Members of city council get their first look at the 2026 draft budget this evening (Monday).
The 2026 draft budget proposes almost $79.5 million in tax-related spending, an increase from the city’s 2025 levy of just under $73 million.
This represents a proposed municipal levy increase of approximately 8.9 per cent.
Assessment growth for 2026 is estimated at 2.8 per cent.
When combined with the levy requirement, this results in an estimated municipal tax rate increase of just over six per cent.
City Finance Director Adam Boylan notes, “Overall, the 2026 budget maintains St. Thomas’s position as one of the more affordable municipalities in the province, though it should be acknowledged that the plan does not fully address the city’s longer-term capital and reserve requirements.”
One of Boylan’s cautionary flags is related to the city’s reserve funds.
“Staff estimate that by the end of 2025, the city will hold nearly $47 million in uncommitted reserves. Uncommitted reserves represent the portion of actual reserve balances not already allocated through prior council decisions, legislative requirements, or to approved capital projects, and they provide the most accurate picture of the funding available to address emerging needs.”
However, at the end of next year, the city is projected to have $28 million in total reserves across all categories.
Boylan notes the city holds less in reserves than many comparative cities.
Additionally, Boylan observes, “At present, the city’s annual budget and its asset management plan are not closely aligned. Funding constraints in recent years have limited the city’s ability to follow its own asset preservation strategies, resulting in project deferrals, shorter service lives and the transfer of unavoidable costs to future property owners.”
And finally, Boylan delves into the city’s extensive holdings in industrial land.
“The city’s industrial land holdings themselves represent one of its most valuable financial assets. With hundreds of acres scheduled for servicing, this land is expected to generate significant revenues upon resale. Very few municipal assets carry this level of market value or income-generation potential.
“While a portion of these proceeds will need to be directed toward development-related costs, the net financial benefit to the city is expected to be substantial.
“For residents, the long-term advantage of this strategy is clear. As industrial development proceeds, the city’s tax base broadens, allowing a greater share of municipal costs to be funded by high-yield industrial users rather than residential households. “
Written by Ian McCallum
