I wanted to share a summary of the budget deliberations from the past few weeks, from my perspective. We have a final Public Participation Meeting on Tuesday February 27th starting at 4pm, and everyone is welcome to share their thoughts on the budget.

Staff presented Council with a draft budget in December 2023 that included increases of 6.2% in 2024 and a 5.2% 4-year average to address the costs to maintain existing services.  Staff also provided Council with the various options for potential investment and reductions, consistent with the desire of Council at the beginning of the process. Staff had already found over $10 million a year in savings and included that in the base budget.

After that, the Mayor tabled his budget using his Strong Mayor's Powers on January 31st 2024, largely based on the staff draft budget, which kicked off 30 days for Council to make amendments. At the end of four days of deliberations we have arrived at the following projected increases for the next four years:

If you want to see what that would mean for your property tax bill, checkout this calculator that CBC is offering.

To contextualise this, the average household will pay an additional $250-$350 each year on their property tax bill. To give some comparison, I pay $3,120 a year in property tax. With these increases, I will pay around $1,045 more a year by the end of 2027 ($271 in 2024, $298, 2025, $214 in 2026, $265 in 2027), which means I will pay $4,165 in 2027. Council will have an opportunity annually to tweak these increases during annual budget updates, but this is the projection for the next four years right now.

For more context, I bought my home for $295,000 in 2017, it’s assessed at $208,000 as of 2016 MPAC assessments, and I could probably sell for $500,000+ if I listed today. Property taxes are based on assessed values, and since MPAC hasn’t reassessed since 2016, we all have houses that are assessed less than what the house can sell for. When MPAC reassesses, it doesn't mean we automatically all pay more, it’s all relative to what the average increase or decrease values are for our area. Learn more here about how a reassessment could affect your property tax.

I will agree with residents in saying these increases are significant for Londoners. From 2020-2023, London saw an average of 3.4% increases. The 2024-2027 increases are pretty much double that, and I understand for many that creates economic hardship. Unfortunately municipalities across Ontario are suffering from similar cost increases. The construction price index has gone up substantially, inflation and supply chain disruptions also impact municipal budgets. All to say - I think we can all agree that property taxes are not an effective tool for municipalities to use to pay for a growing city. London, and most Canadian cities have been advocating to the federal and provincial governments for a new municipal growth framework, that provides cities with new tools and revenue sources so we aren’t mostly relying on property taxes, which don’t take into account the resident’s ability to pay and aren’t tied to economic growth. Read more here.

I know affordability is a struggle most Londoners are dealing with, and that property tax increases is one of many you have faced recently. Most Canadians will pay $700 more on average at the grocery store in 2024, and that’s just on corporate greed. As Councillors, we know that these increases are causing anxiety and frustration in the community given the significant increase, especially in comparison with London’s historical property tax increases. I wanted to review a few areas to explain how I see our budget shaping up.

Transit

The Mayor did include in his budget the LTC operational increase of ~9% a year, and 50% of the paratransit increase that the London Transit Commission was seeking, but no new Service Growth Hours for conventional Transit. 

What does that mean? 

It means that we would keep the existing transit services for the next four years, without adding new buses or routes. I ride the bus, and I know many residents across London who use it as their only transportation option. Council was able to add 18,000 new hours each year from 2024-2027 to the budget so that transit service can grow alongside our growing population, and help us meet our climate targets. The London Transit Service has been historically underfunded, coming in at the bottom of their peers for municipal contribution (see LTC comparison chart below). I am hoping that we slowly see that trend reverse and that London's transit system becomes more reliable for all users. 

Library

The Library had a variety of business cases, including money for capital repairs to buildings, increased operational expenses, new collections spending and a mental health worker for the Central branch. They will receive a 7% increase for 2024, 6% 2025, 5.1% 2026 and 5.2% in 2027, although this was well below their requested amount. Council did allocate one year of funding for the mental health worker, and some money from reserves for new collections and digital items. Overall the amount was well below what the library was seeking, and their leadership has made reference in the media a few times to the negative impact this will have on their future operations.

Climate Change / Environment

The biggest win for the climate portfolio was getting some new growth hours for transit. Unfortunately, the investment in transit services came at the cost of an amendment to remove $1 million a year from the Climate Change Reserve Fund, which was already a fraction of what staff had proposed (originally staff suggested $4 million a year for 4 years, for a total of $16 million by 2027 to spend on new climate initiatives). We will now contribute $6 million over 4 years to this fund.

The Mayor did include some funding to help homeowners improve the energy efficiency of their homes, which we will be able to leverage with federal dollars as well. Stay tuned for details on this program.

An exciting business case that saves money is the naturalising of our boulevards across the city. Where possible staff will identify areas that they can plant native species that don’t require mowing, which will cut down on gas costs and emissions. This was included in the budget. As well, Council voted to add one new staff member to the ESA management team to help protect and maintain our environmentally significant areas.

I tried to secure funding for the Silver Creek Restoration project, which would have improved the ecological health of an area in the Coves ESA, but unfortunately that was not successful. I also tried to secure $300,000 a year for the in-boulevard bike lane maintenance, but that was also unsuccessful. 

Overall on the climate change portfolio, we likely did not make the necessary investments to achieve our climate targets, but I remain ever hopeful that we will achieve them through sheer grit and determination. 

Police Budget

Police spending is 5% of 2024’s tax increase of 8.7%. Currently the LPS is getting 100% of their budget ask of $672 million over 4 years, with which they will be adding 189 new FTE’s, as well as modernising their processes and procuring new equipment like tasers, drones, cellphones, a 2nd LAV and new fleet. Council can reject the police budget or make amendments, but the London Police Services Board can choose to take Council to OCPC (Ontario Civilian Police Commission). Historically, the OCPC forces municipalities to fund the police budget. 

I will say very clearly, it is the right of Council to reject or amend police budgets, and that the request from the London Police Services is significant compared to “normal” increases (they are asking for 28% more, whereas the city itself is asking for a 5.4% increase for 2024). I believe that if Council trimmed a small amount of funding from the LPS budget, that OCPC wouldn’t necessarily side with LPS given their very large budgetary ask, but that's my opinion. I have made attempts to reallocate funds from the LPS budget to other important services, but have not secured the support of the majority of Council.

I have said it at budget committee and I’ll say it again here. I am worried we will spend $672 million on more policing and not see a significant change in community safety. The most cited metric that LPS talks about is their response times. 

Right now, on average, a 

• Priority 1 (Emergency) call is responded to in 9 minutes and 30 seconds. 
• Priority 2 (Urgent) takes 6 hours and 48 minutes. 
• Priority 3 (Non-urgent) takes 107 hours and 54 minutes (4-5 days). 

We can all agree these aren’t ideal. But to me, success is not a Priority 3 call going from 4-5 days, to 1 day (I mean, that’s nice and I’ll take it). Success to me is that we drastically reduce Priority 3 calls, because we have met people’s basic needs and significantly reduced how many non-urgent calls LPS receives. 

I want to see less calls to LPS in the first place. A significant reduction in Priority 3 call volume to LPS requires significant investments in housing, social services, arts, recreation, education and healthcare. 

Provincial Downloads & Legislation

The province has downloaded or provincially mandated a lot of programs to municipalities. For example, Bill 23 exempts development charges for affordable and attainable housing as well as parkland dedication, and deductions for rental residential constructions. It essentially told cities that they had to tax residents to subsidise development, and one day cities might “be made whole”, a vague promise with no details. 

In London, that means we are forced to tax residents $21.5 million over 4 years to cover this budget gap, with $3.3 million in 2024 for Bill 23 impacts. Council had a long discussion about how we do not want to tax Londoners for this money, and await for the province to make good on its commitment to “make us whole” and give us $21.5 million to foot the bill they created. Overall, .43% of the 8.8% increase is directly attributed to provincial legislation. 

On top of that, I would argue that the hidden provincial downloads are significantly more. For example, London pays for police services and a portion of ambulance services. Right now, our ambulance budget has gone up 17.9% in 2023 and will see an average of 6.9% increases over the 2024-2027 budget, and the majority of that is because ambulances are sitting at hospital emergency departments, waiting to offload to the hospital. Offload delays have jumped over 200% since 2021.

Therefore, citizens of London have to pay more on their property tax because our paramedics services have increased, because our ambulances are waiting in the emergency department to offload patients for hours. While this is not a direct download from the province and federal government, in my opinion it is a hidden download that is occurring because we aren’t meeting people’s basic needs of housing and healthcare.

In regards to provincial and federal downloads through our police services, mental health calls, as well as homelessness calls to the police have significantly increased. In order to address these issues, we need to see a massive increase in social assistance (ODSP, OW) rates and for all levels of government to prioritise the most cost-effective upstream solutions and work together to solve these problems. 

It’s simple. 

If people are housed, fed, provided healthcare, given education and opportunities, they will actively participate in society in a healthy way. If people are denied housing, food, education and healthcare, they will do what they must to survive. If governments do not provide the basic necessities of life to everyone, we will instead spend significantly more money addressing the negative outcomes of people trying to survive. And at the end of the day, there is only one taxpayer. Would you rather your taxes go to preventative solutions, or expensive reactive interventions?

At the end of the day, municipalities need a new deal. We need new revenue tools, and we need to work with the province and the federal government to review our jurisdictional responsibilities. Until then, municipalities must do what they can to address the social, environmental and economic issues we have in our communities with the tools we currently have.

More Resources:

• Social Economic and Prosperity Review: AMO's 2024 Pre-Budget Submission
• Municipal Growth Framework