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Newmarket considers tax increase to maintain infrastructure

Maintaining current budgeting would mean 42 per cent of Newmarket’s road network would be in very poor condition by 2070, analysis finds
Sept. 29, 2021
Joseph Quigley

Newmarket may need to increase taxes by three per cent annually to maintain the service levels of its infrastructure, according to an analysis by WSP Canada.

Although the town has a good financial position because its infrastructure is relatively new, it will have to start spending significantly more than currently budgeted over time to build up reserves and pay for infrastructure rehabilitation down the road, council heard during a presentation Sept. 27. 

Newmarket Mayor John Taylor said given the town is already planning a tax increase of about one per cent for asset replacement, it could amount to an annual 4 to 5 per cent tax increase to address future asset needs.

“We still have work to do to understand it and understand our options for addressing it,” Taylor said. “But having a four or five per cent tax increase for 50 years, I don’t want to be advancing decisions, but that’s very challenging.”

Maintaining current budgeting would mean 42 per cent of Newmarket’s road network would be in very poor condition by 2070. Paying to maintain service levels, potentially costing approximately $1.96 million annually toward reserves, would result in less than five per cent of roads having poor quality.

Newmarket’s capital reserves are the lowest in the GTA per capita, $67 per person as of 2019. However, the WSP analysis said that is not an immediate issue given the young age of Newmarket infrastructure.

Deputy Mayor Tom Vegh said it would cost households about $32 annually to reach reasonable targets, but delaying asset management funding would just increase that cost.

“If we don’t act today, pushing it off, just means that we’re going to have to spend more next year,” he said. “The real constant here is the deterioration rate of our assets.”

Council made no decisions on the matter at the meeting but are due to review a draft budget Oct. 4.

Taylor said York Region changed policy 10 years ago to dramatically improve reserves, which are now the highest in the GTA per capita at $2,191 per person. He said Newmarket could do similarly with its young assets.

“This is a good point to start to turn the ship a little bit,” Taylor said. “You don’t want to do it so dramatically that the passengers on the ship start tilting or running to one side or the other.”