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2023 Budget Backgrounder


A Budget Backgrounder

As many of you know, Hamilton City Council passed its 2023 operating budget on March 29th with a 5.9% tax increase. I hope this backgrounder puts that needed increase in context.

Our city is facing significant challenges. Affordability, visible despair that takes the shape of homelessness, mental health and food insecurity continue to haunt us. This budget is an effort to respond to these conditions without worsening issues.

This budget is also part of a long-term strategy. It also strives to fill a gaping hole the provincial and federal governments created. They once helped us heal, and they need to again. We must rebuild Hamilton and invest in making this city more resilient, greener and equitable. The budget also starts to correct the two decades of serious underfunding of our city's core assets, like roads, bridges and sidewalks. That's the fabric of what makes our communities livable.

The City of Hamilton's tax increase is similar to many other cities in Ontario. The Burlington/Hamilton budget increased by 7.5 per cent in 2023. Toronto's tax increase is budgeted at 7 per cent, while Mississauga/Peel and Guelph are coming in at 5.3 per cent and 4.5 per cent, respectively.

Here's my summary of the 2023 tax operating budget:

1. Inflation & COVID-19

Inflation hits you where you live, and your city government faces the same stress.
The Province of Ontario's revenues are rising at unprecedented rates – an estimated $200.4 billion for the 2023–24 fiscal year. That's a $20 billion increase from its 2022 budget due to tax revenues and money flowing from federal transfers. Cities, on the other hand, rely primarily on property taxes. These revenue sources are "inelastic". That means they don't increase or decrease quickly to match economic conditions.
The City's Treasurer advised us that the municipality's fuel costs rose by 40 per cent. And, growing costs of contractual services, such as a $2.7 million increase in curbside waste collection this year alone, hit hard.

We're also still feeling the impacts of the pandemic. The City continues to get walloped by expenditures and reduced revenues from areas such as Transit ($4.1 million), Parking Services ($2.1 million) and Recreation Services ($3.3 million).

2. Provincial Funding Agreements – Filling a Growing Gap

Under the law, the City of Hamilton must provide many provincially mandated services. Those are primarily in public health, childcare, and long-term care. Regrettably, Hamilton property taxpayers like you must absorb an additional $2.8 million in program costs. In the simplest of terms, the Province is failing to meet its cost-sharing obligations.

3. Housing and Homelessness

Ontario is the only province in Canada where property taxes finance social housing. In every other province, the Provincial Government funds this housing service.

The City of Hamilton increased its housing budget to $70.1M, a 30 per cent increase over 2022 levels. That shows our commitment to addressing the housing crisis - it's one of our top investments.

4. Core assets - Roads

During the last municipal election, Ward 1 residents called my attention to the crumbling of our roads, sidewalks and parks—regrettably, these items have been underfunded for over the last 20 years. Now the whopping repair bill has come due. This City budget is playing catch up. We will invest in critical infrastructure and core services, including a dedicated increase for our existing infrastructure with a 10-year phase-in strategy. That will address the $100M annual funding shortfall identified in the Transportation Asset Management Plan.

5. Health and Long-Term Care

This budget will see a $1.5M investment for additional staff at our two long-term facilities (Macassa Lodge and Wentworth Lodge). That will allow us to maintain the level of care in the midst of COVID recovery and other outbreaks as required by the Province.

Our investment of $4.2M in paramedic services will improve ambulance response time. It should also aid us in being better able to deal with an increase in demand by adding five additional ambulances and appropriate staffing.

6. Transit, Accessibility and Climate Change

In 2014, Hamilton City Council set a target for 2031 to reduce our reliance on single occupancy vehicles by 48 per cent. And the City has adopted the goal of Vision Zero to guide its safe street (re)designs. This budget includes $3.3M for transit and $1.4M for sidewalk snow clearing, enabling 866 km of sidewalk to be cleared of snow to support walkability. That's on top of $300K to speed the completion of the City's cycling master plan and provide funding for the bike share program. We've also established a climate change office, increased resources for public engagement, and boosted funding for implementing the City's Indigenous Strategy. That's part of Hamilton's ongoing commitment to Truth and Reconciliation.

No one likes a budget increase, but we cannot watch our neglected infrastructure crumble, the disadvantaged suffer, or our City becomes less livable. In the absence of past stewardship and appropriate support from other levels of government, we need to step up, put our money on the table and get Hamilton back on its feet.