On Oct. 7, Hamilton Mayor Andrea Horwath issued her 2026 Budget Directive to city staff and, for the first time, set a cap on the tax increase.
Horwath directed that staff prepare a budget with a maximum property tax increase target of 4.25 per cent.
Horwath is also calling the 2026 budget a “Hold the Line budget.”
As 2026 is an election year, Horwath will be looking to rein in spending after tax increases of 5.85 in 2023, 5.79 per cent in 2024, and 5.6 per cent in 2025 over her term (three-year average of 5.75 per cent).
Tax increases under Hamilton’s previous mayor, Fred Eisenberger, were 2.5 per cent in 2019, 2.9 per cent in 2020, 1.9 per cent in 2021, and 2.8 per cent in 2022 (four-year average of 2.5 per cent).
A report from city staff about a month ago projected that the property tax increase for 2026 would be 8.9 per cent.
The report added that employee-related costs make up almost 42 per cent of the tax increase.
A press release from Horwath’s office says that she has “heard from residents about the financial strain they are experiencing and their expectations that City Hall respond with discipline and a focus on affordability.”
“Hamiltonians are feeling the strain of rising costs, economic uncertainty, and affordability challenges,” said Horwath.
“The 2026 Budget must respond to those realities by focusing on the essentials – keeping taxes as low as possible while maintaining the services, infrastructure, and community supports that people rely on every day,” she continued.
Horwath’s directive says that the city should prioritize investments in infrastructure renewal, community safety and well-being, and “essential public services.”
It also calls on staff to identify cost-saving measures and operational efficiencies, as well as explore new revenue sources.
It is unclear what those revenue sources could be, but Council previously explored research into the possibility of new parking levies, a municipal land transfer tax and municipal alcohol and tobacco sales taxes.
Staff’s previous report noted that there are “potential levers” that the city can consider to reduce the tax rate from the 8.9 per cent projection.
They said 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.”
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.
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.
