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Chamber Encourages Focus on Fiscal Discipline as City Weighs Tax Increases

The Red Deer District Chamber is issuing a strong call for The City of Red Deer to prioritize aggressive cost-containment measures in the proposed 2026 budget. While the Chamber commends the City’s commitment to financial reform, the prospect of yet another significant property tax increase is unsustainable and jeopardizes Red Deer’s competitive standing and business viability.

The Chamber remains deeply concerned that the proposed property-tax increase presents a continued heavy burden on businesses, coming on the heels of last year’s substantial 10.35% hike. This cumulative financial pressure threatens the operational sustainability of Red Deer businesses, which are already grappling with rising operating costs, labour shortages, and inflation.

Frank Creasey, Chamber CEO noted “While we appreciate the City’s more disciplined approach to budgeting and the focus on core services, a 7.36% tax increase remains a serious concern for Red Deer businesses. Sustained tax escalation limits their ability to hire, invest, and grow. The Chamber urges continued focus on operational efficiencies, service prioritization, and long-term financial reform to ensure Red Deer remains competitive and affordable.”
 
The Need for Competitive Fiscal Discipline

The proposed increase places Red Deer out of step with comparable Alberta municipalities, where tax stability is prioritized:

  • In Lethbridge, the approved municipal property tax increase for 2024, 2025, and 2026 is set at a consistent 5.1% per year.
  • Medicine Hat Council approved a property tax increase of 5.6% in 2025 and a proposed 5.6% in 2026.
A continued reliance on taxation to bridge budget gaps will only diminish Red Deer’s affordability and deter future investment.

While we recognize pressures such as inflation, contractual obligations, slowed growth, and reduced transfers, compounding tax increases remain a concern. Last year’s Chamber survey showed:
• 64% said large tax increases significantly raise operating costs;
• 36% would delay or cancel investments;
• 27% warned ongoing increases could lead to downsizing or closure.
 
Commending Financial Reform and Transparency

The Chamber commends The City for adopting and beginning implementation of the Financial Roadmap: Transformation, Strategic Focus, and Future-Ready (July 2025). This critical initiative sets the stage for genuine enhanced financial governance, long-term fiscal planning, and a systemic re-evaluation of how City services are delivered.

We support the City’s commitment to rebuilding reserves, including the planned $10M operating reserve contribution. Strong reserves are essential, but this work must occur alongside continued examination of service delivery efficiencies, workforce and administrative costs, partnership opportunities, asset divestiture options, and alternative revenue sources that reduce reliance on property taxes.

Furthermore, we applaud City Administration for delivering on increased financial transparency, specifically demonstrated by the release of their first-ever City of Red Deer Financial Report Q3 2025 in November. This report confirms that while careful fiscal management in 2025 is producing measurable improvements in expense control and reserve contributions, reserves remain below required levels. This reality highlights the importance of maintaining a sustained focus on long-term stability over short-term gains, some of which are attributable to timing factors like project deferrals.

Matt Wear, President, Red Deer District Chamber highlighted that “Red Deer businesses understand the financial pressures facing the City, but a 7.36% tax increase still represents a significant burden in an already challenging economic environment. To maintain confidence, tax adjustments must be paired with clear evidence of internal efficiencies and modernized service delivery. Long-term sustainability cannot rely on property taxes alone, rather it must also look to outside investment into the city, which large tax increases tend to hinder growth.”

The Chamber supports the City’s focus on essential services and core infrastructure - transportation networks, predictable permitting, reliable utilities, and a safe, clean community. Budget 2026’s emphasis on lifecycle planning, maintaining existing assets, disciplined capital investment, and deferring non-essential projects aligns with business expectations.

However, the proposed 7.36% tax increase shows Red Deer’s financial pressures remain significant. Businesses expect continued efforts to identify efficiencies, modernize operations, and contain costs. As noted in our 2025 submission, a 3% reduction in operating expenses seems both achievable and necessary.

The Chamber remains committed to working with Council and Administration to ensure Red Deer’s long-term financial health supports a competitive business environment and a strong local economy.

Chamber Encourages Focus on Fiscal Di...