THUNDER BAY – The city is ready to start sharpening its pencils to get keep the 2026 municipal tax levy increase substantially lower than last year's increase.
At Monday's committee of the whole meeting, city staff will be asking for direction from council to target a municipal tax levy increase of 2.6 per cent for the city's 2026 operating and capital budgets.
Keri Greaves, city treasurer, told Newswatch that he’s “very confident” the levy increase can be kept to 2.6 per cent despite budget pressures such as the rising cost of wages and benefits, which are projected to increase by $6.9 million, according to the report to council.
"There's going to have to be some trade-offs, but the goal is to have potentially modest impacts on service levels.”
However, Greaves said “a lot of work has already been done in trying to identify efficiencies, and a lot more work is going to have to be done."
The levy is the total amount the city has to collect from taxpayers — residential, commercial, industrial and others — to fund municipal spending.
A 2.6 per cent increase would be roughly three-fifths of the 4.5 per cent increase in the 2025 budget (that included a $1.7 million contribution to a new growth assessment fund)
That 4.5 per cent tax levy increase translated into a 3.5 per cent increase in the residential tax rate this year.
Greaves said administration is taking the same approach as they did with the 2025 budget, pegging the increase to the four-year rolling average of the Consumer Price Index (a measure of inflation).
City staff will also recommend changing the yearly capital budget to a multi-year capital budget, spanning the 2026 and 2027 fiscal years.
“Having a multi-year budget, there are lots of benefits," Greaves said. "The primary benefit would be the ability to plan in the future, so the certainty of the budget allows us to plan for multi-year (spending), spread that over and work towards these larger projects and be able to have a little bit more cost certainty to make sure that can get the best price we can on those projects.”
Multi-year budgeting is permitted under the Municipal Act; however, the budget must be formally reaffirmed by city council each year, Greaves explained.
Moreover, city council can approve amendments in the second year of a two-year budget if new or amended legislation or regulation has a financial impact on the municipality, council takes on a new project not included in the original budget, significant changes to costs or revenue occur, or administrative adjustments happen that do not change the net budget but are required to support project delivery.
Greaves said the city's current budget policy is set up for multi-year budgeting, but there is some more work to be done to set up “parameters for how a multi-year budget would work in the city of Thunder Bay.”
He said that work is currently underway, and city staff are planning to bring an updated budget policy to council later this fall.
In addition to setting the 2026 municipal tax levy and implementing a multi-year capital budget, Greaves said they are recommending adding a provision to the Tbaytel dividend policy that would put five per cent directly to capital rather than operations.
The Tbaytel dividend policy is still being negotiated between the city and the company, but Greaves said the policy will be brought to council later this year.
He said administration is planning to bring the final capital budget for council to review on November 24, and the final operating budget on January 22.
