5 Steps to a Better City Budget for 2026

A better budget starts with meaningful public engagement.

I’ll be taking a few weeks holiday. Regular posts will resume in mid-January. I hope you have a restful and happy holiday season.

No, the process did not work

Ottawa Council recently approved its 2025 budget. Next year, the city will be spending $5 billion in operations and a further $1.7 billion in capital projects.

That’s a lot of money.

The City has a process for coming up with its yearly budget. An important part of that process is to provide residents with the opportunity to chime in on how their tax dollars should be spent.

Did the budget process work?

The Mayor says yes.

“So, I think the process worked”.

— Mark Sutcliffe on the 2025 City Budget
11 December 2024 as quoted by CBC News

I suspect most residents would say no. Anyone who tried to engage likely shares the views of the authors of this Ottawa Citizen op-ed, namely, that the Mayor and some others on Council had little interested in hearing what the public had to say.

(I make a cameo appearance in that op-ed as the “first speaker”.)

I want to talk about what a better budget process for 2026 could look like.

But first, we need to kick a bad habit.

Budgets should be more than one number

Over the past twenty years, Ottawa mayors have trained us to see city budgets as about one thing only. The annual property tax increase number.

Larry O’Brien ran his 2006 campaign on “zero means zero”. (Even if Larry’s zero turned into 14%). Jim Watson kept his property tax increases to 2-3%. Mark Sutcliffe ran on a 2 to 2.5% budget increase for 2023 and 2024.

For 2025, the headline number is a 3.9% property tax increase.

Horse before the cart

This approach is backwards.

Of course, we all want our taxes to be as low as possible. But by starting with an arbitrary number, we end up with the smallest tax increase possible to accommodate inflation and with little scope for anything else.

Furthermore, by aiming for the lowest number possible, we end up punting into the future absolutely everything we can. Especially critical infrastructure repair and replacement — which I talked about last week.

Infrastructure renewal is very expensive. And so either we face up to the costs and create a plan for financing what needs to be done. Or we simply put off needed repairs for future councils to manage while hoping that nothing catastrophic happens in the meantime (like the bursting water mains in Calgary and Montreal earlier this year).

When politicians focus on keeping the property tax increase to the lowest possible number, the result is no ability to invest in the future or build the city that we deserve.

Let’s consider what a better process would look like, compared with how the City of Ottawa does the budget process now.

The current way

In recent years, the City’s budget process has looked something like this:

1. In the fall or late summer, the Budget Directions comes out, setting out the broad fiscal parameters, including the property tax increase number.

2. In mid-November, the Mayor gives his budget speech and the draft budget books for each spending “department” (transportation, police, libraries, …) are released. These draft books lay out the cost of operations, grouped in high-level categories that are not particularly meaningful to anyone. The draft books also lay out the capital projects getting funded that year.

3. From mid-November to early-December, Council Committees consider each of these departmental budgets. This is the main opportunity for the public to speak to Council members about that specific departmental budget.

4. Also at this time, Councillors hold “budget consultations”. These are really just public information sessions where City staff explain the budget big picture while running out the clock on the time available for people to ask real questions. Some Councillors let the public speak out loud at these online discussions. Many gather questions in a chat box and have a facilitator ask them. These meetings provide little scope to propose changes to the budget.

5. In mid-December, Council debates and approves the budget. Normally, there are few changes between the draft and approved budgets, except when something exceptionally unpopular is proposed (such as the original proposal to increase the cost of seniors’ bus passes by 120%).

If City Hall wanted to, it could create a much better process. That would look something like the five points below.

1. Start much earlier in the year

I would argue that the current process is designed to preempt meaningful public engagement.

Staff already have a pretty good sense of what the 2026 budget will look like. If they wanted, staff could start the process of consultation today.

Councillor Menard is pushing to start consultations in the spring, as per his tasking of staff during the 2025 Budget debate:

I agree that starting the budget process in the spring makes sense.

But that consultation needs to be more than a public information session. For meaningful consultation, that budget process would need to address the points below.

2. Be clear about current spending

You would expect your city budget to tell you how much they are currently spending on what residents care about. Like snow clearing, fixing roads, or lifeguards. And how much it would cost to increase service levels, such as extending lifeguards into September.

But that’s not something you can see in the City of Ottawa budget or other financial documents. Spending is all presented as large amalgamated categories, which make it impossible to understand budget choices.

I want city documents that pass the pothole test, i.e., can you look at the budget and see how much the City is spending to fill potholes? How many potholes does this fix? If we wanted better or faster pothole repair, what could we expect and at what cost?

3. Explain the long-term outlook and how to fill the infrastructure gap

Residents also need to understand the long-term financial track we are on.

We know that there is a funding gap in renewing our infrastructure. All the roads and pipes that we put into new communities in Kanata and Orleans in the 1980s and 1990s are going to have to be upgrade over the next few decades.

That’s going to cost a boatload of money, but the city is not transparent about how much.

In their asset management plans, the City says that, over the next 10 years, we have a $1.7 billion deficit in roads and sewers, and a further $3 billion in renewing other infrastructure, such as arenas, fire stations and land fills.

But it’s not even clear if those numbers are correct. Is this all based off the City’s long-range financial plan, last released in 2017? Have costs been updated since then?

The Mayor’s approach has been eerily similar to that of an American insurance industry. Delay infrastructure fixes. Deny we have a problem. Defend the approach taken by City Hall.

4. Have meaningful public engagement around …

For consultation to be more than simply an information session, give the public the opportunity to meaningfully engage on three issues.

a- What sort of City we want

Before we set the budget number, we should have a discussion of what we expect from our City Hall. A functioning transit system? Pools and beaches that stay open as climate change extends their season? Swimming lessons for all kids who want them? Libraries open on Sundays?

b- How much proposals would cost

The public need to understand how much these proposals would cost, and what we can afford. Currently, we are not provided with any estimates of what additional programming would cost, unless a councillor had happened to ask staff earlier in the year.

c- How proposals could be paid for

Once we understand the costs, we can then talk about different funding sources.

Ottawa City Hall likes to frame all spending initiatives in terms of what they would mean to your property tax bill. A 1% property tax increase generates about $20 million for the City.

Property taxes are one way to pay for new spending, but there are others sources of revenue that the city could consider. User fees. Federal and provincial funding envelopes. Development charges. Reserves. Asking the province to grant us new revenue authorities.

The opportunity to use these alternate sources of funds needs to be considered for each proposal.

5. Make the trade-offs and determine the required property tax increase

Once we have a sense of what we want from City Hall, how much proposals would cost, and different ways that we could fund new spending, the final step is to have a discussion around trade-offs.

What new services do we want enough that we are prepared to find a way to pay for them?

Once we’ve brought that discussion to a conclusion, only then does it make sense to set the property tax increase rate.

But does City Hall want to change?

This better process all assumes that the City wants meaningful public input on the budget.

Ottawa City Hall does not appear to be genuinely interested in hearing what the public have to say on anything, much less on how they spend your tax dollars.

So I’m not hopeful that we’ll see any impactful changes for the 2026 budget. We’ll have a new Council in time for the 2027 budget. Maybe we’ll get a meaningful budget process then.