Peterborough city council has endorsed Mayor Jeff Leal’s 2026 draft budget for the city, with the same changes councillors discussed and recommended during two days of budget deliberations on November 17 and 18 that resulted in an increase of 6.56 per cent to the all-inclusive rate.
However, council’s endorsement of the mayor’s budget during a meeting on Monday night (December 8) was not unanimous, with councillors Joy Lachica, Alex Bierk, and Keith Riel voting against it, largely because of their objections to a 9.22 per cent increase in the police service’s operating budget to $41.5 million, as well as the $91.9 million renovation and expansion of two police stations.
The all-inclusive rate consists of municipal property tax, education tax, and municipal sanitary sewer surcharge rates. The 6.56 per cent increase will result in an additional $130.66 in taxes over 2025 for each $100,000 of residential property assessment. For a property assessed at $260,000, the increase would result in an annual tax bill of $5,514.79, which is an increase of $339.75 over 2025.
During the budget deliberation process, the originally proposed increase to the tax levy requirement for the city’s 2026 operating budget of over $201 million (an increase of 7.84 per cent) was decreased to over $198.4 million (an increase of 6.56 per cent) through a combination of spending reductions and increased revenue offset by some increased spending.
Changes included a decrease of $667,071 in employee benefits, an additional $268,900 for the city’s Ontario Municipal Partnership Fund, a reduction of $90,137 in Peterborough County’s contribution to the city’s Community Development Program, and an increase of $25,000 to the individual artists grants program administered by the Electric City Culture Council.
The greatest single operating spending increase in 2026 was $1.12 million for One City Peterborough to operate a low-barrier shelter and related programs for people experiencing homelessness, and the greatest single revenue increase was the transfer of $3 million from the city’s legacy income fund, representing interest income earned on investments using the proceeds of the sale of assets of Peterborough Distribution Inc. to Hydro One.
The city’s capital budget was reduced by $1.27 million from $140.5 million to $139.3 million 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 total reduction was offset by an additional $32,000 for the Peterborough Public Library’s collections acquisition fund.
The 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.
During debate on the draft budget on Monday night, councillor Keith Riel said the police budget was “driving the entire tax increase.”
“When one line item dictates nearly the entire levy increase, it’s reasonable for council to step back and say ‘Is this sustainable?” Riel said, adding that the mayor has been the “prime architect and defender” of the police budget increase.
“Every department is expected to find efficiencies except the police. A budget that pushes core services aside to fund one department is not a balanced municipal plan.”
Councillor Alex Bierk also said he could not support the budget due to the increase to the police budget, noting that all city departments “are coming in with very lean increases” by contrast.
“We are facing a high budget increase ask from the police, as well as a huge capital ask from the police that has gone up by a lot of money from what we originally thought it was,” Bierk said. “One of the biggest drivers on this budget increase is the amount of money, cash money, from our taxpayers that we are having to put into a financing policy fund to be able to afford to do the build (of the new police station) at the Calvary site.”
“My fear is that this council’s legacy is that we’re going to be labouring the next councils to come with an extreme amount of debt for these things. We’re dipping into reserves, we’re going into debt for our capital projects, which to me will lead to the next one, two, three terms of council being absolutely handcuffed by the amount of debt we are putting on them to be able to do anything.”
Noting that the city’s own operating budget increase is only 2.1 per cent, with no new hires, councillor Andrew Beamer said the city could “rein in spending” by reducing funding for external agencies such as Lakelands Public Health, paramedics, and the police.
“These budgets are not sustainable,” he said. “Perhaps they’ve been underfunded for several years, and we have increased the funding over the past two or three years, but they’re not sustainable. And the police budget is not sustainable — it’s increased 50 per cent over three years, and can’t keep going (up). We need to rein in external agencies.”
Beamer said the homelessness budget has increased by almost 70 per cent during this term, with One City Peterborough’s $2 million annual budget as a “driver” of higher tax increases, and he also said the city should be cutting $5 million in discretionary funding in the future.
While councillor Lachica said she supports investments in the police, she noted that the police were not asked “to trim the edges” of the new police facility and that she couldn’t support the police operating budget increase.
“What we’re hearing from constituents everywhere is that this is unrealistic and unsupportable, and it’s off the charts in terms of spending on this line item,” she said.
Councillor Kevin Duguay expressed support for the “very detailed” police budget, and noted that the new police facility has the potential for future city use as well as for future development, which “is not yet factored in the budget” as a future revenue opportunity. He also expressed support for the entire city budget.
Councillor Dave Haacke suggested that a future council should look at eliminating the city’s climate action expenditures, saying it should be a federal and provincial responsibility. He also mentioned eliminating future funding for DEI (diversity, equity, and inclusion), and suggested the city should adopt mandatory treatment programs.
He said he “totally” supports the police budget, adding council could instead reduce spending on improving the environmental efficiency of municipal buildings. He also expressed support for the entire budget.
Mayor Jeff Leal defended the police budget, pointing out that one of the councillors who criticized the police budget (Keith Riel) was on council in 2022 when a five-year staffing plan was approved to hire 49 new officers.
The mayor, who sits on the police service board, then said the police have been “drastically underfunded” over the past decade, referring to the police having to acquire used, surplus, and obsolete tasers, rifles, office furniture, and bulletproof vests, and defended the new police facility by referring to past investments in fire stations. He also noted even higher police budget increases in other municipalities due to the impacts of new provincial legislation.
“My responsibility as mayor is to give the best resources possible to the men and women who wear the uniform of the Peterborough Police Service and to make sure our civilian force has the adequate resources to back them up each and every day,” Leal said.
Richard Freymond, the city’s finance and corporate support services commissioner, provided council with a presentation entitled “Mayor’s Budget 2026” that summarized the 2026 draft budget as well as the process for adopting a budget under the strong mayor powers of the Municipal Act.
The presentation resulted in some confusion about whether the 2026 budget was “the mayor’s budget” or a “council budget.”
Ontario regulation 530/22 under the Municipal Act states that the head of council of any municipality designated to have strong mayor powers is responsible for presenting a budget to council and the public by February 1. If a mayor does not present a budget by February 1, it becomes council’s responsibility to provide and adopt a budget.
If a mayor presents a budget before February 1, they can take different approaches to developing the budget. In some cases, such as in the Town of Cobourg, the mayor will direct staff to develop a proposed budget and then present the budget to council for consideration and possible amendments. In other cases, such as in Peterborough, the mayor will work with council throughout the process of developing the budget before presenting the final proposed budget to council.
In either case, after a budget is formally presented to council as the mayor’s budget, council has 30 days to propose any amendments to the budget. If there are no amendments within the 30-day period, the budget is considered adopted. If there are proposed amendments, the mayor can choose to accept them or veto them, with council having the ability to override a mayor’s veto with a two-thirds vote (with the mayor also voting). Through a majority vote, council can also choose to shorten or eliminate the 30-day amendment period after the mayor’s budget is presented.
In Freymond’s presentation to council on Monday evening, he noted that councillors were likely prepared to adopt the mayor’s budget that evening given the consultation process and deliberations already held with council on the budget.
Councillor Lachica asked Freymond whether he was confirming “this is a mayor’s budget and not a council’s budget.”
Freymond indicated that, legislatively, the budget is a mayor’s budget because it has been presented prior to February 1, but that the mayor chose to consult with councillors in developing the budget.
“Given the consultative process, he has, I believe, endorsed and accepted all the recommendations from council here this evening,” Freymond said.
Lachica then said there was never a formal statement that “this was indeed a mayor’s budget or whether the mayor has decided this would be a council’s budget.”
Freymond then clarified that a formal letter from Mayor Leal had been prepared to present the draft budget to council as the mayor’s budget, ready for his signature, but the mayor first “wanted to hear all the comments from his council colleagues here this evening before he declared it to be his budget.”
Once the mayor formally presents his budget to council, Freymond added, the 30-day amendment period would begin, and council would have the opportunity to shorten the amendment period by majority vote.
“Council could shorten it to this evening, and we could leave here tonight with an approved 2026 budget,” Freymond said.
After some further discussion, Mayor Leal read his letter to council formally presenting the mayor’s budget to council and to the public.
Immediately after the mayor read his letter, councillor Haacke put forward a motion referring to the relevant sections of the regulation under the Municipal Act proposing that council shorten the 30-day amendment period to December 8.
In response to councillor Haacke’s motion, councillor Lachica said “This is clearly something that’s been orchestrated and not shared with the rest of council.”
“We’re being denied 30 days to be able to review and to suggest and propose amendments to the strong mayor’s budget,” she said. “I find that it is again an orchestration of something that is taking away the democratic ability of councillors around this table if they wish, and the legislation allows it, to have 30 days … I find it undemocratic, and I find it orchestrated, and I find it unfair.”
Councillor Haacke disagreed, saying council had discussed the budget at length, but councillors could vote against his motion if they wished. He added he didn’t think anything was orchestrated, and that if councillors did not want to pass the budget that evening, they could vote against the motion.
For his part, councillor Riel called the motion “a complete affront to democracy.”
City CAO Jasbir Raina reminded council that the exact same process was followed in 2024.
Councillor Baldwin also objected to the “orchestrated” characterization, saying councillors understood they would be voting on the budget on December 8 for adoption.
“For any of us to suggest this was an orchestration behind closed doors is absolutely, irrevocably false,” he said.
For his part, councillor Duguay said “I do not feel under any circumstances that my role as a councillor has been diminished,” adding that the mayor has provided both councillors and the community the opportunity to discuss and provide feedback on the budget. He noted that there was only one public delegation that evening who addressed the budget.
Councillors voted on Haacke’s motion to shorten the 30-day amendment period to December 8, which carried 7-4, with councillors Lachica, Bierk, Crowley, and Riel voting against it.
Two votes were held on the budget, with one item (transit garage) separated out due to a pecuniary interest declared by councillor Duguay. The vote on the transit garage item carried 9-1, with Duguay abstaining and councillor Haacke voting against it.
Council then voted on the remainder of the budget, which carried 8-3, with councillors Lachica, Bierk, and Riel voting against it.
