GUELPH – The county is projecting a tax increase of 3.9 per cent this year despite an announcement from the province of financial relief for municipalities to offset the cost of OPP contracts.
The county’s 10-year plan, which was shared with council in November, had initially projected a 4.1% tax increase, with increases ranging from 2.7% to 3.9% projected for 2026 to 2034, county treasurer Ken DeHart told council during a special meeting on Jan. 6 to review the 2025 budget and 10-year plan.
DeHart then went on to describe some changes to the plan since November.
“There were a number of line-item changes up and down,” but among the most significant items was the one-time financial relief the province provided for the OPP contract, he said.
The relief, announced by the province on Nov. 29, is intended to offset increased costs municipalities were facing as a result of the overturning of Bill 124, which had capped provincial salary increases at 1%.
After the legislation was overturned by the courts, the government and the Ontario Provincial Police Association ratified new collective agreements in July including salary increases for uniformed and civilian members of 4.75% for 2023, 4.5% for 2024, and 2.75% for 2025 and 2026.
For the county, the increased contract costs were expected to add approximately 2% to the tax levy.
DeHart told council on Monday the total relief provided by the province was about $3 million, but $1 million of it “was related to the 2023 reconciliation.”
The remaining $2 million was listed as a budget decrease, along with another significant change in the form of provincial gas tax and Ministry of Transportation funding that will result in $102,000 net decreased costs for the Ride Well public ride-sharing program.
But the budget decrease was almost completely offset by a single item listed under budget increases: a one-time transfer to reserves of $2 million to fund property acquisitions for ambulance stations.
“At the end of the day, the total effect of all these changes was that the tax levy was reduced by $133,000, and the tax impact drops to 3.9% in 2025,” DeHart said.
The proposed 10-year plan now projects a 3.7% increase in 2026, and a range of 2.8% to 3.4% for the remainder of the plan, he said.
“We have an estimated operating budget in 2025 of $362.6 million, and $627.8 million capital investment plan over the next 10 years, including $63.7 million in 2025,” said DeHart.
The plan is expected to include $84 million of new debt over the 10 years, “but a lot of that is growth-related debt,” he said, noting $65.2 million would be recovered by future collections of development charges.
Later in his presentation, DeHart told council the entire amount of the county’s debt is related to either land ambulance service or roads, with the largest share being for roads.
Of the tax-supported debt, $4.4 million is planned for a new roads department garage in Erin in 2025/26.
That garage, plus others in Brucedale, Harriston and Aberfoyle, as well as two future roads construction projects, account for a further $52.6 million in growth related-debt.
DeHart said the county has more control over tax-supported debt, and with improvements in long-term planning and asset-management planning, it can work towards minimizing or eliminating the tax-supported portion of the debt.
The current cost to service the tax-supported portion of the debt is about $3 million per year, but it is projected to fall to about $1 million by 2026, and then slowly creep back up to around $2 million per year in the remainder of the 10 years, he explained.
The growth-supported debt and servicing costs are increasing over the same period, “but that ultimately reflects the needs of a growing community and the increased construction costs that we’ve seen over the past few years,” said DeHart.
He went on to provide highlights of the 10-year capital plan, noting the $627.8 million in spending is predominantly in three areas: roads, housing services and affordable housing, and ambulance services.
Roads projects include the ongoing replacement or rehabilitation of roads garages, 267 kilometres of road improvements, replacement of 19 bridges and 11 culverts, 19 intersection improvements and one structural wall replacement.
Improvements to county-owned social and affordable housing units amount to $50.8 million.
The county has planned for construction of four ambulance stations, and has added land acquisition for stations to its plan. There will also be a county contribution for upgrades to the Guelph Elmira Road station.
DeHart provided more detail on the roads spending, saying $70.4 million is for garage construction.
“They are predominantly funded through reserves and … growth-supported debt,” he said.
Another $45.5 million is included in the plan for roads equipment replacements and a further $315.7 million over 10 years for road construction, bridges and culverts, resurfacing projects, and asset management and facility repairs.
Under the “land ambulance” heading, the plan includes $40.4 million for land acquisition and new ambulance stations over the next 10 years.
The county’s operating budget forecast includes $362.6 million in expenditures and transfers planned for 2025, which is a 20% increase over 2024, DeHart said. That is driven by changes to the child care budget, but the program is federally funded, he added.
“In 2025 a 1% tax increase or decrease is equivalent to just over $1.3 million,” DeHart said.
Assessment growth for 2025 was 4.32%.
“That’s higher than anything we’ve seen in the last 25 years,” he said, noting it will go some ways toward offsetting the tax increase.
Social services make up the greatest portion of the operating budget at 49%, with roads and bridges coming second at 13%.
But in terms of the tax levy requirement, roads and bridges require a greater share at 28%, while police services come next at 13%.
DeHart summed up the 2025 operating budget, saying it continues to phase in significant capital cost increases experienced over the past few years.
Major impacts include:
- roads, $2.6 million or a 1.9% levy impact;
- equipment, $650,000 or a 0.5% levy impact;
- facility improvements, $650,000 (0.5% levy impact);
- other areas, including housing, solid waste and museum, $600,000 (0.4% levy impact).
The OPP contract came in at a $2.6-million increase, equivalent to a 1.9% levy impact, but the province’s $2 million relief reduces the levy by 1.5%. The proposed transfer for land acquisition for ambulance stations in turn increase the levy.
“Those two amounts net each other out,” DeHart said.
All of the costs are offset by assessment growth, to arrive at the tax rate increase of 3.9%, he said.
The full budget package is to be circulated to council by Jan. 24.
The administration, finance and human resources committee will review the budget on Jan. 27, and recommendations will be considered by council on Jan. 30.
