Municipal budget’s fine, but

Trent Hills' plan for 2026 slashes savings and ignores future costs

But is one of the most important words in the English language.

Trent Hills council will soon approve a 2026 budget that seems conservative and sensible, but it actually sets the stage for potential financial trouble.

At a special meeting next Tuesday council is expected to pass a budget with a tax rate increase of about 4 per cent.

The potential trouble lies in the details of the budget. The first problem is that it cuts the amount set aside for large future expenditures. Like any household, a municipality puts some money in a savings account each year for large purchases such as new vehicles, road projects, or recreation centres.

Municipalities call the money they set aside reserves, not savings, but the principle is the same. And like us they face pressures every year to save less and spend more.

For 2026 council is planning to use money saved in the past to keep the tax increase below 5 per cent. It is also putting less into the savings account, or reserves for future years. It will put $750,000 into reserves for future costs but took out $1.1 million to keep this year’s taxes down.

That drop in savings might be OK and make sense if 2026 was a special year with extraordinary costs and the municipality was spending extra because it knew it could make up the difference in coming years.

But the only thing special about this year is that it is an election year, and most council members are likely to run again in October.

In fact, council has acknowledged that it knows the municipality will face major costs over the next few years that aren’t reflected in the 2026 budget.

The first major bill that will come due soon is the actual cost of police services. In 2024 the province negotiated a new contract with the Ontario Provincial Police that by the end of this year will hike the pay of an average officer to $123,000.

That contract raised policing costs for all of the 330 municipalities that rely on the OPP. Facing a wall of complaints, for 2025 the Ford government agreed to pay a chunk of the new costs. Trent Hills faced a 17 per cent hike but the province gave it $430,000 to keep the cost unchanged at $2.5 million.

Looking at a similar situation for 2026, Ontario decided to cap the increase for each municipality at 11 per cent, still well below the actual cost. This still means Trent Hills must pay $280,000 more for policing in 2026 and even more in the future.

To give you an idea of how much more just look at Cobourg which has its own police force and has reluctantly agreed to a 20 per cent budget hike. It’s now lobbying for provincial assistance.

The kicker is that council knows that at some point the municipality is going to have to pay the actual cost of those higher OPP salaries. Just not this year.

In fact, council decided to take $173,000 from the reserves/savings set aside for police costs and use it to keep the tax bill down this year.

The draft budget showed Trent Hills will use $360,000 from its reserves for operating expenses, up $140,000 or 64 per cent over 2025. The final number will be even higher since councillors bumped up the amount taken from the police reserve by $93,000.

Councillors asked Treasurer Christina Beaushaw how much was left in reserves in total but she only responded that she normally produces a report on reserves in the spring and they will find out then.

Council also decided to ignore another major cost on the horizon – the new Campbellford hospital that should be built on the western edge of town by 2032. The challenge is that the municipality will have to spend millions to extend sewer and water services to the site.

As well, under the province’s weird approach to hospital funding, the community must pay 10 per cent of the cost of constructing the new facility, estimated at $25-million to $30-million, and the full cost of outfitting the facility with beds, chairs, operating rooms, CT scanners and everything that turns an empty shell into a modern hospital – up to $70-million more. The hospital foundation will lead fundraising with the municipality expected to make a large contribution.

During the meeting on December 18, councillors shrugged off any need to start putting money aside now, suggesting they didn’t know how much might be needed.

The exchange left me shaking my head. Shortly after my grandson was born, I established a Registered Education Savings Plan to start gathering money for his post-secondary education. He’s 4 now and I have no real idea what the cost of his education will be in 15 years, but I feel better knowing that his RESP already holds about $15,000 and I put more in each year.

It’s not as if the municipal politicians don’t understand the concept. Some of them were on council several years back when they set up a special levy to help finance the new recreation centre and arena. That didn’t save the full cost, and we’ll be paying off a $20-million loan with $500,000 annual payments until 2045. But it would have been even worse if we hadn’t started early.

Part of the problem is that our politics is built on meeting short-term needs and desires. That’s not just a municipal issue, as we’re seeing the federal government scramble to finance a revamped military and all levels of government have let our infrastructure crumble.

We can see the same tendency in any bureaucracy or public company where the focus is on quarterly results, not longer-term needs.

So, what were the alternatives for 2026? Cut spending in some areas in order to properly save for future costs, or increase taxes to meet our actual costs. Neither option is great, but that’s our reality.

Unfortunately, we didn’t get to have a public discussion on those needs. Councillors don’t face ratepayers and their comments or questions in person, only accepting written comments that are easy to ignore.

Council plans to push the hospital funding problem off until next year, or beyond, when maybe it will be someone else’s problem.

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You can read all Trent Hills News stories on my website here.