital budget funded directly from municipal revenues, capital from operating (meaning funding of capital projects from taxes), is not keeping pace with needs; and,

• Delays and gaps in the industries’ supply chain, as well as the labour market, have caused extensions to project delivery timelines and increased vendor costs; sometimes costs are doubling their original estimated costs. This is putting pressure on the municipality’s reserve balances and further deferring necessary maintenance activities.

What mitigation efforts have been taken by the municipality?

The mitigation efforts employed during 2022/23 are now depleted, and the municipality is faced with balancing increasing cost of services with households already coping with inflation.

As directed by the Chief Administrative Officer, business units spent several months scrutinizing their budgets. Through that exercise, the municipality identified $20 million in savings through a number of efforts which include, but are not limited to, asking business units to find a collective $7 million in cuts and removing the proposed sidewalk funding increase. On November 25, 2022, Budget Committee gave direction to reduce street recapitalization budget by $8 million in the 2023/24 Budget only.

Was the community engaged on the 2023/24 Budget process?

Yes. The 2022 Municipal Services Survey was conducted between September 12 and September 29, 2022. The survey was available both online and in a paper-based format to all municipal residents.

The survey focused on residents’ satisfaction with municipal services, where residents would like to see investments in municipal services and programs, and included a section on HalifACT, the municipality’s climate action plan.

The results of the Municipal Services Survey are intended to inform the 2023/24 business planning and budgeting process. There were 4,030 responses to the survey. Results of the 2022 Municipal Services Survey were provided to Regional Council on November 22, 2022.

The Municipal Services Survey is conducted every two years, alternating with the more detailed and in-depth Resident Survey. The 2022 Municipal Services Survey is an abbreviated version of the 2021 Resident Survey and is intended to be a ‘pulse survey’ to supplement the more rigorous Resident Survey, at a lower cost.

The 2023/24 Budget consultation process also sought public comment by inviting members of the public to provide feedback following each presentation.

What is the Budget Adjustment List?

Throughout the Budget Committee sessions, operating budgets for each of the business units have been presented and reviewed. Each business unit presented a proposed budget and provided additional items outside of the proposed budget that Budget Committee might consider as add-ons (“overs”) or subtractions (“unders”) from the Budget. In reviewing the Proposed Budget, Budget Committee made a series of individual motions accepting the business unit proposed Budget and debated which, if any, items to add to the Budget Adjustment List (BAL), for further debate.

The approved BAL resulted in a change of $1.6 million to the 2023/24 Budget. The Budget Committee made the four changes below to the BAL, which increased the BAL by $800,000 from the staff recommendation:

• Implementation of paid parking on Saturdays;

• Addition of seven new positions for HalifACT;

• Reduction of proposed area rate administration fee increase; and,

• Design and survey for MacDonald Sports park lighting.

What is the 2023/24 Multi-Year Capital Plan?

The 2023/24 Multi-Year Capital Plan sets out the proposed capital plan for the next four years. The 2023/24 Multi-Year Capital Plan prioritizes the infrastructure investments that not only focus on existing and anticipated growth, but also those that have long-term value to the municipality, including buildings, roads, bridges, and recreation centres.

This rolling four-year plan is updated annually as timing, scope, funding of projects and infrastructure funding opportunities can change.

What was the purpose of the Strategic Multi-Year Business Planning and Budget Process and 2023/24 Budget Outlook report?

The Strategic Multi-Year Business Planning and Budget Process and 2023/24 Budget Outlook report, presented to Regional Council on October 25, 2022, marked the start of the 2023/24 municipal budget process. This report provided a high-level overview of the background, changes and updates, proposed key dates and milestones, financial challenges and budget implications.

What is the Climate Action Tax?

As outlined in the approved 2022/23 Budget, the Climate Action Tax is to implement the Strategic Initiatives of HalifACT. The tax will also be used to leverage climate action funding from the private sector, federal and provincial governments, providing the necessary investment for the success of HalifACT in the years to come.

Funds from the Climate Action Tax will directly support capital initiatives related to the HalifACT plan, which includes projects such as electric vehicles and buses, net-zero buildings and projects to improve the resiliency of communities and infrastructure.

Moving forward, the Climate Action Tax has been incorporated into the annual Budget, and it is anticipated to remain in place for at least the next 10 years, with the associated rate determined annually. For the 2023/24 Budget and onward, the Climate Action Tax is a part of the base budget and does not factor into the tax increase required to balance the budget.

For more information about the Climate Action Tax, visit: halifax.ca/halifact.

What is the Property Valuation Services Corporation Assessment Roll?

The Assessment Roll provides the assessed values for property taxation purposes and is updated and released once a year by Property Valuation Services Corporation (PVSC). These assessments are provided to each municipality, as well as individually to each property owner. PVSC is an independent, municipally funded, not-for-profit organization that provides property assessment services and information to Nova Scotia’s municipalities and property owners.

On January 9, 2023, PVSC provided an overview of provincial assessment changes that have taken place over the past year.

The 2023 Assessment Roll does not determine the municipality’s 2023/24 tax revenues; it simply establishes the total assessment base that the municipality uses for taxation.

The Assessment Roll did not change the debated tax bill increase, as assessment increases were anticipated and estimated into these options.

It is important to note that the tax bill is made up of the assessment (set by PVSC) multiplied by the tax rate (set by the municipality).