City Manager and Chief Administrative Officer Paul Mitcham tells the story in his response to the petition presented in February:

“… in response to the petition below requesting a 0% tax rate increase in City of Mississauga for 2021.

[The email] refers only to the local share of the tax rate increase subject to budget approval, but keep in mind that the overall tax rate is a combination of local and regional budget changes as below.

1.0% City of Mississauga
1.3% Region of Peel
2.3% Total Increase Residential Tax Rate

 

To consider the 2021 budget, one must first recall 2020.  The pandemic started in Mississauga with the lockdowns which were imposed in mid-March.  This forced the City to close its facilities to the public, move to work from home for about 40 per cent of its workforce and run empty buses as many of the public worked from home or found alternate means of transportation.  Additionally physical distancing required centre of bus boarding and no fares could be collected as a result.  The City suddenly had a revenue problem primarily related to transit and to recreation, library and parks programs.  Additionally, parking revenues were down as a result of the lockdown and POA revenue dropped as the court system closed.

Council took decisive action by laying off temporary staff related to programming, imposed a hiring freeze and reduced discretionary costs.  Additionally, the public was protected through deferrals of taxes and storm water charges.  Other public measures were taken such as deferring or foregoing rents for City tenants.

Other City costs increased due to physical distancing, the need for personal protective equipment and the need for increased enforcement of public health measures.

Throughout 2020, all City services were maintained.  While staff were redeployed or reduced where possible, our staff continued to work and to provide the services needed by the public.  With the exception of recreation programs which are generally funded from user fees, it is just not true that the public did not receive the services that they paid for through their taxes.

The City would have had an approximate $55 million deficit had our advocacy efforts through AMO and FCM not been successful.  With the safe restart funding provided by the Federal and Provincial governments we have ended the year in a neutral position with no deficit.  Our capital program remains intact, our City building efforts can continue and our financial position remains secure.

When staff developed the 2021 budget, they recognized the huge financial impact on many of our residents and businesses.  A 1 per cent tax increase on the tax bill was targeted and met.  No new services were proposed, few staff funded by property tax were approved and transit savings were built into the budget. The 1 per cent is calculated as follows:

Description Budget
Change (%)
Tax Bill
Impact (%)
Tax Bill
Impact ($)
Normal Operations 0.7 0.3 16
New Initiatives (0.0) (0.0) (1)
Infrastructure Levy 2.0 0.7 41
Total 2.7 1.0 56

 

Staff costs account for most of the increase in normal operations.  The rationale for this has been discussed many times in the past with Council.

We are of the opinion that the two per cent infrastructure levy is necessary if Council wishes to build the City in a reasonable time frame.  In our budget presentation on November 23, 2020 we noted that elimination of the 2 per cent levy in 2021 will reduce funding for capital works by $90 million over ten years.  With a City share of $226 million required for all of the ICIP projects expected to be approved by the senior governments in the next 7 years, significant spending required for the waterfront and downtown buildouts, and a declared climate emergency requiring transit bus electrification and increased building standards to meet our 2030 commitment we cannot afford to reduce or eliminate the infrastructure levy this year.

Assuming that Council approves a 1 per cent increase on the tax bill, the City will still be in for a difficult year.  It is too early to forecast the 2021 deficit but it is likely to be similar to 2020.  We are awaiting confirmation that all of the safe restart agreements general and transit funding can be used throughout 2021 instead of just up to March 31.  We do not expect transit ridership to increase back to 2019 levels until some time in 2022 or 2023 at the earliest and it is likely that recreation and library services will not be able to restart for several months yet.  We have sufficient financial capacity to get through 2021 although we may yet need to recommend additional cost savings to Council as the year progresses.  Additionally, Council may desire to provide additional support programs to the public as needs arise.

And please remember that 2022 will also be a challenge with a minimum revenue loss of $22 million due to low passenger count at Pearson Airport and the impending reduction in the airport PILT.  In yesterday’s news, the airport staff indicated that it might take up to 7 years for passenger travel to return to 2019 levels.  So even if the Provincial government removes the cap on the PILT, the City could be in for an extended period of reduced PILT revenues.

The question has been asked about how are Brampton, Vaughan and Markham able to approve a 0 per cent tax increase on the City portion of the tax bill.  All three are rapidly growing Cities reliant on development charges to fund their capital programs.  In general, as Cities expand, the revenues increase faster than the costs because the municipality can collect the new tax revenues before it needs to provide services such as recreation centres, libraries and road maintenance.  As Council has remarked before, it would have been nice to have set aside some of those revenues 20 years ago, rather than freeze taxes for a decade as seems to be occurring in Markham, Brampton and to some extent Vaughan.  While Brampton has a healthy balance sheet today, it is borrowing internally and will have to pay itself back at some point.

Mississauga’s taxes continue to remain in the middle of our comparator group and are below the GTA average.  Our proposed increase of 1 per cent compares favourably with other municipalities and our combined Region and City increase is well below Hamilton’s and London’s 3.6 and 3.4 per cent increases and roughly the same as Toronto’s proposed 2.2 per cent increase.  In dollar terms the City cost is increasing by $56 (a dollar a week) for an average single family home assessed at $730,000 and the storm water charge is increasing by $2.20 or less per year for 75 per cent of the residential properties.”
Paul A. Mitcham, P.Eng., MBA