Staff warned Simcoe County councillors they could be asked to approve the biggest tax hike in more than five years as increasing costs add pressure to the over $638 million annual budget.
Some of the increases predicted this year include an 18 per cent rise in insurance rates, 12 per cent jump in natural gas costs, three per cent more for electricity and water. Ontario Works caseloads are also expected to rise by five per cent.
Staff estimate a tax levy increase of three to five per cent in 2023 – the highest year-over-year increase at the county level in more than five years.
During Tuesday’s (Aug. 9) County of Simcoe committee of the whole meeting, councillors received two reports – one covering the major hike in insurance and another outlining high-level budget assumptions for 2023 – painted a picture of how the rising costs of everything will shake down to county service delivery next year.
“We are seeing a challenge in maintaining our service levels,” the county’s General Manager of Corporate Performance Trevor Wilcox told councillors. “The tax increase between three and five per cent will help us to maintain our existing service levels and maintain a reasonable amount of operating balance.”
Since at least 2016, the County of Simcoe tax levy increase has been kept at two per cent with two exceptions: in 2018 it came in at one per cent, and in 2021, there was no increase.
“County staff did inform us there would be consequences of going with zero per cent,” said Adjala-Tosorontio Mayor Floyd Pinto during Tuesday’s meeting. “They said that down the road, we were going to pay the price with higher taxation increases, and the time has come.”
The 2022 County of Simcoe budget included a two per cent increase and amounted to $638 million in operating and capital spending.
“We helped people during the pandemic. Now, we have to move things forward. Costs are going up every year,” said Pinto.
Wilcox said that considering a tax rate increase of one per cent or two per cent would put pressure on the debt load carried by the county. He also said that while the county still does have some money in reserves, those reserves have been depleted in the past few years as they were used to keep tax increases lower while maintaining service levels in 2021 and 2022.
“When we reduce our levy ... it will increase the amount of borrowing we will need," said Wilcox during Tuesday’s meeting.
Wilcox also noted that the next four years will be significant for the county in terms of capital projects, such as investments into affordable housing developments underway in Orillia, Bradford and Barrie.
In regards to municipal insurance, the county’s insurance program covers the period of July 1, 2022, to June 30, 2023. In 2023, Intact Public Entities submitted a quote of $5,168,517 to the county, with all coverage limits remaining substantially the same as the prior year’s policy.
This represents an 18.1% or $792,158 increase over 2022.
Rising municipal insurance costs were last discussed during county council’s Feb. 11 meeting, when council voted in favour of adding their name to a call for the provincial government to help deal with the situation.
According to the most recent staff report on the matter, cyber liability claims have risen dramatically in the last three years, which is one of many factors contributing to the hike in rates.
“It is anticipated that these claims will continue to grow at an exponential rate. The main reason for the increase is due to the growth of internet usage and the increased sophistication of hackers,” noted county treasurer Lealand Sibbick in his report to councillors.
Typically, the County of Simcoe’s annual draft budget is first presented in October, with final ratification in November. However, as this year is a municipal election year, the 2018-2022 council will instead see the budget in October and put forward recommendations to the 2022-2026 council. The 2022-2026 council is then planned to vote on finalizing the 2023 budget in January 2023.
During Tuesday’s meeting, Bradford West Gwillimbury Deputy Mayor James Leduc asked for an amendment that would have seen staff draft budgets with options for one-, two-, three-, four-, and five-per-cent increases
“I’d like to see those scenarios so we can see what type of service cuts would be at those proposed increases,” said Leduc. “I think it’s time to look at service cuts... but I’m not proposing cuts. I’m proposing that this is how we present this to the next council so they know what the alternatives are for them.”
Ramara Township Mayor Basil Clarke agreed with Leduc.
“I think we need to supply as much information as we can to the incoming council. We don’t know if any of us are coming back. It could be 32 new faces sitting here,” said Clarke. “We need to show them options.”
Wasaga Beach Deputy Mayor Sylvia Bray noted the 18 per cent increase to insurance.
“We know it’s not optional. We need to have insurance. Decisions we’ve made throughout this year will be reflected in this budget, and I think this amendment is creating three times the work for our finance department,” said Bray. “I think we need to see where things stand with the decisions we’ve already made.”
“This is unnecessary. I won’t be supporting this,” she said.
The amendment was defeated by a vote of 21-9.
The main motion to receive the budget assumptions and integrate them into the draft 2023 County of Simcoe budget was approved.
