Budget Committee Approved 2027 Budget Framework

Budget Committee approved the framework for the city's 2027 budget, including a September 8, 2026 forecast update, January 2027 committee deliberations, and a later mayoral budget tabling under Mayoral Decision 05-26. Members focused on how to fund capital repairs and replacement over the long term, with staff warning that if the city stays at a 1.5 per cent capital levy, "we're going to run out of tax supported funding for tax supported repair and replacement um about 2032." The committee also reviewed development charge delays tied to Bill 17, proposed water, wastewater and stormwater rate increases, and a citywide fee review for programs and services.

Topics Discussed

1. 2027 budget process and capital funding plan

Under file CRC CF SRC FS 26022, the committee approved a multi-stage budget process. Staff will return on September 8, 2026 with year-end operating and capital forecasts, followed by January 2027 Budget Committee deliberations before the mayor tables the 2027 budget.

Treasurer Gigi Lee said the process is being launched under mayoral direction: "To comply with the strong mayor powers of the municipal act, the mayor has directed staff to begin the 2027 budget process through mayoral decision 05-26."

Lee said the proposed 2027 capital budget totals $121.6 million, including: - $35.6 million from tax-supported reserve funds - $37 million from water and wastewater reserve funds - $17 million for stormwater management - $24 million from development charges - $7 million from the parkland reserve fund

Staff said the budget strategy is tied to the city's asset management plans and financial master plan.

2. Capital sustainability levy and infrastructure funding gap

A central discussion was staff's recommendation to increase the capital sustainability contribution from 1.5 per cent to 2 per cent, as a step toward 3 per cent.

Staff told the committee: "The city's financial master plan identified growing pressures on the city's ability to fund infrastructure assets and the renewal of them. So it did recommend an increase a gradual increase from 1.5% to three 3%. So that that is the goal."

Councillor Carol Davidson underscored the consequence of leaving the levy unchanged: "if we continue to do what we're doing at 1.5% on a capital asset levy... we're going to run out of tax supported funding for tax supported repair and replacement um about 2032."

The committee also heard that the city is trying to manage affordability while avoiding a larger infrastructure shortfall. In response to questions about the levy, staff said, "So we're trying to find that balance where we are on the one hand managing and prioritizing our expenditures based on the income the level of income that we have but at the same time we need to maintain long-term sustainability."

Davidson argued for gradual increases rather than waiting for a larger jump later, saying, "the city's heading into the next 10 years really strapped. So why can't we do small little incremental increases?"

3. Development charges, reserves and possible debt financing

Committee members discussed the impact of Bill 17, which staff said delays development charge collection until occupancy and creates cash-flow pressure for capital planning. Notes before the committee said the provincial changes would reduce development charge revenue by about $44 million over three years.

Staff also reviewed reserve projections showing tax-supported reserves could fall below zero in the 2033 to 2035 period before recovering.

In response, staff outlined three approaches: phasing and prioritizing capital projects, increasing tax-supported contributions, and using debt selectively for major works. Councillor Scott Thompson said, "Our more conservative approach right now is to align our capital spending with expected cash flow and reducing the risk of overcommitting what we have."

4. Proposed rate increases for water, wastewater and stormwater services

The committee reviewed proposed 2027 rate increases of: - 6 per cent for water and wastewater - 10 per cent for stormwater management

Staff said, "These adjustments will keep our rate supported services financially sustainable and they're consistent with the long-term financial plan that council has already approved."

The presentation linked the increases to inflation, economic volatility, tariffs, supply chain disruption and growth uncertainty.

5. 2027 tariff of fees review

Staff presented a review of 1,284 fees, projecting about $615,000 in additional annual revenue, including $575,000 for the operating budget and $40,000 for rate-supported budgets.

Most fees would rise by 2 per cent, in line with projected inflation, while some recreation and culture fees would increase by more than 2 per cent. Staff said fee-setting is based on three tests: "Fees should be justifiable and reasonable for cost recovery, comparable with neighboring municipalities, and affordable to our residents and users while remaining competitive."

Mayor David West asked what happens when someone wants to join a recreation program but cannot afford the fee: "What mechanisms are available to us to be able to allow that?" Staff said an income-based subsidy program is available and has strong uptake.

Deputy Mayor Godwin Chan argued that some fees should also be considered in light of community benefit, saying community centre rentals support "cultural groups educational seminars" and "connecting a community to come together."

Motions

Passed: - 2027 Budget Strategy / staff recommendations (File 5.1 / CRC CF SRC FS 26022) - Measure related to the community services fee item discussed near the end of the meeting

Attendees

Councillors identified in the meeting notes as present: - Carol Davidson - Godwin Chan - David West - Scott Thompson

Also listed on council: - Michael Shiu - Simon Cui - Karen Cilevitz - Castro Liu - Joe DiPaola