THUNDER BAY — City council has approved the 2026 budget direction and calendar, setting the framework for next year’s operating and capital budgets with a targeted municipal tax levy increase of 2.6 per cent.
The motion passed with no opposition.
The budget direction, presented by city treasurer Keri Greaves, caps the levy increase at 2.6 per cent before growth for services under the city’s direct control. Council also moved to a two-year capital budget covering 2026 and 2027, with the second year’s levy limited to 2.1 per cent.
Council endorsed a change to the Tbaytel dividend policy, directing a portion of the annual dividend to capital projects. This is expected to boost capital investment by five per cent annually. Local and outside boards and agencies are being encouraged to align their 2026 budgets with the 2.6 per cent target.
City manager John Collin said the 2.6 per cent will be difficult this year.
“Last year, we recommended 3.8 per cent, which the council approved, and that was difficult. To get from 3.8 to 2.6 per cent will be a challenge. We believe we can do it without having a significant impact on the delivery of services or programs.”
Collin said the council essentially has two choices: “2.6 per cent and tap into reserves for this amount, or, if you don't like that, increase the rate to higher than 2.6 per cent to not tap into reserves.”
Greaves noted the city has about $10.1 million uncommitted in its stabilization reserve, giving flexibility to respond to unforeseen circumstances. No increases are being built into the budget as a contingency.
Capital budget deliberations begin Nov. 24, with the final operating budget vote scheduled for Jan. 22.
