Skip to content

Council cuts budget further, approving 5% tax hike

Thunder Bay’s city council has approved a 2023 budget that balances millions in new police spending with cuts to other city services.
Thunder Bay's city council has approved the 2023 budget after a month of debate. (Ian Kaufman, TBnewswatch)

THUNDER BAY – Thunder Bay’s city council has approved the 2023 budget after a month of debate, voting for a five per cent tax levy increase, a large expansion for police, and over two million in cuts to other city services – most of which remain a mystery for city administration to resolve later this year.

While the tax levy hike is around double the average approved under the last council, the city will cut some staff and take millions out of its reserves, thanks largely to increased police spending and a year of historically high inflation.

The tax hike will translate to an increase of roughly $71 per $100,000 of assessed value for the owner of a single-family home, staff estimated.

That figure would have been around $88 under the proposed budget brought forward by administration, which envisioned a 6.2 per cent increase that would have avoided service cuts.

Council opted to reduce the levy hike to 5.01 per cent, or 4.41 per cent after accounting for assessment growth, and restored over a million in infrastructure spending, over the course of eight budget meetings held in recent weeks.

That came down just slightly on Monday in the last of those meetings, after starting the night at 5.1 per cent.

The latest changes include cutting a proposed third yearly leaf and yard waste pickup day, reducing evening hours at city pools, and trimming back a large proposed pay hike for members of the Thunder Bay Police Services Board.

Staff warned cutting the yard waste pickup, for a savings of $80,000, puts the city's strategy to meet new a provincially legislated waste diversion target at risk.

While council officially approved the budget Monday, much of how it will impact city services remains unknown, with administration directed to find over $2 million in staffing and service cuts by the end of the year.

That includes $500,000 in “service level reductions,” and $700,000 in savings through a “city manager organizational review” that will include staffing reductions – essentially offsetting some planned expansions in the budget this year.

The budget also sets the stage for further cuts in 2024.

After voting to blunt this year's tax increase by drawing $1 million from the rarely-used vested property reserve fund, council directed administration to find that amount in cuts in 2024.

Coun. Mark Bentz, who had opposed the move to draw on reserves, said it would plug a hole council had blown in next year’s budget.

“When you draw from reserves without a plan for reduction in spending, you’re basically adding a million to next year’s budget,” he said. “If you want to reduce the budget by a million dollars, we have to find those savings, and the best people to find those savings are the people that oversee the organization.”

Coun. Andrew Foulds reiterated his concern over how the cuts will impact public services, and opposed approving them without specifics.

Coun. Rajni Agarwal was one of several colleagues to push back, arguing containing the tax burden is equally important.

“We need to look for cuts,” she said. “We need to look for ways to improve our business, because at the end of the day, we do have a duty to every tax payer, every business, and every new prospective business and industry coming to Thunder Bay.”

“With higher taxes, we’re not going to bring them here… If we don’t have a good plate to serve, them they’re not coming.”  

Agarwal also suggested there’s no harm in seeking options for cuts, since council won’t be bound to implement them. City manager Norm Gale disagreed.

“Is there harm? Yes,” he said. “There’s an opportunity cost… When we do the work finding this, there’s lots of stuff we won’t be doing, because this is an enormous amount of work.”

“What I hope we don’t do is get sent on a fool’s errand. I think if the motion is adopted, council should commit – that matters.”

Like many crucial decisions in this year’s budget, the motion to find those cuts in 2024 passed on a close vote, 6-5.

Gale has suggested the cuts won't target emergency services or provincially-mandated operations like long-term care or childcare.

That reflects a growing trend of cutting from community services to fund unsustainable increases for police, as well as fire and EMS, councillors and staff alike warned on Monday.

Coun. Andrew Foulds argued city services that support quality of life were dying a “death by a thousand cuts,” pointing to Monday’s vote to cut Saturday evening swims at the Volunteer and Churchill Pools, for a savings of just under $18,000.

“This community is going to start looking a whole lot different than I want it to,” he said. “We’re going to become a municipality of emergency services and rebuilding roads, but safe places for kids to go, we no longer fund.”

Coun. Mark Bentz expressed similar misgivings.

“I support this budget, but I’m somewhat conflicted, because what this budget signals… is a continued reallocation of municipal dollars to emergency services, so you’re going to see those services that are valued in the community sacrificed for police, fire, paramedics, the DSSAB, the Thunder Bay [District] Health Unit.”

Outside of emergency services and outside boards like those, Gale has said, city spending is going up by less than one per cent.

The city's police spending will rise to nearly $60 million in 2023, up by seven per cent, or nearly $4 million this year. That figure has risen by nearly 50 per cent over the past five years, now making up roughly a quarter of the budget.

The main drivers of this year’s increase are a staffing expansion of more than 20 full-time equivalent employees at the Thunder Bay Police Service, and rising wages and benefits.

Local leaders have said they see no way to rein in police costs in the near term without provincial or federal help, which several councillors said Monday could set the stage for further service cuts to fund increases for police and other emergency services in future years.

Coun. Brian Hamilton closed Monday’s discussion arguing investments in the budget shouldn’t be totally overshadowed by spending cuts.

“We’ve talked for two weeks about cuts, service reductions,” he said. “There a ton of stuff that’s getting missed to some degree in these discussions.”

“There are a lot of really great investments we’re making in this budget – energy upgrades to the Canada Games Complex and the Fort William Gardens, the capital investments in the Fort William Stadium, the conservatory, the digital strategy, the cruise ships.”

Council approved the budget on a unanimous vote.

Ian Kaufman

About the Author: Ian Kaufman

Read more


push icon
Be the first to read breaking stories. Enable push notifications on your device. Disable anytime.
No thanks