Members of city council get their first look at the 2026 draft budget on Monday, and first impressions are somewhat concerning.However, most enlightening are the numerous cautionary notes documented by Adam Boylan, Director of Financial Services.
Although there is a long way to go before we have finalized operating and capital budgets, the preliminary hike to the municipal property tax rate is in the six per cent range.
The 2026 Draft Budget proposes almost $79.5 million in tax-related spending, an increase from the city’s 2025 levy of just under $73 million.
This represents a proposed municipal levy increase of approximately 8.9 per cent.
Assessment growth for 2026 is estimated at 2.8 per cent. When combined with the levy requirement, this results in an estimated municipal tax rate increase of just over six per cent.
At this time last year, we were looking at a bump in the municipal property tax rate of just under five per cent.
Remember, however, council and staff were able to whittle that down to a 3.93 per cent increase when the final budget was approved on Jan. 13 of this year.
The 2026 capital budget is about $80.5 million, which will require dipping into reserves to the tune of $19 million.
However, Boylan notes, “Overall, the 2026 budget maintains St. Thomas’s position as one of the more affordable municipalities in the province, though it should be acknowledged that the plan does not fully address the city’s longer-term capital and reserve requirements.”On the operating side, the greatest department increase is in the St. Thomas Police Service, where the 2026 budget is $21.6 million, up from $17.6 million this year.
We discussed this at length with Police Services Board chair Dan Reith and Chief Marc Roskamp back in August, and you can read the breakdown of the St. Thomas Police Service 2026 budget here.
The St. Thomas Fire Department’s 2026 budget is $12.3 million, up from $11.3 million this year.
One of Boylan’s cautionary flags is related to the city’s reserve funds.
“Staff estimate that by the end of 2025, the city will hold nearly $47 million in uncommitted reserves. Uncommitted reserves represent the portion of actual reserve balances not already allocated through prior council decisions, legislative requirements, or to approved capital projects, and they provide the most accurate picture of the funding available to address emerging needs.”
However, at the end of next year, the city is projected to have $28 million in total reserves across all categories.
Boylan notes the city holds less in reserves than many comparative cities.
“As a result, key strategic priorities in parks and recreation in particular will be difficult to advance without a larger share of capital funding sourced from taxation.”
He raises another flag related to the funding of infrastructure projects.
Boylan advises, “The current composition of the city’s annual capital funding places it in a structurally constrained position. At present, approximately 30% of tax-supported capital financing is derived from property taxation, even though property tax is the city’s most flexible and discretionary source of capital funding.
“This represents an unusually low share for a municipality of St. Thomas’s size and growth context. Transfers from upper levels of government are designed to supplement municipal investment, not form its foundation.”
He continues, “This limitation is amplified by the fact that roughly half of the city’s annual capital funding for tax-funded services comes from the Ontario Community Infrastructure fund, which is not eligible for a wide range of municipal capital needs, including parks, recreation facilities and fleet.
“At present, the city’s annual budget and its asset management plan are not closely aligned. Funding constraints in recent years have limited the city’s ability to follow its own asset preservation strategies, resulting in project deferrals, shorter service lives and the transfer of unavoidable costs to future property owners.”
“As a result, key strategic priorities in parks and recreation in particular will be difficult to advance without a larger share of capital funding sourced from taxation.
“Increasing the proportion of capital funding sourced from property taxation in future budgets is a strategic imperative as it would strengthen the city’s strategic control over its capital program, ensure compliance with legislated cost-share requirements for growth and provide the financial capacity necessary to maintain and renew the city’s asset portfolio in a sustainable manner.”
On a related note, Boylan points out, “At present, the city’s annual budget and its asset management plan are not closely aligned. Funding constraints in recent years have limited the city’s ability to follow its own asset preservation strategies, resulting in project deferrals, shorter service lives and the transfer of unavoidable costs to future property owners.
“This divergence between planned and actual lifecycle interventions increases long-term costs and reduces the city’s ability to maintain service levels as assets continue to age.”
And finally, Boylan delves into the city’s extensive holdings in industrial land.
“The city’s industrial land holdings themselves represent one of its most valuable financial assets. With hundreds of acres scheduled for servicing, this land is expected to generate significant revenues upon resale. Very few municipal assets carry this level of market value or income-generation potential.
“While a portion of these proceeds will need to be directed toward development-related costs, the net financial benefit to the city is expected to be substantial.
“For residents, the long-term advantage of this strategy is clear. As industrial development proceeds, the city’s tax base broadens, allowing a greater share of municipal costs to be funded by high-yield industrial users rather than residential households. “
Over time, this contributes to service stability, strengthens the city’s fiscal resilience and moderates residential tax pressures. Industrial employers also contribute beyond taxation by generating employment, attracting private investment, supporting local supply chains and stimulating regional economic activity.
“Despite these benefits, residents may question why property taxes are increasing in the short term. The primary reason is timing. There is a considerable delay between the announcement of major industrial projects and the point when full taxation revenues begin to flow to the city.”
With that in mind, is it true that PowerCo will not pay any municipal property taxes until the mid-2030s?
Does Vianode have a similar agreement with the city?
At this time last year, then city treasurer Dan Sheridan cautioned, “The development of Yarmouth Yards will require St. Thomas to take on significant debt in the next five years; it’s important that the city doesn’t incur any unnecessary debt during this time to maximize the municipal debt limit.”
Is it safe to assume the days of municipal property tax hikes in St. Thomas of three per cent or less are about to go the way of the Dodo bird?
A FAMILIAR PATH TO FILL COUNCIL VACANCY
The decision was made to again take the safe route, and so a familiar face is returning to the council chamber at city hall.
Joan Rymal has been selected to fill the seat vacated Oct. 14 by Steve Peters.
She will fill the role until the municipal election next Oct. 26.
Rymal previously served on council for two terms, between 2014 and 2022. She did not seek re-election in the 2022 municipal vote.
In the 2018 municipal election, she garnered 3,477 votes, beating out Jim Herbert by 60 votes to fill the final two seats on council.
Mayor Joe Preston observed, “We are pleased to welcome Joan Rymal back to city council. We look forward to working with Joan as she resumes her role in municipal leadership.”
In a media release, Rymal said, “I’m happy to take on this role and serve our community once again, and I look forward to contributing wherever I can make a difference.”
In her second term, Rymal was a fierce advocate for a new city animal shelter and questioned the need for a fundraising campaign.
In December of 2020, the centre was finally included in the city’s Strategic Plan, which prompted Rymal to offer the following comments.
“I do think the fundraising effort is really almost a barrier to getting the animal shelter redone. With a pandemic situation and people currently trying to fund for animals, which are going directly to animal care, which is quite costly.”
Rymal continued, “The animal shelter is just another piece of infrastructure like the police station, the fire hall and the social services building.
“It’s another piece of infrastructure, and you’ve got funds through the infrastructure renewal program.
“I know this is just a high-level item at the moment, but December 2023, that’s a long way off for that shelter and, as I’ve said, it’s an infrastructure project, and I also think there is a health and safety issue, and I would like to see that reconsidered as far as being an earlier date.”
That had been the point for several years; why is there a need to organize a fundraising campaign for a city infrastructure program?
There was no fundraising campaign for a new police headquarters.
Joan Rymal will be sworn in during the Dec. 8 council meeting.
GENERATIONAL CHANGE IN HOMEBUILDING
It was a residential ground-breaking ceremony with a difference.
And that is because St. Thomas is undergoing a generational change in how the city builds homes. And this comes on the heels of a generational change in the growth of St. Thomas, observed Mayor Joe Preston on Wednesday morning at the site of a new townhouse development in Shaw Valley.
It’s an innovative approach to affordable housing where homebuilders are being offered financial incentives to construct new townhouses with self-contained Additional Residential Units (ARU) in the basement.The Shaw Valley development is a partnership between MacPherson Builders and Collier Homes, and initially will involve the construction of six townhouse units with an ARU in each unit. A further 29 units are planned, each with an ARU.
Russell Higgins of MacPherson Homes explained what each ARU – measuring about 620 square feet – will look like.
They will include “a bedroom, kitchen, bathroom, laundry facilities, and separate HVAC system built to code with a fire-rated staircase into them and with a separate egress out the back through large windows, so lots of light.”
The financial incentive is a rebate of $12,500 back to developers from the City of St. Thomas for each unit built.
Higgins explained the self-contained unit will be available either for the homeowner to rent out to a third party, or it could be an in-law suite, or it could be a suite with an adult child living there.
It is expected that the basement units would rent for about $1,200 per month.What is not clear is who will monitor the amount of monthly rent charged for each unit.
Higgins added it is likely a transit service will serve the Shaw Valley development in the future, although nothing of that nature has been included in the city’s transportation plans moving forward.
Brandon Collier of Collier Homes added, “St. Thomas is a special place where we build. Where it’s really a same team mentality between the builders, the developers, the city officials and the inspectors.
“Everyone’s on the same team, and it’s the bonding of this community improvement program that’s really going to allow us to provide more support to our clients.
“St. Thomas is poised to boom, as we all know. And, we and MacPherson are just a small piece of that solution to provide much-needed housing in the years to come.”
Mayor Joe Preston noted, “It’s a really unique concept, and I sure hope that other municipalities are watching and our other developers are also watching.”
He continued, “Generational change in St. Thomas in the growth, now generational change in how we build homes.”
Higgins concluded, “With contemporary designs and expert craftsmanship, the project provides residents the opportunity to live close to parks, schools and future public transit, while supporting the city’s commitment to increasing housing diversity and affordability.”
KEEPING CRIMINALS BEHIND BARS
Last week, the provincial government introduced the Keeping Criminals Behind Bars Act, designed to support victims of crime and strengthen public safety.
Solicitor General Michael Kerzner has stressed, “For too long, violent repeat offenders have cycled through the justice system, putting families at risk and wreaking havoc in our communities.”
The legislation will require an accused person or their surety to provide a cash security deposit in the full amount ordered by the court.
Other proposed measures include enhanced digital tools to track repeat offenders and those not in compliance with bail conditions.
The province will also increase the capacity at adult correctional institutions.
Attorney General Doug Downey noted, “By tightening bail requirements with tougher rules and stronger enforcement, we are building on our work to keep communities safe.”
Last week we spoke with Elgin-St. Thomas-London South MP Andrew Lawton, who, along with Brantford-Brant MP Larry Brock, is a member of the Standing Committee on Justice and Human Rights and is leading the charge for reforms at the federal level.
“I see this as a recognition that all levels of government need to pull the levers they have available to them to fix this problem,” advised Lawton.
“This is something that provinces, in particular Ontario, have been crying out for action on from the federal government because the laws surrounding bail, the laws surrounding criminal justice, are federal laws. And of course, the administration of justice is something that is provincial.
“And we’re seeing the province now do its part, both on increasing jail capacity and also making sure that the people who are the most repeat or prolific offenders are kept behind bars instead of continuing to terrorize communities by being released onto the streets.
“There are going to be issues when different provinces have different capacity issues. Different provinces are going to have different concerns about how full their jails are. So we don’t want to patchwork on the law. That’s something that needs to be universal.
“But every province should be looking to deal with these issues as best as they can. And I think that Ontario has been very vocal, which has been important, and we’ve certainly heard from witnesses, including Chief Roskamp, before the Justice Committee, as well as different mayors from Ontario and other provinces and police associations. And they’ve all been saying the same thing, which is that we need to tighten up the bail laws.“But also, they have pointed to issues in the provinces. And I think that in Ontario’s case here, they’re doing their part, which is incredibly important. And I think this will be part of the necessary package of reforms we need to see at both the provincial and federal levels.”
“The point of cash bail, though, is that you actually have people who have some skin in the game. Because what’s happening now is that there are still monetary penalties attached to your bail. When you’re not complying, they’re never enforced.”
Will the need to post funds up front negatively impact lower-income individuals, as some civil liberties groups have suggested?
“Well, judges have discretion on how much they set bail at. And now, to be fair, we’ve seen this be part of the problem. There was a case in London not long ago where someone was given a one-cent bail. And while they were out on bail, they went and reoffended.
“So this is an issue that needs to be dealt with in general. The point of cash bail, though, is that you actually have people who have some skin in the game. Because what’s happening now is that there are still monetary penalties attached to your bail. When you’re not complying, they’re never enforced.
“So this way the enforcement part happens up front, and if you comply with your conditions, you get that money back.”
Lawton continued, “It’s important to note here that the people that we are looking to target with federal reforms and the people it looks like the province is targeting as well are the repeat offenders, the ones who repeatedly flout their bail conditions and are unconcerned with rehabilitation.
“Civil liberties concerns are incredibly important, but victims have rights too, and communities have rights. And one of the most fundamental rights that exists in our society is the right to live your life and have safety and security on the streets.”
“And these are the people that we need to be keeping behind bars when they don’t intend on complying with their bail conditions. And cash bail is a part of that. “One of the frustrations we had with the federal bail law is that it didn’t really deal with the issues in the surety system. It didn’t deal with the fact that you can have criminals vouching for other criminals, that you have these bail orders that are just unenforceable.
“So this is definitely a step towards rectifying some of these concerns. But I obviously hope that we can incorporate some of these surety and bail issues into the federal law as well to ensure we’re hitting this from all sides.
“The vast majority of the people that police are picking up and arresting are repeat offenders. Usually, 50 to 100 people are responsible for upward of 80 to 90 per cent of police calls. And, you know, we’re seeing that this small number of people is causing a large number of issues and a large amount of strain on the system.
“So this is, I think, a valuable tool that really works well with the efforts that we’re trying to advance at the federal level.
“Civil liberties concerns are incredibly important, but victims have rights too, and communities have rights. And one of the most fundamental rights that exists in our society is the right to live your life and have safety and security on the streets.
“And we’re trying to make sure that we don’t let legal theory trump the rights of victims of crime and the rights of people to hopefully not become victims of crime.”
We have requested an interview with St. Thomas Police Chief Marc Roskamp, who, last month, appeared via video conferencing before the Standing Committee on Justice and Human Rights at their meeting in the Wellington Building in Ottawa.
At that time, Roskamp observed, “In communities plagued by chronic criminality, safety seems to have become a privilege instead of a fundamental right.”
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