Should the Waterloo Region’s 9.5 per cent tax levy be cut or stay where it is?

The regional operating budget pays for roads, transit, housing, homelessness initiatives, water, paramedics and police services

Thestar.com
Feb. 17, 2023
Liz Monteiro

Regional council is staring down the biggest tax increase in at least 15 years.

Some councillors won’t accept a 9.5 per cent tax hike and want cuts, others are unsure where the cuts will come from and at least one politician says the region’s job is to offer services and that taxpayers are getting a fair deal.

The proposed 2023 regional operating budget is $1.43 billion. It includes massive expenditures for roads, transit, housing, homelessness initiatives, and paramedics and police services.

This year’s spending is up by just over 11 per cent from last year.

It also includes user rates for water and waste water, landfill tipping fees and airport fees.

“I think Wednesday is going to be really challenging,” said Coun. Colleen James.

“We are looking at 9.5 per cent and it’s a lot. It’s heavy. Many of us have been hearing from a lot of the community who are really just worried about what this impact could be on their ability to just survive, pay their bills and mortgages,” she said.

Waterloo Mayor Dorothy McCabe said in some areas such as transit, councillors may need to hit “pause” and move those asks to future years.

“We’ve going to have some really difficult conversations on Wednesday,” she said.

McCabe said she isn’t against leaving the increase right where it is.

“We’re in really unprecedented times, facing inflationary increases on every aspect of the services that the regional government provides,” she said.

The Region of Waterloo tax hike of 9.5 per cent would add $142 to the average household tax bill. The police budget, which accounts for about one-third of the regional tax bill, would add another $50, for a total average increase of about $192. When both police and regional spending increases are taken into account, the proposed increase on the regional portion of property taxes works out to about 8.8 per cent.

“We deliver the services and programs that the community is demanding and asking for. It’s a lot of service, a lot of important service that people get for approximately (an additional) $200 a year,” McCabe said.

Many community groups and organizations have also come to council asking for more grant money. Some councillors want to see a more streamlined grant process rather than have groups ask councillors for money just days before budget approval.

“Why do we need to be in the business of everything? We can’t be everything to everyone either,” said Coun. Michael Harris said.

But James said many of these organizations are doing “amazing” work. “When I think about lowering that number -- at the expense of what. At the expense of services? We are a service provider.”

Regional councillors are set to approve the budget on Feb. 22. They have a marathon budget day planned and a council meeting in the evening for final approval.

Here is a breakdown of some of the big issues.

Inflation
The region’s top finance officer, Craig Dyer, commissioner of corporate services, said inflation is one of the biggest cost factors in this year’s budget, adding $37.6 million because of soaring fuel prices, increasing costs of service contracts and rising construction expenses.

The region sets its fuel budget the year before, projecting costs with reasonable estimates. No one anticipated the jump in fuel that occurred, he said.

“That’s a big budget line item for us, particularly in transit and diesel,” Dyer said.

Policing
The proposed 2023 police operating budget of $214 million is an increase of $18.3 million over last year. Police want to hire an additional 55 officers over the next three years, including 19 in 2023.

The additional $18.3 million means a 7.22 per cent increase in the police portion of the regional property tax bill.

Coun. Rob Deutschmann asked councillors to send the police budget back to police management to find cuts. Eight councillors supported his moiton, eight were opposed. A tie means the vote was lost, according to regional procedures.

James, who was disappointed with the vote, said she isn’t giving up. She would still like to see the police budget lowered.

“I don’t think it can be completely ruled out until there is a finalized regional budget, and I’m hanging on to that,” she said.

James said many households and employers are cutting costs, and asking the police “to come back with something smaller is a fair ask.”

McCabe agrees, and hopes police will trim their own budget before council approves its budget.

“I would hope they hear what the community is saying,” she said. “That would really help relieve some of the pressures that we’re feeling.”

Just as the community is divided on how police should be funded, with some wanting more of taxpayers’ money going toward upstream preventive services, there are also defined camps within regional council.

Coun. Michael Harris, the head of the region’s budget committee, refers to himself as a fiscal conservative. He supports increasing the police budget despite significant cost pressures facing the region due to inflation. It’s what the community wants, he said.

“At a time when our police resources are already stretched thin in ever-growing communities like ours, now is not the time to turn our backs on the additional police resources that are required to properly serve our community and keep it safe,” he said.

Harris said the debate on the police budget is an “ideological one between those that simply want to defund the police” and those who do not.

“When four bad guys are smashing the cases at Raffi Jewellers in Waterloo, you gotta call 911. When gun shots are ringing out in your neighbourhood, you’re calling 911,” he said.

Harris said regional council doesn’t have control over the details of the police budget, but it does over its own affairs.

During budget meetings last week, Coun. Doug Craig said he couldn’t support a 9.5 per cent tax increase. He asked staff to come back with suggestions, to lower the operating budget by one per cent to 1.5 per cent. Harris supported the idea but the vote was lost.

“Everyone seems to be just wanting to increase the budget at a time when regional taxpayers are seeing significant inflationary pressures of their own such as food, fuel, rent and interest rates,” Harris said.

Harris wants to see the services that people expect to be adequately funded “but not getting carried away with it either. It’s a balancing act.”

On the housing file, which also includes money for homelessness initiatives such as emergency shelters, the region is projecting to spend $125 million in 2023.

That’s up by nearly $18 million from 2022. Up until December, the region received provincial funding for homelessness expenses that are now paid for by the region.

Housing costs include measures council adopted last August to address chronic homelessness. Interim housing solutions include: adding emergency shelter space, creating transitional housing, specifically Indigenous-centred and Indigenous-led housing, rent assistance and opening a managed encampment. It is set to open on Erbs Road in March.

Paramedics
Waterloo Region paramedics have been coping with mounting call volumes and increasing numbers of “Code Reds,” when no ambulances are available to respond to emergency calls.

From January to November, Code Red incidents occurred four times as often as during the same period in 2021. In the first 11 months of 2022, paramedics had 87 Code Reds totalling 23.5 hours.

The 2023 budget includes $4.3 million more for paramedic services to hire more paramedics.

Transit
The budget includes $3.4 million for transit service expansion, adding more routes and increasing frequency of service. This adds up to more buses and more drivers.

McCabe said she would like to see free fares for kids under 18 and free fares for seniors a couple of days a week, but this year’s budget crunch is not the best time for those discussions.

Instead, these issues should be paused and discussed at a higher strategic planning level, she said.

“It really pains me to say transit may be the one thing to sort of lose a little bit,” McCabe said.