Common budget questions

Last updated: April 12, 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 proposed 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.