Hamilton’s Audit, Finance and Administration Committee spent much of its May 7 meeting on whether to offset a 4% indexed increase in development charges scheduled for June 1, 2026, with delegates from the homebuilding industry arguing the market is in a “severe downturn” and staff warning that foregoing the increase could shift costs to taxpayers. The committee ultimately approved a temporary 4% partial exemption for all forms of development on a 7-2 vote. Members also approved a fair wage policy change, reviewed investment and budget variance reports, and discussed delays in producing the city’s audited financial statements.

Topics Discussed

1. DEVELOPMENT CHARGES AND HOUSING COSTS

Committee members debated the 2026 Development Charges Index Report and options for responding to the 4% automatic increase set for June 1. Staff said any change would need committee approval and council ratification before that date.

Delegates from the building industry urged the city not to increase charges. Danny Gabriel said, “We are not operating in a normal housing market. We are in a severe downturn. Projects across Hamilton are being delayed, shelved, or cancelled. Not because builders are cautious, but because they no longer make financial sense.” He added, “When costs rise beyond what buyers can afford, supply doesn't increase. It disappears.”

Staff presented alternatives, including a temporary partial exemption for residential development only or for all development. General Manager Mike Zagarac said staff were “not changing their recommendation” but had laid out options with their “strengths or challenges, pros and cons.” Staff also cautioned that “the risk of foregoing the indexing of DC’s” is that the city may have to “turn to existing taxpayers and rate payers to offset that foregone indexing benefit.”

The committee approved Alternative 2, a temporary 4% partial exemption for all forms of development, by a 7-2 vote.

2. MARKET CONDITIONS, APPROVAL DELAYS AND JOB IMPACTS

Delegates tied housing affordability concerns to financing conditions, municipal charges and slow project timelines. Gabriel said the industry had “reached the point of diminishing returns on housing charges,” arguing that additional increases now “do more harm than good.”

Committee members also discussed whether fee reductions alone would restart stalled projects. Councillor Croach noted that downtown projects already receive substantial discounts and asked why construction was still not proceeding, saying there are sites “not being built despite there being 55% discounts on development charges.”

Delegates and councillors also pointed to broader economic effects. One speaker said job losses in construction were already mounting, warning that “if we continue on that path then we will just continue to see more cuts.” Another delegate said tradespeople were effectively being asked to absorb delays and cost pressures: “What we're really asking our trades to do is take a haircut and subsidize our projects with their wage rates.”

3. FAIR WAGE POLICY CHANGE

Under Item 9.1, moved by Councillor Cooper and seconded by Councillor C. Wilson, the committee approved a change to the city’s fair wage policy reducing the wage lag from two years to one year. Hourly compensation rates will now be updated annually on the first Monday in May using the most recent ratified collective agreements.

During debate, Councillor Brad Clark raised concerns about wording in Section B, particularly the phrase “no more than 24%.” He asked staff to revisit the language so the policy’s intent is clearer “2, 3, 4, 5 years from now.” Staff said the figure reflects 20% for benefits and 4% for vacation entitlement. The motion passed 9-0.

4. CITY FINANCES, INVESTMENTS AND REPORTING DELAYS

The committee reviewed investment reports FCS26025 through FCS26028. Staff said reserve fund investments outperformed benchmarks in 2025 and that roughly $4.5 million in investment income supports the tax levy, with the balance allocated to reserves.

Members also discussed FCS26015, the 2025 Tax and Rate Operating Budget Forecast Variance Report. Staff said the city is projecting a $20 million surplus. Of that, $5.9 million had already been included through the 2026 budget process to reduce the levy. As staff explained, “the 5.9 relates to our 2026 budget process,” where council adopted the use of forecasted 2025 surplus to lower the 2026 levy.

Councillors also pressed staff on delays in audited financial reporting. Staff said audited statements for 2024 and 2025 are now expected in 2027, but they would try to provide an unaudited interim financial statement by the end of August.

5. AUDITS, WHISTLEBLOWER REPORTING AND OTHER BUSINESS

The committee received the Auditor General’s Fraud, Waste and Whistleblower Semi-Annual Update (AUD260005). Auditor General Charles Brown said the increase in reports likely reflects greater awareness of the hotline: “with more reports and more investigations being reported, especially with the public becoming more aware of our fraud and waste hotline generates more complaints.”

The committee also discussed PED26077, an audit of corporate real estate leases and licences. Members said they wanted stronger oversight of lease administration and implementation of the audit recommendations. The committee also approved FCS26044, dealing with Bill 98 amendments to the Development Charges Act, 1997.

Motions

• AFA26005 - Minutes from previous meeting (April 16, 2026): received/adopted
• Item 9.1 - Fair Wage Policy amendment (reduce wage lag from two years to one year): passed 9-0
• FCS26032 / FCS26032A - 2026 Development Charges Index Report / supplementary report: received
• Alternative 2 - 4% temporary partial exemption for all developments: passed 7-2
• HSC26012 - Women and Gender Equity Advisory Committee transition: passed 6-1
• FCS26044 - Bill 98 amendments to the Development Charges Act, 1997: passed 8-0
• OBL amendments: passed 8-2
• Closed session minutes, April 13, 2026: adopted unanimously

Attendees

• Councillor Tadeson
• Councillor Brad Clark
• Councillor Rob Cooper
• Councillor Maureen Wilson
• Councillor Alex Wilson (online)
• Councillor Kroetsch
• Councillor Mike Spadafora
• Councillor Esther Pauls
• Councillor Nrinder Nann Kaur?