Back to SearchAs we approach budget discussions for 2025, it is important for the community to have insight regarding recent revenue trends, taxation rates, inflation, operating costs, and the challenges we anticipate in the coming year. As Council prepares to review the initial draft of the 2025 Budget overview on October 29, 2024, it is important for the public to understand the financial challenges and decisions that will need to be made.
Did you know?
The City of Kenora manages and maintains 21 bridges, valued at $228,830,400.
This includes 17 vehicular bridges, three pedestrian bridges, and one arch culvert, which are valued at a total of $228,830,400 (as of 2022).
The City has 66.5 km of sidewalk.
If you walked the total of all Kenora’s sidewalks, this would equivalent to walking over 15 hours or walking from Husky the Muskie to Longbow Lake Road and back twice, using The Trans Canada Highway.
The water treatment plant and wastewater treatment plant are 100% paid by utility user fees, as well as all underground and marine water and sewer lines.
Kenora has 323 km roads consisting of: paved streets, surface treated roads, gravel roads, and laneways.
The City manages and maintains 323 km of roads consisting of: paved streets (136 km per lane x 2 lanes), surface treated roads (58 km per lane x 2 lanes), gravel roads (116 kms per lane x 2 lanes), and 13km of public laneways (one-lane allies).
Kenora has 138 km of water mains (8.5km of which are underwater), 5.5 kms of sanitary mains (5.5 km underwater), and 41 km of storm mains, not including culverts.
From 2018 to 2024, inflation rose by a total 25.7%, while residential taxes increased by only a total of 11.4% over the same 7-year period (an average of 1.63% a year).
This 14.3% gap reflects the City Administration and Council's commitment to being mindful of the financial challenges many residents faced during and after the COVID-19 pandemic.
Despite the challenges posed by inflation, City Administration and Council have continued to make meaningful progress in improving our community.
From 2020 to 2024, the City has invested a remarkable $90,836,293 in various capital, including roads and bridges, recreation and culture, fire services, cemetery enhancements, planning and development, and water and wastewater management.
Residents have been taxed less than inflation
For the last seven years, Kenora’s residential tax rate lagged behind the rising cost of inflation. From 2018 to 2024, inflation rose by a total of 25.7%, while residential taxes increased by only a total of 11.4% over the 7-year period (an average of 1.63% a year). This 14.3% gap reflects the City Administration and Council's commitment to being mindful of the financial challenges many residents faced during and after the COVID-19 pandemic.
The City did not raise residential taxes in 2018 or 2019, and during the pandemic, we reduced residential taxes by 2.2% in 2020 to alleviate financial pressure on our community. From 2021 to 2024, the residential tax rate did increase, however, the amounts did not keep pace with inflation. For instance, in 2022, while inflation surged by 7.7%, residential taxes only rose by 2.2%.
The Consumer Price Index (CPI) hit a high of 8.1% in June of 2022. The CPI represents changes in prices as experienced by consumers. It measures price change by comparing, through time, the cost of a fixed “basket of goods” and services related to food, shelter, household operations, clothing and footwear, transportation, recreation and more. A great example of the CPI and “Basket of goods” can be found on Statistics Canada.
Like our Kenora residents who have witnessed rising costs at grocery stores, gas stations, and household furnishing and equipment, the City too faces increased costs associated with providing essential services and maintaining infrastructure for our community.
From 2017 to 2024, while inflation has risen, the funding Kenora receives from federal and provincial governments has largely remained the same or even decreased. For instance, the Federal Gas Tax funding dropped in 2019, and the Ontario Municipal Partnership Fund saw cuts in 2019 and again from 2021 to 2023. The only significant boost in funding came from the Ontario Community Infrastructure Fund (OCIF).
Additionally, funding for the Ontario Community Museum Operating Grant has not changed since 2008, and the Public Library Operating Grant has stayed at $35,583 for the past 20 years, without any inflation adjustments. This means the City has had to operate under tight financial constraints despite the rising costs of inflation, and despite any other reflective increases of funding support.
City’s commitment during difficult times
Understanding the struggles faced by residents during the pandemic, City Administration dedicated substantial effort to seeking out methods of cost reduction and sourcing alternative funding to bridge the gap between the residential tax rate and inflation.
Through the strong ongoing advocacy work of our Council and City Administration, we successfully secured $4.78 million over three years through various funding sources, which that reduced the impact on taxpayers. Examples of these funding sources are:
- Ontario Provincial Police Rebate (2023 and 2024),
- Additional Ontario Community Infrastructure Funding (2022, 2023, and 2024), based on leveraging the City’s enhanced asset management data
- Withdrawal from Tax-Write Off Reserve (2023),
- Execution of Recycling Contract bringing in additional revenue (2024),
- Debt refinancing (2022, 2023, and 2024), and
- COVID-19 funding (2021 and 2022).
These funding decisions required significant administrative effort, and their availability is not guaranteed year after year. However, our priority was to help keep more money in residents' pockets at a time when it was most needed.
Despite the challenges posed by inflation, City Administration and Council have continued to make meaningful progress in improving our community. From 2020 to 2024, the City has invested a remarkable $90,836,293 in various capital, including roads and bridges, recreation and culture, fire services, cemetery enhancements, planning and development, and water and wastewater management. Notably, in 2024, the City allocated 23% more funding toward improving roads and bridges compared to 2023, demonstrating our ongoing commitment to enhancing infrastructure for the benefit of all residents.
City contributions to essential external organizations
The City also faces uncontrollable costs, including federal and provincial mandated expenses, where the City has little to no influence over them. This includes provincially mandated financial commitments to external agencies providing services in our community, such as the Northwestern Health Unit (NWHU), District of Kenora Home for the Aged, Kenora District Services Board (KDSB), and the Ontario Provincial Police (OPP).
For example, our budgeted policing net costs to the OPP rose from $5.36 million in 2023 to $6.24 million in 2024, to $8.79 million in 2025 and a forecasted amount of $9.05 million in 2026.
Other uncontrollable costs include insurance, fuel costs, utility rates, material and supply costs, health and safety regulations, contractual agreements, and collective bargaining. In contrast, controllable costs—such as service levels and capital expenditures—are areas where the City can exert influence.
As uncontrollable costs continue to climb, the City faces a significant challenge due to revenue sources not following suit with inflation. As well, some funding sources that have remained flat and, in some cases, have even decreased.
Property assessments postponed
Municipal Property Assessment Corporation (MPAC) is a provincial corporation responsible for delivering property values, insights and services to taxpayers, municipalities, governments, and businesses.
Due to the COVID-19 pandemic, the Ontario government postponed the 2020 Assessment Update. On August 16, 2023, the Ontario government filed a regulation to amend the Assessment Act, extending the postponement of a province-wide reassessment through the end of the 2021 to 2024 assessment cycle.
Therefore, property assessments continue to be based on fully phased-in January 1, 2016 current values. This 2016 value continues to be used as the basis for calculating 2023 and 2024 property taxes.
Understanding user rates vs. tax levies
It's important to distinguish between user rates and tax levies in how municipalities collect revenue.
Tax levies are the property taxes used to operate the community, funding capital expenditures such as road networks, bridges, buildings, and equipment. Tax levies are collected on all properties and are used to generally fund all operations and capital needs except self-funded utilities.
User rates, on the other hand, refer to self-funded services, including water, wastewater, and solid waste management, which are separate from property taxes. In these rates, if you do not use the services, you do not pay any levies towards these services.
Revenue sources
The City has three main revenue sources to support its operating budget:
- Property Taxes
- Provincial and Federal funding
- User Fees such as recreation fees (example: as ice time), planning and building fees, usage fees (example: room rentals)
In addition, other revenue sources include:
- Interest income from investments
- Allocations of funds from reserve funds
- miscellaneous revenues
Staying in the know
There will be a Special Council Meeting on Tuesday, October 29, 2024, at 3:00 p.m. CT in Council Chambers for Council to receive and deliberate on the first draft of the 2025 Budget overview.
As part of the budget discussions, Council is still considering options for water and wastewater rates, Solid Waste utility, capital projects as well as residential taxes. This ongoing dialogue reflects the Council's commitment to making informed decisions that prioritize the community's needs while ensuring fiscal responsibility. We appreciate your patience as these important decisions are carefully considered.
Residents may observe the proceedings in person or view the live stream on our Agenda and Minutes page.
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