City councillors will have some tough decisions to make during the upcoming 2023 budget deliberations.
City staff anticipate a 5 to 6 per cent tax increase, according to a draft budget presented to council earlier today. There will likely be a similar hike for water and wastewater rates.
However, the tax levy for 2023 is still very much subject to change, city staff say.
“On the average tax bill that (increase translates into) about 190 bucks, just to put that in perspective,” explained city CFO/treasurer John Henry. “This figure is very raw … I caution you using this because we do need to move through the senior management team, leadership team review, and that may change that perspective a little bit.”
Council held a special meeting Thursday afternoon for budget orientation and to provide its initial direction to city staff.
Rampant inflation, increased Bank of Canada rates, Bill 23 impacts, and more have put pressure on Orillia’s budget heading into the new year, staff said.
With inflation at its highest in decades, and the Bank of Canada regularly increasing its rates, Henry highlighted the increased costs of borrowing for the city.
“We're hoping (increase of rates) doesn't continue, but it potentially could,” he said. “This has a dual impact on the city. Obviously, one has higher borrowing costs, … and then there's also the ability to maybe have improved investment returns."
The financial impact of Bill 23 for Orillia is expected to be $13.4 million over the next five years, with sweeping changes to development charges for Ontario municipalities.
Henry said staff are still estimating the full impacts of the bill as it awaits clarification from the province.
“For example, we're not really sure what attainable housing means, and what discounts would be applied to that,” he said. “We won’t really know these pieces until the regulations that support the legislation are released. We're hoping it's early next year.”
City staff asked for council’s guidance on what it hopes to achieve through the 2023 budget at Thursday’s meeting.
A number of items council hopes for, such as a housing coordinator, are already accounted for in the projected tax levy.
Several members of council expressed concern at the potential tax hike.
“I would say 90 per cent of the community can't afford a 6 per cent tax increase. Do we have an alternative to this tax increase that we could look at?” said Coun. Ralph Cipolla. “It's unaffordable to live here if we continue to do this.”
“At this stage, we're just presenting the draft numbers,” said Henry. “We can receive input from council to have a better understanding of what the priorities are.”
Mayor Don McIsaac submitted a report outlining council’s priorities for the upcoming term, which was created in consultation with his fellow council members following the municipal election.
Council will strive to rapidly deliver on two to three key priorities in 2023, the report said.
Among the priorities outlined in the report were improving healthcare access, affordable housing, implementing the climate action plan, retaining and expanding business, improving infrastructure, and other measures.
