(rdnewsNOW/Ian Gustafson)

By Ian Gustafson

Budget day 2

Red Deer city council approves 3.97 per cent tax rate increase

Dec 9, 2025 | 10:07 PM

Red Deer property owners can expect to pay a little bit more in 2026.

On day two of budget deliberations on Tuesday, Red Deer city council unanimously approved the operating budget totalling $482.6 million, a tax rate increase of 3.97 per cent. They also unanimously approved the 2026 capital budget of $63.9 million.

At the beginning of the week, the operating budget was proposed at 484.5 million with a tax increase of 7.36 per cent as well as a capital budget of $63.9 million.

However, on Monday, the tax rate was brought down to 6.89 per cent after the city increased the amount of revenue expected from construction growth by $800,000.

The biggest changes came on Tuesday, which brought the tax rate increase down to 3.97 per cent.

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These changes include a reduction of $4 million in tax-supported salaries, which was accomplished by increasing the vacancy and efficiency factor applied to salaries, wages, and benefits budget. This approach, according to the city, accounts for natural vacancy-related savings within the organization and guides city administration to incorporate these efficiencies into the budget planning process.

In addition, council reduced the planned ORTS reserve contribution by $1.5 million, which resulted in an amended planned contribution of $9 million in 2026.

Mayor Cindy Jefferies said during the meeting in her closing statement that the community was looking for stability, predictability, and a reasonable tax rate.

“I would say council that you’ve delivered on that,” she said in council chambers on Tuesday. “I can’t help but point out that citizens in this community get good value for their tax dollars. I would of liked to have seen more of a contribution to reserves building that up when there’s an opportunity. My comfort zone was a little higher; I was thinking somewhere between five and six. If we got there, we’d be doing well. When I think of four per cent, I’m fine with that. I think it does recognize some of the needs in the community. What concerns me is that it really doesn’t keep up with the inflation the municipality is faced with, so in that sense it sets us backwards a bit.”

Councillor Kraymer Barnstable said he was happy with the budget, given the double-digit tax rate increase that happened in 2025.

He said he struggled last year was a struggle.

“That last budget was really unfortunate and difficult to work through, but it has allowed us tonight to get to a point where the number should be much more palatable from the community,” he said, adding he had members of the public ask him to keep the tax rate increase to four per cent. “I think this sends a strong message to our community of the work that’s been done of the last council and also just the fact of where we’re at.”

Councillor Tristin Brisbois had hoped to contribute more the the reserves but felt that council had landed in a reasonable spot.

“I think the four per cent that’s expected, and I would love to see something of that range going forward. I don’t want to take our eye off the ball, though, in terms of what our financial health is continuing. I just want to reiterate that we are not out of the woods yet, so just being continuously aware of the spending and the decisions that are going to be made because things will pop up as the year goes on.”

Meantime, Tara Lodewyk Red Deer City Manager, said in a media release that council’s approval of the budget continues the city’s steady progress toward long-term financial sustainability and organizational resilience.

“This budget reinforces the hard work undertaken over the past several years to rebuild our reserves, reduce financial risks, and strengthen our ability to deliver reliable services,” she said. “It reflects a more stable path forward – one that moves us away from dramatic swings in tax increases and toward predictable, responsible planning for our community’s future.”

Other key resolutions:

• Council passed a resolution to establish ongoing annual funding of $250,000 for Tourism Red Deer to support major event attractions.
• Council increased the Community Culture Development Fund allocation by $100,000 to enhance community grant support. This means for the 2026 to 2028 grant cycle, applicants will receive $1,435,000.
• Council approved a one-time $60,000 grant to the Central Alberta Crime Prevention Centre for 2026.
• Council approved ongoing annual funding of $30,000 for Sunnybrook Farms. This was amended from $50,000 in annual funding.
• Council approved an increase in service levels for downtown and capstone beautification at a total cost of $100,000.
• Council agreed to postpone consideration of the sponsorship pilot program to the end of Q2 2026 council meeting.