A newly released report from City of Hamilton staff says that the projected average property tax increase for residents will be 8.9 per cent in 2026.
For whatever reason, the report does not include the projected dollar amount that taxes are projected to increase, just the percentage.
The news comes after Hamilton taxpayers were already hit with a 5.6 per cent ($285) increase in 2025.
The staff report says that the 2026 increase “covers the cost of maintaining services, keeping up with inflation and investing in Council priorities like housing, safety, and infrastructure, as well as estimates for costs associated with Boards and Agencies.”
The report also says that there are “potential levers” that the city can consider to reduce the tax rate.
Staff write that Council could “pause increases to infrastructure funding, defer new initiatives and Council referred items” which would result in a residential tax increase of closer to 6.6 per cent.
They add that other “levers available” include revisions to reserve strategies debt financing, capital financing plans, and gapping targets,” but that each lever comes with “risks and trade-offs.”
At the beginning of the 2025 budget process, staff originally projected a tax increase of 6.9 per cent, but that was eventually whittled down to 5.6 per cent.
In addition to the initial 8.9 per cent projection for 2026, staff also project a 6.7 per cent residential tax increase in 2027 and a 4.8 per cent increase in 2028.
According to budget documents, city spending is projected to increase by 10.6 per cent, or $131.7 million, in 2026.
Property tax would have to cover $106.7 million of that spending increase.
The report adds that the driving factors behind the tax increase are an extra $44.6 million in “employee-related costs,” $11.7 million in “Boards and Agencies increases,” $10.5 million in “Operating Impacts of Capital,” $10.0 million for servicing requirements of new debt, $9.5 million to address the annual infrastructure funding gap for transportation assets, $7.5 million to address the general infrastructure funding gap, $3.9 million for “Year 10 of the 10-Year Transit Strategy,” and $3.7 million in maintenance pressures in the Housing Division.
That means that employee-related costs make up almost 42 per cent of the tax increase.
Hamilton City Council has added hundreds of new employees over the past few years.
Staff say that all City of Hamilton union groups that have an active contract are scheduled to receive cost of living increases in 2026.
There are also “merit increases and job evaluation commitments,” reads a staff report.
Employee benefits such as health and dental, long-term disability, and life insurance, are also anticipated to increase 10 per cent over 2025.
City staff have also brought forward another report to Council on what it would take to reduce the property tax increase to be in line with inflation.
As inflation is calculated at 2.5 per cent, staff say that achieving a 2.5 per cent residential tax increase would require $83.2 million in reductions.
They say that further options to reduce the tax impact to that level include staffing reductions, pausing area rating contributions, service and program reviews, user fee increases, and a greater reliance on reserve and debt financing.
However, the report also warns that impacts of those reductions could include service interruptions, the widening of the city’s $5.2 billion infrastructure funding gap, and reduced long-term fiscal sustainability.
Based in Hamilton, he reaches hundreds of thousands of people monthly on Facebook, Instagram, TikTok, and Twitter. He has been published in The Hamilton Spectator, Stoney Creek News, and Bay Observer. He has also been a segment host with Cable 14 Hamilton. In 2017, he received the Chancellor Full Tuition Scholarship from the University of Ottawa (BA, 2022). He has also received the Governor General’s Academic Medal. He formerly worked in a non-partisan role on Parliament Hill in Ottawa.
