How cutting property taxes can end up costing you

On Wednesday, Feb 26, Halifax budget season’s regular debates had their curtain call. After about a month of intense scrutiny and discussion, Halifax’s business units have mostly set their budgets for a city budget of about $1.3 billion. There are a few items that council may consider funding, which will be debated on March 19, during the budget playoffs—AKA the Budget Adjustment List debate.

These are the things up for funding in the playoffs this year:
$100,000 – Neighbour mediation program
$463,000 – Community Crisis Diversion Team
$1,650,000 – Daycentre and after-hours response team for unhoused Haligonians
$328,900 – to finish funding the council-approved JustFOOD program
$215,000 – 10 firefighters (which will be an additional $1.2 million/yr by 2028)
$1,418,700 – 14 new RCMP officers
$254,500 – to beef up the Youth Advocate Program
$57,400 – for a sports field technician
$2,137,000 – to keep 10 buses on the road for two extra years
$310,000 – to hire someone to speed up Halifax’s Heritage District planning
$113,800 – An additional HR person for Halifax Transit

This $6,631,600 in new spending is almost all operational spending, which means if approved, this is about $6.6 million in new annual spending. Some things, like hiring people or driving buses, are also subject to things like collective agreements or the price of oil, which means that every year, Halifax’s annual financial commitments grow, and is a big reason why municipal accountants suggested raising taxes to cover this year’s $69 million operating deficit.

During this year’s Budget Adjustment List debate, some other things will be debated that don’t yet have a dollar value (but will by March 19), like more collision data collection, cutting the police tank(s), increasing the road safety budget, not getting a community outreach coordinator or screening firefighters for cancer.

Mayor Andy Fillmore put a motion on the floor at the death of the regular season budget debates. Fillmore, who ran on a campaign to “freeze the municipal tax rate”—which will raise your tax bill but which he sold as a tax decrease—did the same thing again when he put a motion on the floor proposing $20 million in cuts to keep taxes low. A lot of the things in his motion, like taking $10 million out of the Central Library replacement fund, increasing the deed transfer tax estimate and reducing Halifax’s climate action tax by a third, were in the budget introduction documents presented to council on the Feb 5 budget meeting. In those documents, staff advise that “while these adjustments would reduce revenue requirements, staff do not recommend them as they are not sustainable solutions and may negatively impact the municipality’s future financial health.”

There’s also some other stuff, like getting rid of landlines ($600,000), charging insurance companies for HRFE fire response on provincial highways ($250,000), cutting tree planting ($1,000,000), aggressive vacancy management and anything else the CAO can come up with to save money. All in all, these cuts would free up $20 million, which could be applied to this year’s shortfall and save Haligonians each, on average, less than $100 in property taxes this year.

A hundred dollars is nothing to shake a stick at, but in reality, sweeping cuts to municipal budgets almost always cost Haligonians more than they save. Take, for example, the proposal to bill insurance companies for firefighters’ response on provincial highways. In recent months, the Utility and Review Board’s decisions webpage has been full of insurance companies being granted permission to raise their fees due to the rising cost of providing insurance. With the other factors driving up costs, like theft, the sheer volume of collisions and the cost of repairs, adding a bill for your insurance company to pay for Halifax Fire responses makes it more likely, not less, that your car insurance goes up next year.

Municipal spending also often has many positive knock-on effects that are hard to quantify in an annual budget process. For example, a $4,565 Vermicompost pilot project was a small part of the city’s JustFOOD spending last year. Details on what this program is or was are incredibly hard to find, but council will be getting an update on the pilot project Soon™.

However, 363 Haligonians participated in the vermicompost workshop according to the budget presentations. Estimates vary, but vermicompost (read: pet worms) consume about 3.5 lbs of food waste a week. If each of those 363 people started vermicomposts after the workshop, this would have diverted approximately 66,000 lbs or about 30 tonnes of food waste from HRM’s facilities. There’s a bit too much uncertainty in the organics processing budget (annual food waste estimates vary between 50 and 60 thousand tonnes in the HRM). Still, in fiscal terms, vermicompost and traditional green bin collection each cost the city approximately $150 per tonne.

But the people who vermicompost also generate the valuable fertilizers of worm castings and worm juice. For gardeners (and let’s be serious, who else is taking a municipal vermicompost workshop pilot?), this is a direct savings in household fertilizer budgets of well over $100 a year. For fractions of fractions of a cent of your property taxes last year, Halifax is diverting food waste in a way that’s saving up to 363 Haligonians hundreds of dollars. And that’s not even factoring in the fact that having at-home fertilizer also increases yields from backyard gardens. Depending on the American tariff situation during fall’s harvest season, that too could be a direct savings of anywhere between $3 and $3,000,000 per vermicomposter.

And for those who think, “You can’t just make a budget line item $3,000,000 just to make a budget say what you want it to,” you totally can! That’s exactly what Fillmore has proposed we do with the deed transfer tax this year. The deed transfer tax is the cut of the money the city gets every time a piece of real estate changes hands, and Fillmore proposes to make the city’s estimates $3,000,000 rosier. In the past, the city has made conservative predictions and enjoyed surpluses, but in 2022 council directed staff to make deed transfer tax estimates rosier, and the housing market took a downturn. That mistake led to a 2023 budget season with headlines like this:

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That 2023 budget story also foreshadows an issue with the proposed $10 million Central Library reserve fund cut. When he explained the rationale for the proposed cuts on Feb 26, Fillmore said that the Central Library didn’t need a dedicated reserve fund because the city has a process to replace libraries. In 2023, then-councillor Lindell Smith made an impassioned plea to get the Halifax North Memorial Library renovations underway in the 2023 budget season. But there wasn’t enough money to do all the library renovations needed, so Halifax’s north end library’s urgently needed 2023 renovations are just now getting underway in 2025. When the Central Library eventually needs major renovations or replacement, if it doesn’t have its dedicated capital fund, councillors will just have to hope that their local library doesn’t have to compete with the city’s flagship library for capital funding in that budget year.

In addition to being shortsighted, another big issue with Fillmore’s proposed cuts is that for most people in HRM, property taxes are not even close to the biggest line item in their budgets. Most Haligonians’ annual property tax bill is less than $2,500 per year.

This is not to say that non-capped apartment buildings or recent home buyers with cap-reset homes wouldn’t benefit a bit more than most property owners from a bit of property tax relief, and $100 is $100, but would you rather spend that $100 (or maybe even a little more in property taxes) if it meant a massive reduction in other parts of your budget like transportation, shelter and/or food expenses? While it’s true that cutting municipal spending will decrease your property tax bill by a bit, when the city spends money right—from vermicompost to transportation—fractions of cents from your tax bill can put hundreds of dollars in your pocket. Fillmore’s proposed cuts are not about fiscal responsibility or saving you money. It’s a bit of theatre designed to convince you, the audience, that council’s being responsible with your money.

While it’s easy to read this as a criticism of Fillmore and council, it is more accurate to say that Fillmore is just giving us what we demand. For all the same reasons that we don’t feel safe flying unless uniformed personnel make us take our shoes off and scan our bags; and for all the same reasons that we’ve now made cars so big that they’re more dangerous to the people inside them; theatre only exists for the audience that demands it. In 2013, when the CAA first launched the cost-of-driving calculator, it did so because in 2013, “two-thirds of Canadians think their annual grocery bill is bigger than their car ownership costs, which is not true. Yearly ownership costs for an average compact car are about $9,500, while the average Canadian spends $5,400 on groceries a year.” And we’re just as bad with understanding our taxes, since most voters in Halifax chose a guy whose flagship promise of freezing the tax rate was actually a promise to raise your tax bill in a way that sounded like a tax cut.

What irked most, though, about these proposed cuts to municipal spending, was the room’s response to laud the “leadership” on display from Fillmore. The proposed $20 million in cuts are a lot of things, but leadership is not one of them: It’s just more of the same we’ve had for the past 12 years.

Even though we had a municipal election in October, at this point about five months in, it seems we only really swapped out which former Liberal member of parliament-turned-mayor is promising to cut our property taxes this year. Leadership is not staying the course slightly more aggressively in year 13. Especially when the reason the city’s budget is in rough shape this year—and is in rough shape every year—is the foundational unsustainability of this city caused by staying the course and lowering taxes.

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The good news is that like any good piece of theatre, Fillmore left open the door for a deus ex machina in the eighth clause of his motion, when he also asked the Chief Administrative Officer for any other things she could think of to keep taxes low while keeping the city funded. The CAO, Cathie O’Toole, has previously told councillors that our infrastructure is not sustainable and that the cost of automotive infrastructure is so high that it needs to be “rationalized.” Rationalization, in fiscal terms, could be anything from very high parking fees to cover the cost of automotive infrastructure, to restructuring the Department of Public Works and HRM’s transportation management strategies so that the city starts only building sustainable, locally sourced, artisanal hand-crafted streets.

She’s also been at the helm overseeing structural changes in the city’s bureaucracy that have set the city up for long-term success and sustainability. For years, the city’s accountants have been ringing the alarm about the risks to future Halifax thanks to today’s Halifax’s unsustainability. And now, almost by accident, council has asked the accountants and CAO to come up with ways to address some of that unsustainability directly.

It is quite likely that O’Toole will come back with things that are not popular to keep taxes low this year. Council has been slashing spending for decades, and there’s not much left to cut. The city must raise money through fees or taxes to keep taxes low without cutting the funding for needed municipal services and programs. If the CAO comes to council with a bunch of ways to raise money, that will be the true test of council’s leadership. Will they meet the moment and be bold leaders by raising fees and taxes to keep the city functioning, while saving us money in the future even as we respond with heckling and a chorus of boos? Or will they put 100 dollars in your pocket while increasing your cost of living and making the city more vulnerable, to our rapturous applause?

Find out more as Halifax Regional Council presents Fiscal Responsibility Theatre on March 19 down at City Hall. Doors open at 9:15am, and the debate starts at 9:30am. Don’t miss this must-watch installment of Municipal Democracy for Haligonians.

This article appears in Mar 1-31, 2025.