Hamilton city council approves budget and 5.8% tax increase

Hamilton council passed the city's next budget and a 5.85 per cent property tax hike — the biggest in years.

Councillors started the meeting Wednesday under the impression the tax increase would be higher, at 6.7 per cent. 

But in a surprise move, Mayor Andrea Horwath put forward a motion to increase property taxes by 5.85 per cent instead. In recent weeks, she said she worked with staff to find sources of funding other than the tax base without having to cut back services. 

"It became very clear to me there's a great desire for enhancements and changes to support people," Horwath told councillors. "But also a real concern about the impacts the [tax] increase would have on members of the community." 

Council approved the overall budget — totalling $1.07 billion — with a vote of 10-6. 

'Wise investments to stop things from getting worse'

Those in favour of the budget were:

• Horwath (mayor)
• Cameron Kroetsch (Ward 2)
• Maureen Wilson (Ward 1)
• Ted McMeekin (Ward 15)
• Alex Wilson (Ward 13)
• Esther Pauls (Ward 7)
• Nrinder Nann (Ward 3)
• Craig Cassar (Ward 12)
• John-Paul Danko (Ward 8)
• Tammy Hwang (Ward 4)

"Cost of living is a significant issue, that's not a problem the city can solve," said Cassar. "We are making decisions and wise investments to stop things from getting worse."

One of the top areas of spending is housing. The city's housing budget will increase by 30 per cent from 2022 to $70.1 million. 

The new budget means the average household in Hamilton will pay $262 more in property tax, compared to $300 under the 6.7 per cent increase, confirmed Mike Zegarac, general manager of finance. 

It will be the largest property tax increase in at least a decade, with rates historically under three per cent, according to the city. But almost half of the increase will be to cover inflation, such as a 40 per cent increase in fuel costs.

Federal, provincial pandemic supports have waned: city manager

To reduce the impact on tax payers, staff drew $1.5 million from its COVID-19 reserve fund for long-term care supports related to the pandemic, Zegarac said. And following the release of the Ontario budget last week, the city will have access to $546,000 through the province's homelessness prevention program. 

The city also received more revenues than anticipated from the Ontario Lottery and Gaming Corporation and accessed department surpluses from last year, among other "financial adjustments," said Zegarac.

However, city manager Janette Smith warned council that Hamilton continues to grapple with an unprecedented need for social services like shelters and food banks, spurred by the pandemic. And while the federal and provincial governments were initially very supportive of helping municipalities cover increased costs, those relief funds have for the most part stopped.

"The pressures on the system have not gone back to pre-pandemic," Smith said. "It has become the new normal and continuing to increase. We were saying to the province, 'you can't just pull out, we need some transition,' but they decided to pull out."

Controversial police budget passes

Before the final vote, councillors debated small tweaks to the budget. Danko wanted to reduce funding to the YWCA for  transitional housing by $600,000 to $2 million, but add a promise to provide a total of $10 million over five years. 

"There's no question we need these services," said Danko. "However when the YWCA made its request, they indicated they could make do with $2 million." 

He was met by pushback from downtown councillors who said $2.6 million was critical to cover the YWCA's food insecurity program, specialized supports for mental health and trauma and overnight staff for harm reduction. 

"I don't want to promote systematically underfunding women's supportive housing this community desperately needs," said Nann.

Danko's motion was defeated 7-9.

Alex Wilson unsuccessfully tried to bump up city-employed summer students's pay to a living wage. The proposed council office budget increase of $600,000 was also rejected in a tie vote. 

The police budget, which proposed $12 million increase for a total of $195 million, passed 10-5 with Pauls not voting because she has a conflict of interest. 

The overall budget also included: 

• $4 million to help fund affordable housing projects built by non-profit organizations
• $1.36 million to support city's response to encampments by hiring a permanent team including street outreach workers, bylaw enforcement officers and police officers
• $353,600 to increase the living wage from $17.20 to $19.05 per hour for crossing guards and non-union, part-time casual employees 
• $311,500 for the Bay Area Climate Change Office, including hiring two new project managers
• $308,000 to speed up the building of cycling infrastructure, including 65 kilometres of new bike lanes in the next three years

Councillors who voted against the overall budget said it was because they couldn't burden their constituents with such a significant tax increase during a time of high inflation. These councillors included:

• Brad Clark (Ward 9)
• Mike Spadafora (Ward 14)
• Jeff Beattie (Ward 10)
• Mark Tadeson (Ward 11)
• Matt Francis (Ward 5)
• Tom Jackson (Ward 6)

"There are residents in every single ward struggling to pay their bills, pay their mortgage, and this is going to hit them hard," said Clark, who also served as budget chair. "I think we could've done better and I wish we had."