Property tax rate would need to rise over 32% for council to achieve its new strategic plan by 2027

Good intentions will soon clash with the financial realities at city hall.

A staff report estimates that if city council wishes to fully implement the strategies in its soon-to-be finalized 2023-2027 Strategic Plan during the upcoming four-year budget period, the property tax rate would have to rise over 8 per cent annually.

“A 32 per cent tax hike [by 2027], I don’t think any member of this council thinks that’s reasonable to ask of Londoners, so we will have to start to prioritize,” Deputy Mayor Shawn Lewis told CTV News.

On Monday, council members of the Strategic Priorities and Policies Committee put the finishing touches on its 2023-2027 Strategic Plan which forms the foundation for the upcoming multi-year municipal budget.

The Strategic Plan includes eight areas of focus:

• Reconciliation, Equity, Accessibility and Inclusion
• Housing and Homelessness
• Wellbeing and Safety
• Safe London for Women, Girls, Gender-Diverse and Trans People
• Economic Growth, Culture and Prosperity
• Mobility and Transportation
• Climate Action and Sustainable Growth
• Well-run City

Lewis says staggering the implementation during 2024-2027 Budget deliberations next winter would reduce the impact on property taxes.

“We may spread the pacing out so that some things don’t even start until year four, others will carry into the next term of council. Other things might not get funded at all,” he explained.

The same report warns that inflation, labour negotiations and the provinces’ More Homes Built Faster Act [Bill 23] will all put additional pressure on local tax bills.

Just maintaining existing service levels will require an average annual tax rate increase between 2.9 per cent and 3.9 per cent.

Lewis warns that funding for some existing services may need to be re-examined, or new investments delayed.

“What’s the appetite for new investments? That’s going to be the real question moving forward,” Lewis explained. “I think it’s very hard, in these times, to ask Londoners to be accepting [a tax rate increase] that starts with the number four.”

Every one per cent increase to the average annual tax rate will generate about $75-million more tax dollars over the four year term of the budget to invest in council priorities.

Council is anticipated to approve its strategic plan on April 25.

On Tuesday, a council committee will consider setting the tax increase range for the multi-year budget.

The Draft 2024-2027 budget will be tabled on Dec. 12.