THUNDER BAY — The City of Thunder Bay’s 2025 proposed municipal tax levy increase is currently the lowest in Ontario among cities with more than 100,000 people, according to city manager John Collin.
Collin acknowledges some municipalities are still undergoing their municipal budget processes and have yet to release final figures. But so far, he said, there are only two cities that have set tax levy increases below 4 per cent.
“Ottawa's coming in at 3.9 per cent and we are coming in at 3.7 per cent,” said Collin. “And what we don't know with Ottawa is … we don't know how much, if they did tap into reserves to achieve that. Whether that includes all the costs from their agencies, boards, and commissions, we don't have that level of detail.”
According to Collin, this statistic provides a “competitive edge” that could entice people to plant roots in Thunder Bay.
The 3.7 per cent tax levy increase represents $7.8 million dollars in tax revenue, before growth, bringing the tax levy-supported portion of the proposed budget to $217.4 million. The total operating budget would be $448.8 million.
For homeowners wondering what this will mean for their tax bill, Keri Greaves, commissioner of corporate services and city treasurer said that the “estimated tax impact on every $100,000 of assessed (property) value is $66”
The increase is just under the target of 3.8 per cent, recommended by administration in August. At that time, Collin said that although city costs are projected to increase by six to eight per cent it’s worthwhile to “tighten our belts just a little” in order to remain attractive to investment.
Collin committed to finding efficiencies in the budget without significant service reductions, and on Friday, he said they were able to do that.
“Certainly nothing that the community will notice. We might cut back $10,000 within the delivery of service, but across the board, no significant reductions to any services within the city,” Collin said.
Although the city’s tax levy-supported operating budget is $217.4 million, the city expects to collect an additional $1.7 million due to assessment growth.
Assessment growth refers to additional property taxes collected from new and expanded homes and businesses, and would bring the total collected in municipal property taxes this year to just over $219 million.
“We are not going to further reduce the tax rate with growth revenue. We're taking the growth revenue, said Collin.
“We're putting it into reserve to grow more. So the proposed tax rate is 3.7 per cent, and that's all in.”
Through the new assessment growth reserve fund, Collin explained, that additional $1.7 million can be put towards initiatives aimed at increasing city revenues at a faster rate by increasing the city’s tax base with the hopes of effectively lowering the municipal tax levy over the next few years.
Thunder Bay’s property tax base has increased 7.8 per cent over the last 10 years, said Collin, but inflation has risen 32 per cent in that same time frame.
“So, by a factor of four, we're not keeping up with inflation. That's bad. That makes balancing a budget extremely difficult when your revenues aren't even keeping up with inflation,” Collin said.
Administration has pegged the property tax rate increase to the four-year rolling average for the Consumer Price Index (CPI), which measures inflation on consumer goods.
“I will tell you that municipal inflation is way more than that because of the specialized supplies, equipment and vehicles that we use,” Collin said.
He used the cost of new a fire truck or an ambulance as an example, stating the cost of emergency service vehicles has doubled in price over the last four years.
“That's 100 per cent over four years or 25 per cent per year inflation, so much higher than CPI, but that's not what matters to the consumer. What matters to the consumer is affordability to them, and that's why we use CPI as the measure,” said Collin.
Because of inflationary factors, the city has increased its contribution to the Superior North EMS reserve fund by $400,000 to replace ambulances that are at their end of life and allocated $1 million to a solid waste and recycling reserve fund to manage future levy impacts on the green bin organics program, which is now projected to roll out in 2026, said Greaves.
Wage increases are another source of pressure on the city budget, however increases to personnel costs (excluding WSIB costs) were capped at one per cent.
To meet that, administration offset wage increases by opting not to fill some vacant positions.
“We took a more pragmatic view of our vacancies within the organization. We know unfortunately that we can never fill all of our positions because recruiting is tough. We're making great strides towards improving that,” said Collin.
“But for 2025, we've taken a good hard look, evaluated how many vacancies we're going to have, and we've rolled that vacancy number into the budgetary process."
It is important to note that the proposed 2025 operating budget is still subject to debate and to council approval.
