After two days of deliberations on the City of Peterborough’s draft 2026 budget, city council has recommended changes that would reduce the all-inclusive rate increase in 2026 to 6.56 per cent, including by deferring several projects and by transferring $3 million of interest income from a special reserve fund.
The all-inclusive rate consists of municipal property tax, education tax, and municipal sanitary sewer surcharge rates. A 6.56 per cent increase would add around $340 in 2026 for a median residential property assessed at $260,000.
Prior to councillors meeting as general committee on Monday and Tuesday (November 17 and 18) to review the budget, the proposed all-inclusive rate increase stood at 7.92 per cent.
The original version of the draft budget presented to councillors on November 3 had a 7.84 per cent increase, but the city’s commissioner of finance and corporate services Richard Freymond noted a reduction of $665,000 in employee benefits costs and an additional $269,000 for the city’s Ontario Municipal Partnership Fund grant reduced the increase to 7.43 per cent.
The all-inclusive rate increased to 7.29 per cent as a result of council’s November 3 decision to award a $1.12 million contract to One City Peterborough to provide low-barrier shelter services in 2026.
During the deliberations on Monday and Tuesday, council made several recommendations to decrease the all-inclusive rate, including by deferring consideration of a $900,000 project for a public washroom at Jackson Park until 2027, deferring consideration of a $375,000 budget for the Coldsprings Growth Area Planning Studies until 2027, and deferring a $25,000 request to convert a washroom space at City Hall into a kitchenette.
The net tax levy requirement has also been reduced by $204,477 to reflect the increased final current value assessments from the Municipal Property Assessment Corporation.
However, the largest decrease to the tax levy requirement by far comes from council’s unanimously supported recommendation to use $3 million from the city’s legacy income retention reserve account in 2026 — resulting in a decrease to the tax levy of 1.32 per cent.
Money in the legacy income retention reserve account comes from interest earned on investments using the proceeds of the sale of assets of Peterborough Distribution Inc. to Hydro One. Council approved the establishment of the fund in 2022 with interest income to be used to fund a portion of the city’s capital program.
While commissioner Freymond said using the reserve for operating costs will not impact the capital program in 2026, Mayor Jeff Leal pointed out that doing so only defers the problems with the city’s budget until 2027.
“In 2027, that’s when the real decisions will have to made,” Mayor Leal said. “There’s fundamental problems, structurally, with the budget of the City of Peterborough. It’s in two areas: it’s on the assessment side — revenue base — and on the operations side. Hopefully, when the report comes back on (city) efficiencies, et cetera, and looking at alternative service delivery models for the City of Peterborough, that’s when the tough decisions will have to be made.”
“This decision to use the interest revenue is a stop-gap measure. It certainly gets us through 2026, I appreciate that, but the tough sledding is down the road in 2027 and beyond, when we really need to put the budget under the microscope and once and for all repair the structural problems we have.”
With the next municipal election scheduled for October 26, 2026, a new council will be dealing with the 2027 budget.
Council also directed that the proposed 2026 police service budget of $41,506,841 — representing an increase of 9.8 per cent ($3,704,600) over 2025 — be returned to the police service board for any potential reductions.
Increases in the next tax levy recommended by council include an additional $90,137 in 2026 for the Community Development Program to offset a reduced funding from Peterborough County, an increase of $25,000 for the 2026 individual artists grant program administered by the Electric City Culture Council (EC3), and an increase of $32,000 for the Peterborough Public Library’s collections acquisition fund.
After council’s budget deliberations, the draft 2026 budget reflects a 2.11 per cent increase in the city’s operating budget, a 2.16 per cent increase for infrastructure and capital needs, a 0.53 per cent increase in the sanitary sewer fee, and a 1.76 per cent increase for external agencies that are funded by the city.
The budget includes $434.2 million in spending on municipal services, funded by $198.4 million in municipal property taxes and $235.8 million in revenues including user fees, grants from other governments, recoveries, interest from investments, and service charges
It also includes $139.2 million for capital projects, including the renovation and expansion of two police stations, Lansdowne Street West improvements between Spillsbury Drive and Clonsilla Avenue, wastewater treatment plant revitalization, extending a taxiway at the Peterborough Regional Airport, road paving, purchasing transit buses, and water service distribution infrastructure.
Beyond the 2026 draft budget, council also made several recommendations for future consideration, including giving Ashburnham Memorial Park priority for the next round of city park improvements, that a pedestrian crossing for the Crawford Trail Extension Project from Monaghan Road to Townsend be at the signalized intersection of Monaghan Road and Lansdowne Street, and that staff be directed to bring forward a report to the 2027 budget to explore parking and other revenue opportunities at Riverview Park and Zoo.
The city’s 2026 draft budget is scheduled to be presented to city council for adoption on Monday, December 8, when public delegations will be heard.
