Craig's Current - 2026 Budget Outlook

Council recently received a 2026 budget outlook from Staff. It is NOT the proposed budget. Rather, it is a current projection based on the information Staff have today to maintain current services, continue our asset management plans, and invest in key city building projects. The budget process begins when the Mayor issues a directive to Staff on priorities to include in the budget, which should occur soon. Staff will take that direction, incorporate those priorities, investigate cost reductions and efficiencies beyond the $19 million they included in their outlook, and present a budget to Council by January.

The outlook forecasts an 8.9% increase in property taxes. That is a large number, and we can likely agree that in any year, let alone one with the economic challenges thrust upon us right now, such an increase is a burden that Hamiltonians in 2026 should not have to bear. Through the budget process in January and February 2026, Council will need to make some very tough decisions to balance service levels and affordability as we make recommendations to the Mayor. Ultimately, as Provincial legislation dictates, it the Mayor's budget and she will decide to accept or reject Council's amendments.

I will provide updates on the budget process when it begins, but at the moment, I will share a summary of the financial pressures Council must contend with. There are several.

Nearly a quarter of the pressure is funding for Hamilton's Asset Management Strategy, which must deal with decades of chronic underfunding that has resulted in crumbling roads, deteriorating recreation centres and parks, and playgrounds well past their replacement date. These are debts that previous Councils have passed forward to the present, resulting in the well-publicized $5.2 billion infrastructure spending gap. Those are the funds required to maintain City assets in a state of good repair. We are currently in year three of a 10-year program that this Council initiated to close the gap on the annual deficit for our transportation network. However, our plan does not eat into the existing $5.2 billion gap.

Our recreation assets make up another large portion of the infrastructure spending gap. Council just received an updated Recreation Master Plan, and it laid bare the fact that, since the early 2000s, recreation assets and parks have been underfunded by $310 million. That's just to keep them in a state of good repair and is equivalent to a 24% tax levy impact. Our current situation could have been avoided with a modest 1% annual tax increase since amalgamation.

Continuing on the theme of City assets, a portion of the increase is to cover debt financing on revitalization projects like Macassa Lodge (one of two long-term care facilities owned and operated by the City of Hamilton), a new Paramedic station, our new Transit Maintenance and Storage Facility which will enable a dramatic expansion and update of Hamilton's transit network, and our Cybersecurity Strategy, among others. These projects - and several others -  are required to continue to meet the service levels that Hamiltonians expect and deserve, create conditions for economic vibrancy, and accommodate planned population growth.

The other significant pressure is on employee costs, which account for approximately 45% of Hamilton's annual expenses. The cost of living has increased significantly, and Hamilton must remain an attractive destination for workforce talent. We also need to honour collective bargaining agreements, which include fair wage increases. Similarly, Hamilton Police Services’ budget is over 90% staffing costs, and they have published a preliminary 9.48% increase in their spending.

The overwhelming theme of this budget outlook was maintaining existing service levels, catching up on long-overdue capital spending on deteriorating city assets, and doing so in a way that balances those challenges with affordability for Hamiltonians.

On that note, the City has launched a number of ways to get involved with the budget process, including public engagement sessions happening over the next week. I will be attending the September 22nd session at the Ancaster Rotary Centre.

In total, there are seven opportunities to engage with the Mayor, Councillors, and Finance Staff:

• September 18, 3:30 PM to 5:00 PM - Sackville Hill Seniors Recreation Centre

• September 19, 2:30 PM to 4:00 PM - Virtual (Meeting link will be available here)

• September 19, 6:00 PM to 7:30 PM - Carlisle Community Centre

• September 22, 6:00 PM to 7:30 PM - Ancaster Rotary Centre

• September 23, 6:00 PM to 7:30 PM - Binbrook Agricultural Society, Building 3

• September 24, 6:30 PM to 8:00 PM - Glendale Secondary School

• September 25, 6:00 PM to 7:30 PM - Hamilton Convention Centre

Each session will include remarks from Mayor Horwath, a presentation from our Finance Division, and a Q&A. Members of the City’s leadership team will also be available to meet with residents and answer questions about their program areas. Engagement stations will provide residents with opportunities to submit feedback, complete the Budget Survey, and explore interactive tools, including the Balancing Act Budget Tool and quick polls..

Feedback collected through the fall engagement sessions, survey, and the Balancing Act Budget Tool will inform the Mayor’s budget directive to Staff to be considered in the development of the 2026 budget, and will be presented to Council in November 2025

Information on in-person and virtual engagement sessions, the budget survey, simulator, and polls are at Engage Hamilton/budget

You can access the Budget Outlook presentation here and all of the related reports and appendices here. The video link to the Budget Council meeting is here.

Information on the budget process is available on the City of Hamilton's  2026 Tax and Rate Budget website.

Residents can also learn more about municipal budgeting on the City of Hamilton's  Budget 101 webpage.

Thanks, as always, to everyone who reaches out to engage with our office. I hope you enjoyed reading this month’s newsletter. Please share it with Ward 12 neighbours and friends. If you have questions, feel free to reach out to us at [email protected] and subscribe to the Ward 12 newsletter at CraigCassar.ca. Follow me on Facebook, Instagram, and Bluesky.