London city council finalizes 2025 budget, approving 7.3 per cent tax increase

Londoners can expect a 7.3 per cent tax increase next year, after councillors finalized the first update of the current multi-year budget, bringing the hike down from the 8.7 per cent previously anticipated.

That's around $260 more on next year's tax bill for those with residential properties with an assessed value of $252,000, the average that city staff follow.

It caps off a month-long process that began in late October when Mayor Josh Morgan tabled his 2025 update to the budget. It included several amendments to the multi-year budget passed in March, bringing the tax hike down to 7.4 per cent.

Councillors voted on amendments to Morgan's budget update last week, which were finalized on Wednesday during a special meeting of council, knocking the levy down another tenth of a per cent.

"They moved the budget in the right direction. They also found a pathway to providing some additional services in some areas at no cost to taxpayers," Morgan told reporters, highlighting new funding for the library's capital plan, the new renovictions by-law and Film London.

Morgan said he would not veto any of the changes passed by council, although he is able due to his strong mayor powers.

However, he acknowledged the financial impact the hike would have on homeowners.

"I'm as frustrated as they are that municipalities are not funded properly to be able to provide the critical services they need to provide," he said.

"We've seen tremendous upward pressure in the cost of those services, and yet we cannot, unlike federal and provincial governments, just borrow money to make ends meet to keep taxes down."

He noted municipalities were pushing for a new fiscal deal with senior levels of government.

The 2025 budget update also cut funding for the popular Neighbourhood Decision Making Program for the remainder of the budget cycle, saving $250,000 per year, reducing the 2025 hike by 0.03 per cent.

Councillors also voted to halve the annual community grants program, totalling $250,000 per year and contingent on the balance of the reserve fund from which it is sourced.

Funding for shelter beds

The 2025 budget sees a $1.15 million lifeline extended to Ark Aid Street Mission and the 90 beds it operates for the city's unhoused population. 

Councillors voted unanimously last week to provide $947,000 in one-time funding to extend 60 shelter spaces at the Ark's Cronyn Warner site on William Street using surplus federal funds. An additional $205,000 from a municipal reserve will extend 30 resting spaces at the agency's Dundas Street location.

The beds will have to move as of Dec. 31, after council voted to bar resting spaces funded with provincial or federal money from main streets in business improvement areas. A new location for the beds has not been announced.

The federal government recently unveiled $5 million for London over two years from a $250 million fund to end encampments. The city is also getting a $11.3 million top-up from the Reaching Home fund, aimed at reducing chronic homelessness.

An amendment to reinstate funding for the Extreme Clean and Hoarding Program also saw unanimous endorsement. It will have no tax impact, using funds from the Life Stabilization Operating Budget.

Londoners want long-term tax savings, says mayor

Some efforts to reduce the increase were shot down by councillors during budget talks last week.

Ward 11 Coun. Skylar Franke proposed reducing the police operating budget by $1.6 million per year or around $4.9 million over three years. The motion was defeated by a vote of 4-11.

The massive police budget rubber-stamped by council accounts for 2 percentage points of the 2025 levy.

An effort by Ward 4 Coun. Susan Stevenson to reduce the tax hike further by drawing $16.2 million from an unfunded liability reserve fund was defeated 13-1.

A last-ditch effort by Stevenson on Wednesday to revive the proposal sparked lengthy discussion but found no support from councillors.

While the one-time draw would cut the 2025 levy by two per cent, Morgan told council it would drive up the 2026 hike to 8.4 per cent, and "simply kicks the can down the road.

"(Londoners) want us to find long-term, sustainable tax savings to the budget so that they get the savings each and every year," he said.

Ward 8 Coun. Steve Lehman said he was "sorely tempted to support" the idea, but worried about the impact it could have on the city's AAA credit rating.

"I can't just go with the easy route saying, 'let's just take it from this unfunded liability,' because as the name implies, it's a liability that we owe at some point," he said.

The projected tax increases for 2026 and 2027 stand at 6.4 and 6.8 per cent, respectively.

The 2025 water rate will increase 1.5 per cent, about $8 more annually on average water bills, while the wastewater and treatment budget will increase 5.4 per cent, an extra $38.