Edmontonians look to their City government to provide a wide variety of programs, services and infrastructure.
In order to fund such things, the City utilizes several revenue sources. Most notably is property tax, which typically accounts for over 50 per cent of operating revenues. Other sources of revenue include franchise fees, government grants, investment income and earnings, fines and penalties, licensing and permits, and customer and developer contributions. Having a variety of revenue streams helps to diversify and strengthen the City’s financial position.
City programs and services are typically available to every citizen and are paid for through tax-supported revenue. However, the costs of certain City services are also partially recovered through user fees — which are payments made by the direct users of the service.
For many of the services offered by the City, there is no comparable service available in the marketplace, such as fire rescue services, policing, transit, outdoor pools, etc. The aim of these services is to enhance the overall public good. However, for some City services there is also a private benefit received by the direct users of the service. In such instances, user fees can be an appropriate tool to recover costs in relation to these private benefits. This would be the case for both recreation services and the Edmonton Transit System.
When considering user fee policy, it is important to consider how user fees can play a role in equitably distributing service costs between individual users and society at large, limiting tax increases, enabling freedom of choice, more efficiently allocating government dollars, regulating demand, helping achieve the City’s strategic goals and infrastructure financing.
To better understand the application of user fees, we invite you to read the User Fees White paper so that you may contribute your ideas and help shape the City’s policy.