Common budget questions

Last updated: September 20, 2022

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

 

What can residents expect in terms of a tax adjustment?

The average residential and commercial property tax bill is increasing by 4.6 per cent.

This means the average single-family home tax bill will increase by $94 in 2022/23 to $2,144. The average commercial property tax bill will increase by $1,931 in 2022/23 to $45,337.

Of the 4.6 per cent increase, 3.0 per cent is dedicated to the Climate Action Tax which will directly support HalifACT, the municipality’s long-term climate action plan. The Climate Action Tax will fund projects such as electric vehicles and buses, net-zero buildings and other initiatives to improve the resiliency of communities and infrastructure. The remaining 1.6 per cent increase will fund ongoing operations, public safety, maintenance and service improvements – such as the provincial road transfer – as well as strategic capital investments.  

What is the Climate Action Tax? 

The Climate Action Tax will be used 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.

The Climate Action Tax will fund projects such as electric vehicles and buses, net-zero buildings, installing public electric vehicle chargers, and taking actions to improve the resiliency of communities and infrastructure against the impacts of climate change – which range from flood mitigation and stormwater management to food security and emergency preparedness.

It is anticipated that the Climate Action Tax will remain in place for at least the next 10 years, with the associated rate determined annually.

What is HalifACT, and what is the importance of investing in climate action now?

To learn more about HalifACT, watch a one-minute video here

To read more about the importance of investing in climate change, see the project web page, these common questions, and the plan.

What is the amount of debt outstanding in the 2022/23 budget?

Municipal tax-supported debt will remain stable at approximately $246 million in 2022/23, with debt servicing costs under five per cent of revenues, which is well below provincial guidelines for debt management. 

Since 2015/16, the municipality’s population growth rate has increased significantly, transforming its economic position. The municipality’s fiscal approach must continue to adjust to both population growth and other financial realities. That said, as the municipality’s overall fiscal position is still very strong, the municipality is well positioned to withstand economic pressures, such those resulting from the pandemic these past two years.

Looking beyond 2022/23, steps will need to be taken, as outlined in the Fiscal Sustainability Strategy of November 2020, to ensure expenditure growth does not outpace our incomes or trigger a situation where there is inflation in increased wages and prices that have recently been seen in some advanced economies. 

What does the municipal budget fund?

The municipal budget funds all costs associated with servicing a growing municipality. 

This includes day-to-day municipal operations (e.g. transit, police, fire, garbage collection, snow clearing, staffing costs), capital priority initiatives approved by Regional Council (e.g. HalifACT, Cogswell District project, Integrated Mobility Plan, Moving Forward Together 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 programs and capital projects included in the 2022/23 Budget?

Key programs and capital projects included in the approved 2022/23 Budget include the following: 

Halifax Transit

  • Electric Bus Procurement and Ragged Lake Transit Centre – $64 million
  • Final year of Moving Forward Together Plan implementation – $5 million

Active Transportation and Environment

  • Active Transportation – $4 million
  • Regional Centre All Ages & Abilities (AAA) Bikeways – $7 million
  • HalifACT Climate Action Plan – $10 million (2022/23 to 2025/26 $120 million)
  • Energy Efficiency Initiatives for Libraries and Recreation Centres – $4 million
  • Urban Forestry Plan implementation – $2 million

Transportation & Safety

  • Road Safety Improvement & Traffic Calming – $5 million
  • Enhanced Street Recapitalization program supporting new Levels of Service – $9 million (total Street Recapitalization is $41 million)
  • Transfer of provincial roads to the municipality from the Province of Nova Scotia – $8 million
  • Fire Fleet Expansion & Replacement – $5 million 
  • Bedford West Road Oversizing – $3 million 

Recreation & Community

  • Park Development/ Recapitalization – $8 million (growth initiatives increased by $2.5 million)
  • Halifax Common Pool Reconstruction – $8 million
  • Beechville Lakeside Timberlea Recreation Centre Recapitalization – $4 million
  • Halifax North Memorial Library – $5 million 
  • Non-profit tax rebate for affordable housing increase – $450,000
  • Burnside & City of Lakes Industrial Park expansion – $26 million

For more detailed information on the 2022-23 municipal budget visit halifax.ca/budget.

What are the challenges for this year’s budget?

The challenges for this year are similar to past budgets – limits on how many projects the municipality can deliver at any one time, as well as delays and gaps in the industries’ supply chain and labour market which have caused extensions to project delivery timelines and increased vendor costs. Additionally, the municipality will acquire 300 additional lane-kilometres of provincial roads in June 2022. 

In March of 2020, Regional Council had completed, but not ratified, the Pre-COVID-19 2020/21 Budget when the COVID-19 pandemic struck. As a result, Regional Council completely revised that year’s budget, the 2020/21 Budget recast for COVID-19

Last year, the approved 2021/22 Budget and Business Plan plotted a path through the pandemic, assuming that the pandemic would last a total of eighteen months from start to finish. 

While services started to be re-introduced, fees and revenues remained subdued, especially Halifax Transit fares. The federal government’s Safe Restart program provided $31 million of cost-sharing to offset the decline of revenues. During this time, Deed Transfer Taxes (although expected to decline) remained quite robust. In 2021/22, Regional Council set the average tax increase at 0.9 per cent.

In December of 2020, Regional Council approved the Fiscal Sustainability Strategy, which examined the current financial state of the municipality in (1) Operating and Taxes, (2) Capital, (3) Reserves and (4) Debt. This included recommendations to develop Strategic Initiative reserves for projects that are tied to an approved Council strategy – and are significant enough to lead to a discernable increase in the tax rate or special funding that is outside the normal budget process. This includes any required changes to debt and reserve policies, and is eligible to be funded through dedicated tax levies.

To learn more, read the 2022/23 Fiscal Framework Update report

Was there an opportunity for residents to provide input before the budget is finalized? 

Yes, residents had the opportunity to participate in all 2022/23 Budget meetings. During each meeting, time was set aside for residents to speak directly to Regional Council about budget priorities.

What is the annual Fiscal Framework report?

The Fiscal Framework is presented annually to Regional Council with recommendations for tax modifications to accommodate changing operational costs, capital investments, as well as debt and reserve changes including funding for current and new strategic initiatives. It is also reflective of on-going and emerging opportunities and challenges.

The Fiscal Framework sets the broad, opening strategy, a way forward to guide Regional Council deliberations that should result in an approved budget in early April 2022. The 2022/23 Fiscal Framework can be found here. The 2022/23 Fiscal Framework Update can be found here

Detailed discussions, along with public input, began in February 2022. This provided appropriate time for Regional Council to debate and adjust the budget. 

What did the 2022/23 Fiscal Framework report recommend? Why was there an update?

On November 23, 2021, when the 2022/23 Fiscal Framework was presented, the Budget Committee directed that staff prepare a supplemental report, exploring options to reduce the final average property tax bill increase from 5.9 per cent to 3.7 per cent. 

On January 28, 2022, staff presented the revised recommendation, 2022/23 Fiscal Framework Update, reducing the increase from 5.9 per cent to 4.6 per cent. 

Recognizing feedback from Regional Council on the importance of ensuring appropriate investment to advance the objectives of HalifACT, the municipality’s strategic climate action plan, staff recommended that the proposed Climate Action Tax remain at 3 per cent, while reducing the property tax increase for residential and commercial properties from 2.9 per cent to 1.6 per cent. 

The Fiscal Framework will shape long-term financial sustainability, while ensuring the municipality continues to provide municipal services to residents, visitors, and businesses.  

Should residents expect a similar proposed increase in the average property tax in future years?

Historically, the municipality’s property taxes have been less than inflation and lower than other cities of similar size. The municipality will need to develop and implement a sustainable tax policy that accounts for inflation, annually, and supplement revenue through additional sources, such as user fees and cost sharing. This will help to fund the continued growth of the municipality, manage municipal assets and annual budget pressures, as well as meet climate change initiatives.

Per the Fiscal Sustainability Strategy, the municipality is currently developing guiding principles that will help to identify future revenue streams through options, such as user fees and cost sharing. 

Why not take the cap off tax bills? That would generate more money without having to increase taxes. 

The assessment cap is a provincial policy and only the province can remove the cap. Learn more on the Property Valuation Services Corporation website

What are non-discretionary costs versus discretionary costs?

Many of the municipality’s costs are non-discretionary, meaning they cannot easily be reduced in the short-term. Non-discretionary costs include long-term contracts, which typically have an expiry date or other legal commitment. Non-discretionary costs make up approximately 80 per cent of the budget.

Discretionary costs are costs which the municipality has no legal commitment to undertake and can quickly suspend or eliminate. Many grant programs fall into this category. Travel and training are examples of other types of discretionary costs.

What if the municipality cuts back on capital projects?

Currently, Regional Council is investing 70 per cent of the capital budget in asset renewal, and the other 30 per cent in service growth. 

Investing in the capital budget helps to maintain municipal assets in good working order, and prevent further deterioration impacting service reliability or higher operating costs. Additionally, investing in the capital budget also provides residents of the municipality with the programs and services that make the Halifax region a place where people want to live, work, play and invest. Cutting back on capital projects would counteract Regional Council’s approved economic strategy for planned growth and building a thriving community.

Can’t we find more efficiencies within government to avoid increasing taxes?

The municipality is committed to continuous improvement by identifying efficiencies and delivering better value for every taxpayer dollar. 

Will the municipality be adjusting the projected fuel costs for 2022/23?

The municipality is not adjusting fuel prices or the proposed 2022/23 Budget at this time, but will manage price fluctuations through the fiscal year. 

Budgets are a snapshot in time and are based on a set of continually changing variables (one being the cost of fuel). Fuel prices are driven by market changes and are outside of the municipality’s control. The municipality will manage fuel increases within the existing budget, as the municipality has done with previous fluctuations in the cost of the commodity. 

The municipality has the flexibility to adjust to short-term external shocks, such as the current oil and commodity markets. The municipality does not attempt to forecast with confidence any “spot” assets, such as oil, given market uncertainties.

What are the projected fuel costs for 2022/23?

The approved, projected fuel costs for 2022/23 include a fuel price and usage increase of $4,423,200 for Halifax Transit, as well an increase in vehicle expenses (including maintenance and fuel prices) of $511,800 for the corporate fleet.

What is the Climate Action Tax? 

The Climate Action Tax will be used 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.

The Climate Action Tax will fund projects such as electric vehicles and buses, net-zero buildings, installing public electric vehicle chargers, and taking actions to improve the resiliency of communities and infrastructure against the impacts of climate change – which range from flood mitigation and stormwater management to food security and emergency preparedness.

It is anticipated that the Climate Action Tax will remain in place for at least the next 10 years, with the associated rate determined annually.

What is HalifACT and why do we need a Climate Action Tax?

HalifACT is a commitment to reduce our region's greenhouse gas emissions that contribute to climate change. The municipality is striving to achieve community-wide emissions reductions of 75 per cent by 2030 and net-zero by 2050. HalifACT also sets out a plan to ensure that residents, infrastructure and natural systems are prepared to withstand and recover quickly from climate impacts. Halifax Regional Council unanimously adopted HalifACT on June 23, 2020.

Funding HalifACT through the Climate Action Tax enables projects such as:

  • electrifying transportation (e.g. buses, fleet, installing public charging for electric vehicles)
  • constructing new buildings and retrofitting existing buildings to be net-zero (meaning that 100 per cent of a building’s energy need is generated on-site or off-site through a renewable source)
  • taking actions to safeguard communities and infrastructure against the impacts of climate change (e.g. flood mitigation projects, improved food security and emergency preparedness)

While implementing HalifACT will require significant investment from all levels of government, investing today will save money, prevent loss, prepare communities and improve wellbeing. Our model shows that if we successfully implement HalifACT, we will see a substantial return on investment by our target date of 2050. Halifax has an opportunity to grow the green economy and create more jobs in sectors such as energy efficiency, solar and wind energy and building energy retrofits.

What are the benefits of investing and acting on climate change?

As part of a partnership with Efficiency Nova Scotia, the municipality has implemented approximately 200 energy efficiency projects, saving over $2 million each year and reducing greenhouse gas emissions in municipal buildings by 15 per cent.

To learn more about HalifACT, the breakdown of the HalifACT 2022/23 budget, and what you can do to help our community fight climate change and be better prepared for impacts, visit halifax.ca/climate.

What is the total cost of funding the HalifACT Climate Action Plan?

Based on a 10-year workplan to implement the HalifACT initiatives, the total cost is estimated at approximately $613 million.

The funding is being broken into two major phases: 

  • Phase one: The first four years of the workplan (2022/23 to 2025/26), which has an estimated total project cost of $224 million. 
  • Phase two: The remaining six years (2026/27 to 2031/32), which has an estimated total project cost of $389 million. 

The Climate Action Tax (CAT) is designed to generate funding to help implement the HalifACT initiatives, with an initial focus on the four years of the workplan (2022/23 to 2025/26). 

It will take 10 years for the CAT, at a rate of 3 per cent, to generate $180 million. This tax revenue, in addition to a projected $70 million in funding from other levels of government, will be required to support the first four years of the HalifACT workplan. The remaining six years of the 10-year HalifACT plan, from 2026/27 to 2031/32, is not currently funded.

What is the difference between the $10 million budget for HalifACT in 2022/23 and the $18 million in funding being generated each year by the Climate Action Tax?

To implement the multi-year HalifACT Climate Action Plan, several key capital projects are planned over the next 10 years. 

An estimated $180 million will be collected through the Climate Action Tax over the next 10 years, plus a projected $70 million from other levels of government, which will provide the financial resources required to complete the first four years of the HalifACT project work (2022/23 through 2025/26).  

For the next 10 years, approximately $18 million must be secured each year through the Climate Action Tax (CAT). The CAT rate for 2022/23 is 3 per cent and may be adjusted moderately (up or down) in future years in order to ensure the required funding is available.  

The 2022/23 municipal capital plan has $73 million in approved spending toward the HalifACT Climate Action Plan initiatives for this fiscal year and $151 million approved in principle for fiscal years 2023/24 to 2025/26.  This year’s $73 million investment includes $10 million allocated to 2022/23 HalifACT capital projects as well as $63 million for Phase 1 of the electric bus procurement.  

View a breakdown of how the $10 million allocated to 2022/23 HalifACT capital projects will be invested. 

The $63 million allocated for Phase 1 of electric buses includes purchasing 30 electric buses and retrofitting the Ragged Lake Transit Centre to accommodate the electric buses. The funding for 60 electric buses and the transit centre retrofit have already been secured through the provincial and federal Public Transportation Infrastructure Fund and is separate from the funds to be raised by the Climate Action Tax for the HalifACT and electric bus initiatives.

How did the municipality determine the 3 per cent rate for the Climate Action Tax?

In April 2022, during the ratification of the 2022/23 municipal budget, Regional Council approved staff to proceed with the first four years of a 10-year workplan for HalifACT, at an estimated total project cost of $224 million. 

An estimated $180 million will be collected through the Climate Action Tax over the next 10 years, plus a projected $70 million from other levels of government, which will provide the financial resources required to complete the first four years of the HalifACT project work.  A funding plan has been designed to build up the Strategic Capital Reserve to fund repayment of debt that the municipality must take on as the capital projects are delivered.

To avoid significant fluctuations in the annual rate of the Climate Action Tax, the funding plan establishes a stable rate each year.  The CAT rate for 2022/23 is 3 per cent and may be adjusted moderately (up or down) in future years in order to ensure the required funding is available.  

Can you provide a breakdown of the $10 million to be spent in 2022/23 on HalifACT capital projects?

Here is a breakdown of how the $10 million allocated to 2022/23 HalifACT capital projects will be invested. 

If it will take 10 years for the Climate Action Tax to pay for the first four years of a 10-year HalifACT workplan, how will the remaining six years of the workplan be funded?

Climate Action projects scheduled for 2026/27 through 2031/32 have the potential to secure external funding from other levels of government and other agencies for a portion of the total costs.  The municipality will evaluate the most effective financing strategy for remaining municipal portion by 2026/27.

When will the Climate Action Tax start paying for investment in climate action initiatives? 

Projects to be funded by the Climate Action Tax will begin in 2022/23.

Is it possible the Climate Action Tax could increase or decrease year-to-year?

As part of a multi-year outlook, the municipality estimated the amount of funds needed over the long-term to secure funding for HalifACT and it was determined that, at this point in time, a 3 per cent Climate Action Tax (CAT) would be sufficient to generate the required cashflow.

It is anticipated that the CAT will remain in place for at least the next 10 years, and its associated rate will be determined annually. An increase or decrease from year-to-year cannot be determined yet due to external factors, such as inflation or additional government funding that has yet to be offered or secured. 

What will happen if there are extra funds left over from the $18 million collected through the Climate Action Tax each year for the next 10 years?  

At this time, it is not anticipated that the funds collected through the Climate Action Tax will be in excess of the total project costs as the funding model also includes the requirement to cover financing fees (interest) of the various initiatives within the larger HalifACT Climate Action Plan.

If additional government funding is secured to further contribute to the planned HalifACT capital projects, it is not anticipated that the 3 per cent would be reduced. The excess tax collected would then be available to fund HalifACT capital projects planned from 2026/27 to 2031/32, an estimated cost of $389 million, which currently do not have a funding source. 

Is funding from other levels of government, to support HalifACT, guaranteed at this point?

The HalifACT budget is currently fully funded by the municipality; however, efforts are underway to secure cost-sharing for HalifACT initiatives through provincial and/or federal funding.  

If cost sharing is secured, tax revenue collected through the Climate Action Tax can be allocated to the remaining $389 million HalifACT budget that is planned for the remaining six years of the 10-year HalifACT plan, from 2026/27 to 2031/32, which is not currently funded.