Chatham-Kent proposes 3.96% tax hike

Chatham-Kent Civic Centre, July 23, 2015. (Photo by Mike Vlasveld)

The Municipality of Chatham-Kent is looking at a 3.96 per cent tax increase for 2021.

The increase was proposed Wednesday night during the municipal draft budget presentation. For an average household assessed at $173,700 in Chatham-Kent, an increase of 3.96 per cent would equal an extra cost of $117 a year. Per $100,000 household assessment, it would equal an extra $67 annually.

A large portion of the proposed increase, 2.10 per cent, is allocated towards investing in Chatham-Kent’s infrastructure. This includes replacing ageing infrastructure, improving storm sewers and addressing shoreline issues.

“I think that there’s an expectation from the community that we keep working towards some of those goals,” said Budget Chair Brock McGregor.  

One of the newer areas proposed in the draft budget looks to address challenges that have been previously identified surrounding homelessness and affordable housing in the municipality. Investments towards affordable housing and emergency initiatives are included in the 0.43 per cent of the budget that has been allocated towards “investing in our community.” Other priorities include money towards improving transit, doctor recruitment and better rural internet.

“Overall, we felt the necessity to bring to council the funding that they needed to do some of the strategic directions that they were asking for, particularly with our vulnerable populations,” said Chief Financial Officer Gord Quinton. “We didn’t see this as the year to decrease those investments.”

When it comes to COVID-19, the municipality expected an operating budget deficit of $5 million in 2020 as a result of the pandemic. However, according to  Chief Administrative Officer Don Shropshire, Chatham-Kent actually closed off 2020 with a $1 million surplus, which was transferred over to the 2021 budget. This surplus was due to council previously approving recommendations to help mitigate COVID-19 costs and expenses as well as funding from the provincial government.

However, Shropshire said there are still a lot of unknowns surrounding the financial impacts of COVID-19 going into the 2021 budget. Although more funding is anticipated from upper levels of government, Shropshire said that the municipality is preparing for the same impact level and reduction in revenue that was seen in 2020.

“We believe that the municipality is in good financial shape,” he said. “We’ve got a fair bit of resiliency in the budget but there is an expectation that we’re not sure about a lot of the impacts of COVID-19 in 2021. We’re expecting that with the rollout of the vaccination programming taking several months that we are going to have a continued negative impact on our economy and that we are going to have to continue to mitigate some of the costs and trying to find ways to treat the lost revenue.”

COVID-19’s impact makes up 0.43 per cent of the proposed tax increase in the draft budget for loss of interest revenues due to a decline in interest rates and market conditions.

Quinton said the impact is relatively small compared to the costs of the pandemic.

“Chatham-Kent actually faced over $17 million in COVID-19 costs in 2020,” said Quinton. “This dispense is the portion that we doubt that we’ll recover any funding from upper-level governments. So we see this as an impact to local taxpayers.”

Similar to 2020, the municipality once again has to address “downloads” from the provincial government in 2021. Provincial downloads occur when the Ontario government shifts sources of funding from the provincial income and sales tax onto municipal taxpayers. This includes reduced funding for public health and childcare as well as further cuts to the Ontario Municipal Partnership Fund.

A more detailed breakdown of the proposed 2021 tax increase can be seen below.

Chatham-Kent 2021 Budget Breakdown (Photo via the Municipality of Chatham-Kent)

Chatham-Kent 2021 Budget Breakdown (Photo via the Municipality of Chatham-Kent)

The draft budget presentation also included a look at what Chatham-Kent residents might be expecting to pay over the next few years. According to the projected budget forecast, a roughly four per cent increase could be possible for each year, over the next five years unless the municipality gets some more support from upper levels of government.

“[In] municipalities across Canada the cost of infrastructure, very little of that cost is being shared with upper levels of government,” said Quinton. “It comes across onto the property taxpayers. When you add needing close to two per cent every year just to cover the infrastructure and just general inflation, it doesn’t leave much left.”

Because of COVID-19, the budget process is being done completely virtually this year.

Following the opening night of budget, there will be several chances for resident engagement. Three community consultation meetings will be held through the Municipality of Chatham-Kent’s Facebook Live feed on the following dates:

-Tuesday, January 19 from 12 to 1 p.m.

-Wednesday, January 20 from 4 to 5 p.m.

-Thursday, January 21 from 6 to 7 p.m.

All consultations will include a brief presentation from municipal staff that summarizes the proposed budget and provides a chance for residents to ask questions about the budget.

The actual budget deliberation meetings will be held on January 27, 28 and February 2 from 6 p.m. to 10 p.m. If more time is required, February 3 and 4 have also been set aside if needed.

Written deputations of up to five minutes in length are welcome each evening. Submissions must be made by 3 p.m. each evening by email, telephone or mail.

A more detailed look at the 2021 proposed budget can be found on the municipality’s website by clicking here.

In 2020, administration initially proposed a 4.99 per cent tax increase, which was eventually brought down to 2.97 per cent over three nights of budget deliberations.