Hamilton councillors staring at 14-per cent tax increase in opening budget discussions

Hamilton, Ont. councillors are set to face an initial recommendation for a 14.2-per cent residential tax increase when the city’s Finance and Corporate Services department appears before a committee next Wednesday.

The budget outlook  revealed increased funding needs for the city’s healthy and safe communities division, capital financing, corporate financials and public works which will account for $149 million of a $166 million increase needed from the levy.

One of the increased expenditures includes $33 million toward the city’s affordable housing and homelessness crisis which is expected to address the estimated 1,700 currently unhoused in the municipality.

It includes a multi-year commitment of $31 million over three years to create 200 units of supportive housing to take advantage of additional provincial and federal funding opportunities.

Meanwhile, some $63.6 million will be needed for the capital financing portfolio which likely will have to absorb $40.5 million in development charge exemptions created via the implementation of the province’s Bill 23 the More Homes Built Faster Act.

On Wednesday, the city’s general manager of finance and corporate services, Mike Zegarac, also alerted councillors the separate water and wastewater rates, initially predicted to be about a 10-per cent increase, could also be impacted by Bill 23 and effectively double.

“The report really provides an indication of the financial position of Hamilton Water and does reference a preliminary forecast for 2024 short of 10 per cent, which is not inclusive of legislative changes that will effectively double that forecast,” Zegarac explained.

Ward 5 Coun. Matt Francis admits he was “pretty spooked” by the opening 14.2 per cent levy in the forecast but is not surprised the starting number is in the double digits.

“Housing and homelessness is one of the main themes in this budget that’s coming up … we have a lot of those pressures that are in front of us right now, including provincial downloading and inflation,” Francis said.

“So you combine these three and we’ve got a perfect storm in front of us. It’s a recipe for disaster.”

Council typically whittles down initial numbers to something more palatable during annual budget deliberations.

Last year, council brought down a proposed 6.9-per cent increase to 5.8 per cent for a final budget of $1.07 billion, maintaining current service levels with enhancements in affordable housing and emergency services.

It was the highest in Hamilton’s recent history and equated to an annual increase of $262 for the average residential property.

Francis says council has “its work cut out for it” and laments a conundrum that’s prioritizing the creation of affordable housing, yet making it unaffordable to maintain a home with tax increases.

“We’re creating the same problem that we’re trying to solve,” he said.

“Affordable housing is one of the main priorities for council in this report, yet we’re kicking people out of their own homes by raising taxes.”

Flamborough Coun. Ted McMeekin said he was reluctant to enter the budget debate during Wednesday’s council meeting frustrated by legislation that doesn’t allow Ontario cities to operate at deficits.

“Municipalities are the only level of government that don’t have the opportunity to run deficits and in the most difficult fiscal position,” he said.

“The ones that get left holding the bag so often.”

Councillors begin discussions on the 2024 budget during the general issues committee meeting on Sept. 20.

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