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The Finance and Corporate Services Committee today approved the Proposed 2026 Budget Directions, Timeline and Consultations Process.
The City continues its Service Review to drive innovation, find efficiencies and savings, improve market competitiveness, and increase engagement amongst staff, elected officials, residents and other stakeholders. The 2026 Budget Directions build on this process and demonstrate the City’s responsibility to the community it serves by building a safe, reliable and affordable Ottawa.
The City plans to keep the property tax increase at no more than 3.75 per cent. This includes:
The Transit Services Budget will also consider other levers including delays to capital investment, identify any funding related to the Province’s commitment to upload LRT, and securing investment from the federal government.
The Draft Operating and Capital Budget will be tabled at City Council on Wednesday, November 12. Each Standing Committee will meet in November or early December to consider their parts of the Draft Budget, and residents, businesses and community groups will be able to share their thoughts through various engagement opportunities. Council will vote on the final budget on Wednesday, December 10.
Committee gets update on 2025 budget
The Committee also received an update on its 2025 Tax, Transit and Rate Supported Programs Operating and Capital Budget. The overall deficit for the first two quarters is $7.5 million. The tax-supported and transit-supported results show a combined deficit of $16.3 million, which is driven by higher winter operations costs and the $6.6-million deficit due to higher Transit Services costs, delayed project implementation costs and lower than expected fare revenues. The second quarter rate-supported results show an $8.8-million surplus due to cost savings from position vacancies and higher than expected water consumption revenues. Ongoing savings efforts, including a discretionary spending freeze and a hiring pause, will help reduce the overall deficit.
The year-end forecast projects a deficit of nearly $37.3 million. The City is seeking $36 million in transit funding from other levels of government to help cover that deficit. Last year, the City updated its reserve policy to include a one-time mitigation measure of $36 million in the Tax Stabilization Reserve fund, which may be needed if no funding is received from other levels of government.
The City continues to monitor the impacts of US tariffs and the elimination of the federal carbon tax in April. The City has seen early signs of savings from the carbon tax removal, particularly in fuel-intensive services.
Committee updated on City’s 2024 investments, endowment fund and other Treasury activities
The Committee was briefed on the City’s 2024 Treasury activities. As part of its commitment to transparency and requirements under the Municipal Act, 2001, the City provides an annual report on its treasury activities and investments. As of December 31, 2024, the City’s long-term debt was $3.37 billion, up slightly from the year before. The City also added $1.89 billion in new assets, bringing the total to $31.25 billion. This means the debt is about 10.8 per cent of the value of the City’s assets. For comparison, this is like having a $54,000 mortgage on a $500,000 home.
There was $160 million of outstanding promissory notes at the end of the year, all of which matured and were paid back in January 2025. In 2024, the general fund returned 3.79 per cent ($110.3 million) while the sinking fund returned 2.97 per cent ($12.6 million). As of December 31, 2024, the market value of the Endowment Fund was $197.6 million. Payouts from the Fund in 2024 added up to $21 million, which was better than the annual return target of 6.5 per cent.
New Affordable Rental Housing property tax subclass proposed
The Committee also recommended Council adopt the new Affordable Rental Housing property tax subclass for multi-residential and new multi-residential classes for the 2026 taxation year. This would allow the City to provide property-tax relief of up to 35 per cent for qualifying affordable rental housing units. The Municipal Property Assessment Corporation (MPAC) will identify qualifying properties based on provincial criteria. Through the 2026 Tax Policy report, Council will then be able to set rates discounted by up to 35 per cent.
The new subclass represents another tool to increase Ottawa's affordable housing. If the tax discount is approved in 2026, staff will update the Affordable Housing Community Improvement Plan to prevent properties from receiving both full-tax discounts and grants calculated on pre-discount tax amounts.
Affordable Housing Community Improvement Plan (AHCIP) grant applications approved
The Committee also approved two AHCIP applications, requesting Tax Increment Equivalent Grants (TIEG) totaling approximately $9.3 million over 20 years. TIEGs are a financial incentive where a developer gets back part of the increased property taxes their project generates, helping offset the loss in operational revenue from the affordable units. These grants will support the delivery of 73 new affordable rental units across two developments, one at 299 City Centre Avenue and the other at 375 Codd’s Road.
City Council will consider the recommendations from today’s meeting on Wednesday, September 10.
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The City continues its Service Review to drive innovation, find efficiencies and savings, improve market competitiveness, and increase engagement amongst staff, elected officials, residents and other stakeholders. The 2026 Budget Directions build on this process and demonstrate the City’s responsibility to the community it serves by building a safe, reliable and affordable Ottawa.
The City plans to keep the property tax increase at no more than 3.75 per cent. This includes:
- Up to 2.9 per cent for Ottawa Public Health and the Ottawa Public Library
- Between 2.9 and 6.5 per cent for the Ottawa Police Service
- Between 3 and 15 per cent for Transit Services, and a transit fare increase between 2.5 and 7.5 per cent
The Transit Services Budget will also consider other levers including delays to capital investment, identify any funding related to the Province’s commitment to upload LRT, and securing investment from the federal government.
The Draft Operating and Capital Budget will be tabled at City Council on Wednesday, November 12. Each Standing Committee will meet in November or early December to consider their parts of the Draft Budget, and residents, businesses and community groups will be able to share their thoughts through various engagement opportunities. Council will vote on the final budget on Wednesday, December 10.
Committee gets update on 2025 budget
The Committee also received an update on its 2025 Tax, Transit and Rate Supported Programs Operating and Capital Budget. The overall deficit for the first two quarters is $7.5 million. The tax-supported and transit-supported results show a combined deficit of $16.3 million, which is driven by higher winter operations costs and the $6.6-million deficit due to higher Transit Services costs, delayed project implementation costs and lower than expected fare revenues. The second quarter rate-supported results show an $8.8-million surplus due to cost savings from position vacancies and higher than expected water consumption revenues. Ongoing savings efforts, including a discretionary spending freeze and a hiring pause, will help reduce the overall deficit.
The year-end forecast projects a deficit of nearly $37.3 million. The City is seeking $36 million in transit funding from other levels of government to help cover that deficit. Last year, the City updated its reserve policy to include a one-time mitigation measure of $36 million in the Tax Stabilization Reserve fund, which may be needed if no funding is received from other levels of government.
The City continues to monitor the impacts of US tariffs and the elimination of the federal carbon tax in April. The City has seen early signs of savings from the carbon tax removal, particularly in fuel-intensive services.
Committee updated on City’s 2024 investments, endowment fund and other Treasury activities
The Committee was briefed on the City’s 2024 Treasury activities. As part of its commitment to transparency and requirements under the Municipal Act, 2001, the City provides an annual report on its treasury activities and investments. As of December 31, 2024, the City’s long-term debt was $3.37 billion, up slightly from the year before. The City also added $1.89 billion in new assets, bringing the total to $31.25 billion. This means the debt is about 10.8 per cent of the value of the City’s assets. For comparison, this is like having a $54,000 mortgage on a $500,000 home.
There was $160 million of outstanding promissory notes at the end of the year, all of which matured and were paid back in January 2025. In 2024, the general fund returned 3.79 per cent ($110.3 million) while the sinking fund returned 2.97 per cent ($12.6 million). As of December 31, 2024, the market value of the Endowment Fund was $197.6 million. Payouts from the Fund in 2024 added up to $21 million, which was better than the annual return target of 6.5 per cent.
New Affordable Rental Housing property tax subclass proposed
The Committee also recommended Council adopt the new Affordable Rental Housing property tax subclass for multi-residential and new multi-residential classes for the 2026 taxation year. This would allow the City to provide property-tax relief of up to 35 per cent for qualifying affordable rental housing units. The Municipal Property Assessment Corporation (MPAC) will identify qualifying properties based on provincial criteria. Through the 2026 Tax Policy report, Council will then be able to set rates discounted by up to 35 per cent.
The new subclass represents another tool to increase Ottawa's affordable housing. If the tax discount is approved in 2026, staff will update the Affordable Housing Community Improvement Plan to prevent properties from receiving both full-tax discounts and grants calculated on pre-discount tax amounts.
Affordable Housing Community Improvement Plan (AHCIP) grant applications approved
The Committee also approved two AHCIP applications, requesting Tax Increment Equivalent Grants (TIEG) totaling approximately $9.3 million over 20 years. TIEGs are a financial incentive where a developer gets back part of the increased property taxes their project generates, helping offset the loss in operational revenue from the affordable units. These grants will support the delivery of 73 new affordable rental units across two developments, one at 299 City Centre Avenue and the other at 375 Codd’s Road.
City Council will consider the recommendations from today’s meeting on Wednesday, September 10.
Related topics
查看原文...
