Medicine Hat City Hall pictured in April 2025. Eli J. Ridder/CHAT News

By Olivia Thorington

CITY HALL

City of Medicine Hat avoids larger tax increase by pulling from reserves

Apr 22, 2025 | 10:00 PM

The City of Medicine Hat will not add to this year’s planned property tax rate increase of 5.6 per cent after council on Tuesday approved a plan to pull over half a million dollars from the municipality’s reserve funds.

The $520,000 in cash was needed to bring the budget into balance after a decrease in the tax assessment base, city finance chief Lola Barta told council.

If the city didn’t use its reserves, the planned increase — that some on council were already uncomfortable with — would jump up to 6.2 per cent in 2025 for the city to cover its $94-million budget.

“To keep rates the same, the shortfall would have to be recovered from the reserves,” Barta said.

For most on council, pulling from a pool of money aimed at saving for the future was a reluctant choice.

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Coun. Alison Van Dyke didn’t want to return to taxpayers and tell them they now have to pay more than the additional $124 per year for the average detached home.

“In this situation it’s the right decision,” Van Dyke told reporters after the council meeting.

The tax assessment growth experienced a net 0.6 per cent decrease, throwing off expectations for a neutral outlook, Barta explained.

That was because Alberta changed policy to exempt affordable housing and the switch of Aurora Greenhouse from a taxable business to a tax-exempt farm building this year.

It also points to a larger issue of a plateaued tax base that has plagued Medicine Hat for years, councillors argued.

Coun. Cassi Hider blamed the city’s stagnant population and business growth but couldn’t put her finger on the root cause.

“When we were elected in 2021, that was definitely one of my hopes and dreams is that we would have some industry move here,” Hider said after the meeting.

She hoped more jobs would mean more families would put their roots down in Medicine Hat, too.

“But that hasn’t happened and that’s absolutely no fault of anyone,” Hider said.

Council hopes that staff can find savings to offset the use of reserves or even bring down the planned 5.6 per cent tax increase in 2026.

“Anytime, any year I want to see savings being found, efficiencies happening within the municipality,” said Van Dyke.

“I think everyone does.”