2018 Budget Deputation to City Council
Chamber President Charla Robinson and 2018 Chair of the Board Rosa Carlino presented this deputation to Council on Thursday, January 11 2018.
The Thunder Bay Chamber of Commerce represents over 850 businesses and over 20,000 employees in our community. Our membership includes businesses of all sizes and from all sectors of the local economy.
Nearly 90% of our members are small businesses with less than 25 employees. These organizations are the lifeblood of our city providing the services, supplies and supports that make Thunder Bay such an amazing place to live, work and play.
Business of all sizes, but in particular small businesses, are facing a challenging, and in some cases uncertain, future as employers look for ways to adjust to the dramatically increasing costs of running a business in Ontario. In 2017, the introduction of a cap and trade tax added to the delivery cost of every product and the heating costs of every business operation.
This year, implementation of new Employment Standards legislation are increasing costs for all businesses and will hit those in the food, hospitality and service industries the hardest with an over 22% hike in the minimum wage, to be followed next year by a further 7% for a combined 33% increase in less than 18 months.
Even though the majority of municipal employees are not at the minimum wage, the City has calculated a 1.2 million dollar increase in its costs because of this legislative change. With that in mind, take a moment to think of the costs implications for your favourite local grocer, restaurant, hair salon, and retailer and the additional sales required to make up the difference. It’s a staggering thought!
We submit this perspective because it is through this reality that small business owners and operators, and their employees are considering the 2018 municipal budget, user fee increases, and the proposed 2.9 percent tax levy increase.
The Corporation of the City of Thunder Bay is facing challenges too. On the income side, the loss of tax revenues through reassessments are cutting into city collections, while inflation and other cost increases mean every dollar buys a little bit less as the expense side creeps upward. This combination is making it harder to continue to provide the breadth of city services that citizens are accustomed to, at a level of taxation that the community can afford.
We appreciate the efforts that have been made by Council and Administration in recent years to implement cost controls. The $12.4 million dollars in savings that have been found to date continue to benefit all taxpayers year over year.
Our members are asking that these efforts be expanded by focusing on core municipal services over non-essential items, eliminating duplication, streamlining processes, and implementing new technologies to find efficiencies.
In reviewing the proposed budget package, we were concerned to see a serious disconnect between Council’s stated desire for future assessment growth and the proposal of fee increases of up to 50% on some of those development opportunities.
Furthermore, the proposed 9% increase in business license fees at a time when affected businesses such as food service establishments are already struggling to adjust to massive labour cost increases, suggests a lack of understanding of and sensitivity to the burdens that local entrepreneurs are facing at this time. It is important to highlight that these same businesses are high volume water users who will be facing a 3% increase in both water and sewer surcharges in addition to a 3% increase in landfill tipping fees for the private collection of their garbage.
Our request to you is three-fold:
- Reject the drastic increases proposed on official plan and zoning by-law amendment fees as we believe that such increases would send a negative message to potential investors and developers and could deter growth opportunities;
- Refuse to add to the burden of struggling small businesses by maintaining the business licence fees at the current rate; and,
- Reduce the tax levy increase to a maximum of 2% by finding further cost reductions.
These three steps would recognize the challenges of both business owners and the community at large to manage the increasing costs that we are all facing at this time.
We all love this community and we want to achieve our shared vision of a city that is connected, healthy, vibrant, and strong. We wish you well as you work through the budget with that vision in mind.
Thank you for your consideration of our suggestions.
2018 Tax-Supported Capital & Operating Budget Highlights
Overall, the 2018 municipal tax levy of $190.6 million represents an increase of $6.6 million over 2017. The levy is the total amount that needs to be raised from property tax payers to fund city services and contribute to capital infrastructure programs. A further breakdown of the tax levy increase is provided below. The 2018 increase after growth is $5.3 million or 2.90 percent. In 2017 the total municipal tax levy was $184.0 million, an increase of 3.13% over 2016 net of growth.
Total Proposed 2018 Municipal Tax Levy Increase: $6.6 million or 3.61%
Less: New taxation revenue sourced from 2017 net assessment growth: ($1.3 million) or (0.71%)
Net Increase to Municipal Tax Levy (After Growth): $5.3 million or 2.90%
- The growth in the City’s assessment base during 2017 resulting from investment in the community through new construction and expansions provides a tax generating power of $1.3 million. This means that $1.3 million of the municipal tax levy increase will not create any additional financial burden for existing taxpayers.
- The net growth in total property assessment (i.e. the “assessment base”) during 2017 was $74.0 million representing an increase in the City’s assessment base of 0.78%.
- A tax levy increase of 2.90% does not impact all taxpayers equally. Assessment changes are also a factor in determining the increase each taxpayer will experience.
Major Drivers in the 2018 Budget include:
- Reduced annual funding through the Ontario Municipal Partnership Fund of $1.8 million.
- Increased expenses of $1.1 million related to Bill 148, Fair Workplaces, Better Jobs Act, 2017
- Expansion to Superior North EMS Paramedic Services – $0.5 million
- Continued transitioning of Solid Waste Diversion costs to tax supported operations – $0.6 million
- Increased funding for community youth & cultural grants
- Expansions in roads patrolling, inspections and asphalt surface maintenance
- Response to Seven Youth Inquest including First Nation Secondary School Transit Pass Pilot Program for 2017-2018 school year
- Key drivers have been offset by operating reductions of $2.4 million, including savings of $0.7 million in Provincial uploads for social assistance benefit costs and increased grant funding for prisoner transportation and court security costs.
- The 2018 Net Capital budget of $16.4 million is consistent with 2017 (0.3% increase). A significant infrastructure funding gap remains at $23.9 million annually.
- The 2018 budget reflects investments in infrastructure through the $47.6 million gross tax-supported Capital Budget. Major capital projects include but are not limited to:
- Roads and roads related projects – $15.2 million
- Fleet and equipment replacement – $7.5 million
- Waverly Library renewal – $5.7 million (subject to funding from other levels of government)
- Renewal of other facilities – $3.7 million
- Storm water management – $3.0 million
- Parks – $3.0 million
2018 Budget Key Dates
- Budget Direction Presented to Council – July 31, 2017
- Pre-Budget Consultation Meeting – September 12, 2017
- Public Pre-Budget Deputation Meeting – September 26, 2017
- Proposed Budget Available to the Public – January 2, 2018
- Long Term Financial Overview Presentation – January 9, 2018
- Public Pre-Budget Deputation Meeting – January 11, 2018
- Council Detailed Budget Review – January 16, 18, 24, and 31, 2018
- Expected Budget Approval by Council – February 5, 2018