Halifax staff are proposing a 5.9 per cent property tax increase for the next fiscal year, which will be debated by regional council on Nov. 23.
The increase is made up of 2.9 per cent to cover increased service costs, and 3.0 per cent for a proposed Climate Action Tax.
The increase would raise an additional $400 million annually for municipal coffers. This translates into an annual tax increase of $121 on the average Halifax home, assessed at $262,700. Commercial taxes would rise by an average of $2,553, based on an average business assessment of $1.46 million.
According to a fiscal statement issued Friday, inflation is having a "considerable" effect on municipal finances, with a 40 per cent increase in fuel costs, a $2.9 million increase in the RCMP collective agreement, and $4 million in other contractual increases.
Money is also needed to redevelop sites such as the Halifax Forum, the Windsor Street Exchange and the Mill Cove Ferry, plus improving 13 "multi-modal transportation corridors" around the municipality.
The Climate Action Tax would fund the purchase of 60 electric transit buses, and refurbish an electric bus garage. It would also help municipal buildings be more energy efficient.
Some of this infrastructure work is being driven by population growth. The municipality predicts 9,700 new residents will arrive in the city next year, while 4,000 new homes will be built.
Halifax's population is on track to pass 500,000 people in the next five years, the statement said.
Roughly $700 million in capital expenditures remain unfunded in this proposal, including $26 million for Halifax Transit service expansion, $80 million for a new police headquarters, $179 million for the municipal climate plan HalifACT and $415 million for an additional 250 new electric buses and associated infrastructure.
The fiscal statement says, historically, Halifax's tax increases have not kept up with inflation, and the city has lower taxes than similar-sized cities elsewhere in Canada. Commercial taxes, however, are described as "more middle of the road," comparable to similar-sized cities in Canada.
A "sustainable tax policy approach" moving forward, would lead to "relatively smaller" tax increases in future years, the report said.
Municipal staff cannot comment on the tax plan before it is debated by council.
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