One of the biggest financial challenges facing Ontario municipalities is an outdated funding model that no longer works.
According to the Association of Municipalities of Ontario, municipalities face a $4 billion annual funding gap because property taxes are being used to pay for services that should be funded by the province.
That’s why Town of Whitby Mayor Elizabeth Roy brought forward a motion earlier this year, supported by Whitby Council, calling on the province to:
- Address the $4 billion annual municipal funding shortfall
- Address the $1.5 billion annual burden of downloaded social housing costs
- Re-evaluate the requirement for municipalities to pay 10% of hospital capital costs
- Share housing-related revenues, such as Land Transfer Tax and HST revenues, with municipalities
Other pressures impacting municipalities include rapid growth, historically high inflation, and rising construction and infrastructure costs, she points out.
Decreasing Budget Increases
During this term of council, which began in 2022, Whitby’s budget increases have gone down each year, she said.
- 2023: 5.8% (2% increase on the residential tax bill)
- 2024: 4.40% (1.5% increase on the residential tax bill)
- 2025: 3.99% (1.4% increase on the residential tax bill)
- 2026: 3.44% (1.2 % increase on the residential tax bill)
“In fact, while inflation peaked at more than 8 per cent in Canada during this council term, Whitby’s budget increases have stayed below the rate of inflation and steadily declined year-over-year,” the mayor pointed out.
She said that didn’t happen by accident. It’s the result of a deliberate effort to find efficiencies and create new revenue sources including:
- An independent, third-party Core Services Review that she ordered is currently underway to find cost savings and efficiencies. Recommendations will come to the new council.
- Town departments are conducting detailed, line-by-line reviews of their budgets each year. This identified over $2 million in savings in the 2026 budget
- A new Municipal Accommodation Tax on hotel and motel stays generated more than $600,000 in new revenue in 2025, its first full year in effect
- New sponsorship deals include a $1.5 million, 10-year naming rights agreement for the Fieldgate Sports Complex
- An increased focus on securing provincial and federal grants with a record-setting $76 million in grants for Whitby over the past two years
- A focus on attracting major investments to help diversify our tax base. This includes a new Mazda Canada Parts Distribution Centre, SoftMoc Headquarters, Amazon Sort Centre, and Toromont CAT facility in Brooklin
She was responding to residents who said they are frustrated that property taxes have increased, at a time when many people are struggling with the cost of living.