Brace for a hefty regional tax hike

Inflation, stubbornly high gas prices and the cost of borrowing could lead to a 9.8% increase

A new regional council was presented with a grim picture of the proposed 2023 regional budget.

The average household could see a tax increase of as much as $147 per household, Region of Waterloo finance commissioner Craig Dyer told a strategic planning and budget committee meeting Wednesday afternoon.

Regional staff is projecting a 9.8 per cent tax hike, which doesn’t include any increase due to the Waterloo Regional Police budget.

Police are projecting a tax increase of eight per cent. Like the region, police cite fuel and inflation costs, as well as contracted pay increases.

Dyer said the 2023 budget is “very different kind of budget” because the region is facing significant costs due to sky-high inflation, soaring fuel prices and increased capital costs especially due to high borrowing costs.

Inflation is the single largest impact in the 2023 budget, Dyer said, adding $37 million in costs to meet inflation and rising costs.

Gas and diesel prices are “stubbornly high” and they impact the region daily, especially its fleet of 270 Grand River Transit buses, as well as ambulances.

In addition, the expectation that regional tax dollars should fund homelessness, public health programs, and other programming for seniors and youth has put immense pressure on the budget.

“The property tax was really never designed to fund those type of services,” he said. “We find ourselves funding more and more and there’s no better example in the 2023 budget than the homelessness programs.”

But the region is poorly equipped to fund the cost of homelessness programs, Dyer said.

“The service gap or the expectations gap between what is expected of regional government and our fiscal capacity to fund those services, in my view, has reached a critical level,” he said.

Homelessness programs and the region’s interim housing plan approved in August are significant projects.

About $5.6 million was added to the tax levy in 2022 for homeless programs, Dyer said.

In 2022, the region received government funding for social services relief, but that expires at the end of December. The money was used to implement the region’s interim housing plan.

Maintaining the current level of services will lead to a tax increase of $50 million over last year, Dyer said.

“These are numbers that we just haven’t experienced in the past, certainly not to this magnitude. This is really why this budget is very different from the previous ones,” he said.

Coun. Doug Craig asked regional staff to come back to council with a lower budget.

“This looks like a fait accompli,” Craig said.

“What would happen if we reduced it to eight per cent?” he said. “The community needs to see it. We need to see it.”

Craig said it’s important to see what cuts would need to be made and what would be the impacts of those cuts.

But region chair Karen Redman said it may be premature to direct staff to make cuts. Another budget meeting is slated for Dec. 14 and there are more meetings planned into January.

“Everybody wants to see a costeffective budget,” she said.

Maintaining the current level of services will lead to a tax increase of $50 million over last year