Hamilton's budget would see a 6.7% tax hike, the biggest in years. Many, but not all, councillors support it

After four months of budget deliberations, Hamilton's city council remains divided on whether or not to pass a substantial 6.7 per cent tax hike. 

If approved on March 29, it will be the largest property tax increase in at least a decade, with rates historically under three per cent, according to the city's website. 

The budget would boost spending on road infrastructure, water services, bylaw enforcement, police, paramedic and fire departments, housing and homelessness support, sidewalk snow clearing, climate change adaptation, public transit and cycling infrastructure. The city would be adding 45 new employees.

As the budget will need a majority to pass, CBC Hamilton surveyed all council members, asking if they'd support the budget on March 29 and why. Council will vote on the budget that day, following a deliberation process stretching 11 meetings over four months.  

Seven councillors and Mayor Andrea Horwath said they'd support the budget, while three councillors said they'd vote against it and, as of March 17, three others were undecided. Two councillors, Brad Clark (Ward 9) and Mark Tadeson (Ward 11) did not comment. 

"I believe this budget will aid in building a city that delivers greater prosperity, and a better standard of living for all," Horwath said in a statement. "I want Hamiltonians to know the increase in property taxes is not taken lightly." 

The proposed 6.7 per cent increase is "not out of whack" with what's being passed by other Ontario municipalities this year, said David Arbuckle, president of the Association of Municipal Managers, Clerks and Treasurers of Ontario. Burlington's property tax increase for 2023, for example, is at 7.5 per cent and Toronto is 5.5 per cent.

Across the province, municipalities are grappling with high inflation and uncertainty about how provincial legislation will impact their bottom line, Arbuckle said. 

We're in a moment where all of these crises are finally making us realize it's time to pay the bills.- Alex Wilson, councillor for Ward 13

For instance under Bill 23, municipalities are required to freeze, reduce and exempt some development charges — the fees developers pay municipalities when they build. Horwath said earlier this year that change could cost the city between $14 million and $25 million per year. Municipalities would've used that money to build infrastructure like roads and sewage, however it remains unclear who will be responsible for the funding shortfall. 

Unlike the federal or provincial government, municipalities can't run a deficit. They also have limited revenue tools and rely on user fees for services, like water, and property taxes. 

"When you have increased costs like inflation, which has a huge impact, or you have decreased revenue like the drop in development charges, municipalities really only have two options," Arbuckle said. "One is to cut programs and services or two — increase revenue."

'It's time to pay the bills'

Council members who said they'll be voting for the budget are: 

• Andrea Horwath (mayor)
• Maureen Wilson (Ward 1)
• Cameron Kroetsch (Ward 2)
• Nrinder Nann (Ward 3)
• Tammy Hwang (Ward 4)
• Craig Cassar (Ward 12)
• Alex Wilson (Ward 13)
• Ted McMeekin (Ward 15)

They all said the property tax increase is unavoidable not only because of inflation, but also because of previous councils's underspending on infrastructure and social services and the province downloading costs to municipalities. 

As a result, roads are in a "deteriorated state," Maureen Wilson told CBC Hamilton. The city is in the grips of a housing crisis and "at a tipping point" with extra expenditures as the "the Government of Ontario is missing in action." 

Alex Wilson echoed her thoughts. 

"Now we're in a moment where all of these crises are finally making us realize it's time to pay the bills," they said. "And that's hard. But the future is now here. We have to pay up."

Despite support for the overall budget, Alex Wilson, Kroetsch and Nann noted they'll not be voting for the police's $12 million operating budget increase. 

On March 29, councillors will be able to request specific items be voted on separately. 

Cassar said he's been talking to residents about the controversial police ask to help him make up his mind. 

"So far, I have heard virtual unanimity that spending currently allocated to the police could be distributed to other professionals with positive benefits for all involved, including police officers," Cassar said.

Residents can't afford a tax hike: councillor

Councillors who say they will be voting against the budget are:

• Matt Francis (Ward 5)
• Tom Jackson (Ward 6)
• Jeff Beattie (Ward 10) 

Jackson, an incumbent, defended last year's budget, saying the previous council was able to maintain services while only increasing property taxes by 2.8 per cent. 

This year's budget would include hiring five new staff to accelerate the Cycling Master Plan and increasing council's office budget by $600,0000, two examples of items Jackson said he can't support. 

"I cannot in good conscience pass along this tax hike when many, many hard-working families in my Ward 6 are struggling financially especially coming out of a two-and-a-half year pandemic and given rocketing high prices on groceries, rent, mortgages, etc.," Jackson said. 

Province needs to step up: Danko

Beattie said given the financial impact the increase will have on residents, he is leaning towards rejecting the budget and is open to solutions to reduce it.

 In the undecided camp are:

• Esther Pauls (Ward 7)
• John-Paul Danko (Ward 8)
• Mike Spadafora (Ward 14)

"There are some great initiatives in this budget," Danko said, pointing to spending on infrastructure, climate change mitigation and support for people living in encampments. 

"However there are also significant areas of provincial downloading that are being backstopped by the city." 

Hamilton taxpayers are footing the bill for shelters, affordable and transitional housing, paramedics and COVID-19-related costs in city-owned long-term care homes, among other things, all of which the province should be paying for, Danko said.