Before a gathering of local business leaders early Thursday morning (November 27), Peterborough Mayor Jeff Leal painted a grim picture of the “very challenging financial situation” the city faces.
Speaking at the annual Mayor’s Breakfast at the Peterborough Golf and Country Club, Mayor Leal spoke at length to the proposed 2026 city budget and its related 6.56 per cent all-inclusive tax rate increase.
The event, hosted by Peterborough and Kawarthas Chamber of Commerce, also saw remarks from Peterborough police chief Stuart Betts about the request for an additional $3.7 million for the 2026 police budget, a 9.8 per cent increase over this year.
The mayor noted that the proposed 2026 tax hike, which will go before council for final approval on December 8th, comes at the expense of no new hires or increases in city-provided services.
“This is a status quo budget,” said Mayor Leal, noting 1.76 per cent of the total increase is for externally provided services such as policing, paramedics, and public health whose “service levels and mandates are set by the province with municipalities left paying the bill.”
Spending for capital projects, added Mayor Leal, accounts for 2.16 per cent of the total tax increase.
“The city’s asset management plan recommends we spend close to $250 million a year for the next decade to catch up on our infrastructure backlog so that our assets are in a state of good repair. We are investing about $100 million each and every year.”
“Part of the problem is, for many years, previous councils deferred or delayed key investments. I appreciate and respect their desire to put off that necessary spending for the long-term benefit of the community in return for immediate relief on property taxes but, eventually, someone has to face the consequences of those decisions.”
That “someone” is the current city council, which unanimously decided at its November 18 meeting to reduce the 2026 tax levy requirement by 1.32 per cent by drawing $3 million from the city’s legacy income retention reserve account, which generates investment income using the proceeds of the sale of assets of Peterborough Distribution Inc. to Hydro One.
“This decision to use the interest revenue is a stop-gap measure,” Mayor Leal said during the council meeting. “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.”
At Thursday morning’s meeting, the mayor said the city will begin the process early next year of securing “a bigger picture solution to the problem” of its budget by “commissioning a comprehensive service effectiveness and efficiency review.”
“We will be asking a third-party organization to look across our entire organization to find out where we can deliver services more efficiently, including through alternative service delivery models. This is the first time a comprehensive review will be undertaken in our city’s history.”
The result, warned Mayor Leal, “won’t be for the faint of heart. There will be some extremely difficult choices to make.”
“For example, to get (down) to a three per cent all-inclusive tax increase, we would need to find more than $8 million in cuts or alternative revenue sources. To put this into sharp focus, we could shutter both library branches, and cease snowplowing and winter control operations, and we’d still need to find more funds (to get to three per cent).”
Mayor Leal said the RFP (request for proposal) for the service delivery review will be issued in January, with that review’s findings made public prior to the October 2026 municipal election.
After his remarks, Mayor Leal told kawarthaNOW that “some serious structural problems” beg solutions for there to be any chance of lower annual tax hikes in the years ahead.
“We’re setting aside a certain amount of money in our 2026 budget which will allow the municipality to bring in a consulting team that will look under the hood at every bolt and nut in the City of Peterborough,” said Mayor Leal. “It’s wise, from time to time, to bring in outsiders to take a fresh look at all our operations.”
Asked if he thinks there actually is $8 million in savings and increased revenue streams to be found, Mayor Leal said “It is there, but only if there’s the political courage (by incoming city councillors) to look at the recommendations and implement them.”
During his remarks, Mayor Leal also touched on a familiar theme — one he brought up one year ago at this same breakfast event.
“Residential taxpayers in our city pay 80 per cent of our tax base while commercial-industrial represents 20 per cent. In a lot of communities in Ontario, a much healthier split is 60-40 (per cent). Although there are many companies looking to move to Peterborough, and many already here hoping to expand, we simply don’t have the employment lands to accommodate most requests.”
“Unlocking employment lands would, along with creating jobs for residents, go a long way to bringing in property tax revenue and improving our tax ratio, taking some of the burden off our residential tax base.”
After telling his audience to brace for the tough decisions that will precede the achieving of lower overall tax rate increases down the road, Mayor Leal pushed the need for a new “spectator centre” to replace the aging Memorial Centre.
“As it continues to age, we will be forced to keep putting millions of dollars into its upkeep (with) forever diminishing returns and, all the while, the cost of a new facility will continue to climb,” he said.
“We’ve invited the private sector to demonstrate its interest in this project, and share their ideas for investment and revitalization on the broader district around the proposed site (the current Peterborough Transit bus garage at Aylmer and Townsend streets). The request is open now and will close on January 13th.”
Mayor Leal added a report from staff will follow in the spring “which will provide the opportunity to commit to the project.”
“Some 50 years ago, we had the development of Peterborough Square, which was the major investment in our downtown at the time. I believe it’s time for the next major downtown revitalization and property tax assessment uplift program. We’re looking for a partner in the private sector and will be asking the upper levels of government for support.”
A new facility, added Mayor Leal, will require “a significant investment” on the city’s part.
Asked afterwards how he can justify that expenditure in the face of possible forthcoming cuts to city services needed to lower the tax hit, Mayor Leal pointed to the experience of St. Catharines.
“When they opened the new Meridian Centre in 2014, there was a general uplift of assessment in that area where the Meridian Centre was constructed,” he said.
“Fifty years after Peterborough Square (was built and opened), we need a big project to revitalize downtown Peterborough. In 1956, the City of Peterborough invested in the Memorial Centre. It lasted 70 years. This is a generational long-term project.”
During his remarks, police chief Stuart Betts touched on various aspects of, and challenges associated with, policing as a necessary service which, in 2026, will cost $41.5 million — a 9.8 per cent increase over this year.
Like Mayor Leal, he noted there’s little to no wiggle room in terms of finding savings due to the cost of provincially mandated programs and services.
“When we come to city council, it isn’t that we’ve just spent the last couple of weeks working on this (the police budget),” said Chief Betts.
“We’ve spent most of the year looking at what are we doing, what can we do better. What can we do less costly? How can we bundle services much like you would do in your homes or businesses? What can we do to reduce the cost over and above negotiated wages and salaries and service increases?”
Of note, Chief Betts drew the loudest reaction from those gathered during the post-remarks question-and-answer session moderated by chamber board vice chair Ben vanVeen of Century 21 United Realty Inc.
“I have zero tolerance for people who choose to do drugs in our public places,” Chief Betts said when asked what approaches police are taking when it comes curbing public drug use.
“I’m not unaware of the fact that when you have an addiction, what your behaviors are often are going to be subject to that chaotic substance abuse cycle. I get that. That doesn’t mean it’s an excuse for poor behavior.”
“Since June 6th, we have arrested 156 people out of 500 calls for service and laid charges in 110 occurrences, in which we’ve dealt with people who are using drugs in our public spaces. There will always be more work than we can possibly keep up with but the message needs to go out, it won’t be tolerated.”
Among those in room to hear Mayor Leal’s and Chief Betts’ remarks were Peterborough city councillor Joy Lachica and Douro-Dummer mayor Heather Watson.
The breakfast was sponsored by Enbridge, the City of Peterborough, MNP, Black Rock Entertainment, Pinchin Limited, and Shorelines Casino.
