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THUNDER BAY – City council is expected to target a 3.8-per-cent municipal tax levy hike, before growth is factored in, for 2025.
The recommendation from administration will be presented to council on Monday night for approval. The report said the increase will support a “stable and predictable municipal tax levy mandate which will improve the city’s competitiveness in attracting and retaining businesses and community members.”
In 2024, the city had a tax-supported operating budget that included a municipal tax levy of $231,287,800.
On average, over the past 10 years, the tax-levy increase has been 3.5 per cent before growth, while the average taxable assessment growth was 0.6 per cent, 0.1 percentage points more than this year’s 0.5-per-cent projection, expected to bring in $1.1 million next year.
According to the report, the City of Thunder Bay faces a number of budget pressures in 2025, starting with an additional $5.6 million required to cover wages and benefits.
Materials and services are expected to cost $1.2 million more next year, while an additional $1.5 million is being set aside for council directed and approved initiatives and $1.7 million is earmarked for expansions to programs and services.
There will be a net increase of $1 million to capital and debt servicing costs, though user fee increases are expected to drop by $1.3 million.
The city plans to cap spending on personnel to one per cent, excluding WSIB expenditures, mostly through finding efficiencies and resource managements, though salary increases are covered in collective bargaining agreements.
The city also plans to limit capital investment on new projects to 20 per cent of the capital budget, with the remaining 80 per cent dedicated to the renewal of existing assets, part of the city’s plan to address an annual $31.9-million infrastructure deficit.
Council will also receive a report, by next July, detailing a plan to deal with $1.5-billion of infrastructure listed in poor or very poor condition.
In total, budget pressures within the city’s control are listed as requiring $9.7 million more than 2024, a 6.9-per-cent increase.
Though the city has limited control on the budgets of outside agencies, such as the Thunder Bay Police Services Board and the Thunder Bay District Social Services Administration Board, the report indicates organizations that fall into this category will be sent a letter asking them to keep the 3.8-per-cent tax-levy increase target in mind when they’re setting their own 2025 budgets.
Under the strong mayor powers granted to Thunder Bay Mayor Ken Boshcoff, he has until Feb. 1 to present a proposed budget to city hall, at which time the duty would revert back to council. However, earlier this summer Boshcoff indicated he will not use that power.
The tax levy is the amount of tax-supported money the city needs to cover budget costs. The proposed tax-levy increase is not synonymous with the tax-rate increase homeowners can expect, as council can choose to take a higher percentage of the increase from homeowners, commercial entities or the industrial tax base.
Council can add or subtract from the budget during budget deliberations early next year, which would also affect the proposed tax-levy increase required.
