Mississauga’s proposed budget hints at trouble ahead

A 3 per cent property tax hike in the works doesn’t yet account for lost development fee revenue from Doug Ford’s housing bill

Thestar.com
Jan. 10, 2023
Tess Kalinowski

Mississauga’s proposed 2023 budget isn’t asking taxpayers to help make up revenue the city expects to lose this year due to Premier Doug Ford’s provincial housing bill -- at least not yet.

City staff is proposing a 3 per cent hike to residential property taxes this year. That could still change, but even if city council doesn’t raise taxes further this year, civic officials have warned that a substantial boost might be coming in the future due to changes to the development and parkland fees developers pay municipalities under the new provincial rules.

This year’s budget doesn’t include any money to fill what Mississauga has estimated will be a $30 million to $50 million annual revenue loss for the next 10 years from the province’s Bill 23, the More Homes Built Faster Act.

The municipal budgeting process was well underway before Queen’s Park introduced the act in the fall, said chief financial officer Shari Lichterman. There will be some impacts this year but those can be absorbed through reserves and other adjustments, she said.

Although municipalities have a good idea of the impacts of Bill 23, they still don’t have the details and they need more time to analyze them, she said in an online news conference on Monday.

“The other thing is that the province has spoken about conducting an audit of municipal reserves and potentially providing some sort of compensation to municipalities. We certainly want to give the province the opportunity to follow through on that and to see what level of compensation we can expect,” she said.

The financial implications will vary over the years depending on development activity at the time, said Lichterman.

Ford has said the new development charge rules will help Ontario meet its goal of building 1.5 million homes in the next decade by eliminating and freezing the amounts cities can charge developers for affordable housing and parkland contributions.

Mississauga Mayor Bonnie Crombie did not return a request for comment on Monday. But she and city councillors have warned that the impact will be devastating to cities.

In December, Mississauga residents received postcards saying that Bill 23 would “take a big bite out of your quality of life,” including a five to 10 per cent property tax increase.

City manager Paul Mitcham said it’s still possible that council will adjust this year’s proposed budget to backfill some of that revenue.

“The impact of Bill 23 on the municipality is unsustainable from our point of view. It’s close to $1 billion over the next decade between development charges and cash flow,” he said.

That implies “a very large” city tax rate adjustment in the 8 to 10 per cent range.

“It remains to be seen really what council will do. Council have basically stated that they want, need and expect every penny to be reimbursed,” said Mitcham.

Mississauga’s budget priorities this year are reducing road injuries through Vision Zero and automated speed enforcement and, pre-emptive fire inspections.

The proposed net operating budget of $634.5 million for 2023 is an 8.2 per cent increase over the 2022 budget. The city is proposing a $391 million capital budget, 56 per cent of which goes to maintaining infrastructure. Council begins its budget discussion on Monday.

The Region of Peel is proposing a 2.8 per cent property tax hike on its portion of the bill.