2025 Budget Update: Operating budget

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• Budget summary
• Economic overview
• Operating budget
• Capital budget
• Long-term financial strategies
• Long-term financing tools
• Local boards and shared services

Learn about the foundations of the operating budget in the budget manual

Operating budget

Municipalities are required to deliver a balanced budget. The budget is the tool that determines how much money (or revenue) is needed to provide services to the community. The operating budget is funded by different revenue streams. Table 24 and Table 25 highlight the gross operating costs and operating funding sources, respectively, to bring the City’s budget to a balanced state.

Tax-supported budget

Property taxes fund just over half of the City’s budget. While it’s important to consider all revenue sources, generally speaking, property taxes represent the cost of providing goods and services that benefit Guelph residents as a whole.

City services

The 2025 budget update was prepared to balance affordability for the community with the investment required to maintain core service delivery in a growing city, while striving to advance the Future Guelph strategic plan.

The 2025 adopted tax levy for City services was 7.39 per cent, which included increases related to:

• Inflation
• Operating impacts from 2024 and prior capital budgets
• New service investments
• 50 per cent phase-in of 2024 staffing investments
• The impact of the City’s commitment to Guelph General Hospital, and
• An increase in capital transfers.

Further details can be found in the 2025 Budget Confirmation Planning Information Report.

To move the City’s tax levy from the adopted 7.39 per cent to the confirmed 3.66 per cent, all 2025 adopted budget investments were critically reviewed and prioritized within a framework that focused on the following factors:

• Creation of new housing units: Prioritizing the services required to enable more housing (water, wastewater, stormwater and roads).
• Meeting legislated and regulatory requirements: Prioritizing investments to meet legislative requirements, including maintaining standards in emergency service response, health and safety, and minimum winter road maintenance standards.
• Degree of disinvestment: Prioritizing investments where disinvestment or deferment carries a high or very high level of financial, regulatory or public risk.
• Impact to the public: Prioritizing, where possible, investments where disinvestment is deemed to have a significant impact to the residents based on existing service levels and expectations.
• Future Guelph Strategic Plan: Prioritizing items that meet the above criteria and additionally demonstrate the ability to advance the goals of the Future Guelph Strategic Plan in a measurable way.

In addition to assessing new 2025 investments in alignment with this framework, City staff provided proposals for disinvestment in current services that were evaluated using the same framework.

Table 26 breaks down the 2025 investment in City services by investment category, as well as the net change from the adopted to updated 2025 tax levy impact.

Base and Inflationary Adjustments

• The 2025 budget update includes the following base budget and inflationary changes from the previously-adopted 2025 budget, included in Table 27:
  • Building upon the 2024-2027 MYB, staff reviewed historical trends for expenses and revenues compared with the budget and made adjustments to ensure budget and actuals were properly aligned. Areas adjusted include:
    • Revenues in Parks, Culture and Recreation, Solid Waste and the City Clerk’s Office were adjusted to reflect current sales volumes,
    • Increased budgeted short-term interest based on current interest rate forecasts.
    • Reduction in printing, consulting and software maintenance in various departments throughout the City,
    • Optimization of streetlight and transportation service delivery to drive budget savings.
  • Increased revenue from Guelph Transit, which can be attributed to the return of ridership to pre-COVID levels sooner than anticipated, higher-than-expected uptake of the affordable bus pass program, and higher University enrollment.
  • The Land Ambulance Services Grant has been updated, as well as other minor revenue increases in Finance, Fire Services, and Culture and Recreation. Parking fines are recommended to increase 5 per cent, resulting in higher revenue.
  • Streetlighting costs are increasing due to Alectra Utilities applying a rate correction to the City’s account after energy consumption was reduced due to the LED streetlight conversion project. This rate correction will continue until electricity rates are reclassified in 2028. This is allowed under the Independent Electricity System Operator and is included in inflationary impacts in Table 27.
  • Additional inflationary adjustments in utility costs, facility and equipment maintenance, medical supplies, and software licensing fees to meet current service delivery needs.
  • Other base budget adjustments inclusive of higher recoveries for staff work on capital projects and work done for stormwater and water services and the deferral of remaining resources to 2026 and 2027.

Operating impacts from capital

• • The 2025 confirmed budget includes the following additional investments when compared to the 2024 adopted budget:
    • Operating investment for Guelph Transit to provide a new express bus service from Guelph Central Station to Guelph’s Conestoga College campus.
    • Operating investment to service paramedic shifts added in 2024.
    • Investment for various software licensing and software replacement in Information Technology.
    • Incremental costs to maintain road right of-way due to growth.
  • The 2025 confirmed budget includes the following changes from the previously-adopted 2025 budget, as outlined in Table 28:
    • As a result of the Baker Library grant, the phase-in strategies for the South End Community Centre and the Baker District Redevelopment were reviewed and updated to align budget increases to 2026 when both facilities are expected to open. Some costs will still be coming online in 2027 after the facilities are opened.
    • Changes in timing of the operating impacts as capital projects were prioritized and moved throughout the forecast are highlighted in the table below.

Growth

• The 2025 confirmed budget includes the following additional investments when compared to the 2024 adopted budget:
  • Growth investments in the 2025 budget update reflect the annualization by 50 per cent of operating budget investments from 2024 required to maintain our current service levels to our growing community. Specifically, costs related to the Housing Pledge staffing (Bill 23), planning Bill 109, paramedics shift expansions, and a human resources compensation coordinator.
  • A project specialist to fulfill legislated quarterly data call reporting requirements and drive development application process improvements, efficiencies and automation needed for compliance with Bill 23 More Homes Built Faster legislated timelines and to support Guelph’s Housing Pledge.
• The 2025 confirmed budget includes the following changes from adopted, Table 29:
  • The addition of a Council Administrative Assistant to support the twelve members of Council in executing their services to residents in the time frame and quality that is expected.
  • Deferral of the administration support included in the second year of the 2024 Paramedic Master Plan to 2026.
  • Addition of resources for affordable housing and an increased transfer to the Affordable Housing Reserve.
  • One time funding for an external consultant review of the Community Benefit Agreement program.
  • Additional Assessment Growth Revenue transferred to the Growth Reserve Fund per policy.

Service enhancements

Service enhancements represent the investments built into the budget that increase our service levels to our current and future Guelph community.

• The 2025 confirmed budget includes the following additional investments when compared to the 2024 adopted budget:
  • Increased resources for one-to-one inclusion supports of registrants in Recreation programming, including summer camps.
  • A Parks electrician to support maintenance and operation of new Parks infrastructure, as well as extending the season for current infrastructure. Reduction shown in Table 30 below.
• The 2025 confirmed budget includes the following changes from the previously-adopted 2025 budget, Table 30:
  • • Further cost refinement of the Amanda upgrade and bylaw review project.
    • In-year Council approval to increase the transfer to the Election Reserve to offer on-line voting in the next municipal election.
    • In-year Council approval to continue ownership of the Drill Hall building, resulting in the need for additional funding to maintain the current state of structural elements and primary systems.
    • In-year Council approval of an Administrative Penalty System (APS) for parking infractions as an alternative to the Provincial Offences Court system, which is included in the Courts Services budgets. The APS implementation results in additional parking ticket revenue recovered by Operations.
    • Pilot programs in Transit to allow youth to ride free on weekdays after 5 p.m. and all day on weekends, holidays and summer, and seniors to ride free one day per week, which are mainly funded through Tax Operating Contingency Reserve (180) for one year.
    • Free Transit for Affordable Buss Pass Tier A and B.
    • Removing the funding from the tax operating contingency reserve for the bicentennial celebrations, the budget remains for the bicentennial enhancement events.
    • Increase the base budget for Community Grants.
    • Increase the budget to provide a resource to expand sponsorship and identify potential corporate partnerships, funded by a transfer from the Tax Operating Contingency Reserve
  • • Emergency funding for Homelessness and increased transfer to the Affordable Housing Reserve Fund.
    • The remaining items were deferred to 2026 or 2027 as noted in the table below.

Service reductions

Table 31 provides the summary of the tax-supported reductions to current services, by service area, that were identified by staff for Council consideration. Table 32 through Table 36 provide the details of the service reductions by service area.

Table 36 Service reductions changes from 2025 adopted budget by service area.

Capital Transfers

• The capital budget is funded through annual transfers from the operating budget to capital reserve funds. In 2024, increases to capital funding were built into the budget over the four-year period to address inflation, the historical backlog of infrastructure renewal increases, and prior approvals of capital increases for Race to Zero and the Baker District Library.
• The 2025 confirmed budget invests an additional $6.4 million over 2024 into capital reserve funds.
• The 2025 confirmed budget reflects a reduced investment in capital funding of $3.7 million compared with the previously-adopted 2025 budget. Further details are available in the capital budget and financial strategy sections of this website.

Assessment growth revenue

Through the MYB, the City has set assessment growth revenue assumptions at 1.15 per cent of the base budget per year. This rate has remained consistent through the 2025 budget update, however, at the time of writing this level of assessment growth has not yet been confirmed; a negative variance of approximately $500 thousand is possible and funding for this possibility has been earmarked in the Tax Operating Contingency reserve (180) forecast. Assessment growth revenue is allocated proportionately with 67 per cent distributed to the City and 33 per cent distributed to LBSS agencies. Actual assessment growth revenue for 2025 was confirmed at 1.34%.

The Municipal Property Assessment Corporation (MPAC) has a four-year assessment cycle, however, the 2020 Assessment Update was postponed by the Ontario government due to the COVID-19 pandemic. This means that current property values are based on the 2016 assessment cycle. This has resulted in fewer appeals and requests for reconsideration, meaning the City was in a surplus position of $1.3 million in 2023 and is forecasting a surplus of $1.0 million in 2024 related to appeals costs. This is expected to continue until the next assessment cycle, and therefore budgeted assessment appeals and write-offs were decreased by $400,000 in 2024 and increased in 2026 based on staff’s best estimate of the timing of the next provincial assessment update. Without an announcement to date, staff feel it is unlikely to occur in 2024 for the 2025 taxation year.

Hospital Support

In 2019, the City engaged in discussion with the Guelph General Hospital (GGH) to determine upcoming capital expansion requirements of the hospital that address immediate and urgent capital needs. Through the staff report, three capital projects were identified, totaling $45 million, with a request from the hospital to support a 10 per cent investment of the total project over five years. As part of the 2020 City budget, Council approved the hospital’s request to support a $4.5 million dollar investment over a six-year term to be added to the City’s base budget and presented as a separate hospital levy on the tax bill. For years one through three of the commitment, Council approved the investment to be funded from the Tax Rate Operating Contingency reserve. The continued use of reserves to fund this commitment is not recommended as tax contingency reserves have been exhausted through the planning process. More information about the status of City reserves is detailed in the Reserve section of the website. The six-year commitment will come to an end in 2026, and therefore the reversal of the base adjustment will occur as part of the 2027 budget, Table 33.

On November 27, Council amended the budget to fund the 2025 transfer of Guelph General Hospital levy from the Tax Rate Operating Contingency Reserve.

2025 user fee update

The Revenue Budgeting Policy directs that as costs increase, user fees should also increase proportionately to maintain the appropriate cost recovery ratios based on the assessment of who benefits from the service. The 2025-2027 rates, fees and charges guide can be found on the budget website. On average, 2025 user fees are increasing two percent over 2024 rates. Some fees have increased at rates greater than inflation, including:

• Finance fees for issuance of tax certificates, to reflect actual increasing costs and overall market comparison.
• Solid Waste Services increase for large items surcharge and appliances requiring refrigerant pump down.
• Administrative change to registration fees for senior fitness/sport/dance programs as well as removal of rental phase in for dance competitions.

New fees introduced in the 2025 budget update:

• Fire services fees relating to the cost recovery for fire safety inspections, enforcement, fire investigations, and plan reviews.
• Recreation new building rental fee for Sleeman Centre non-ticketed events and a new fee for special event picnic table rentals.
• Solid Waste fees related to the collection of recyclables at the public drop off locations and a mattress disposal fee.

An update to the Development Applications Fee By-law is also proposed through the budget companion report to respond to changes made through Bill 185.

A complete representation of the tax-supported operating budget, by department, as well as the details of operating budget requests are available for review in the 2025 Budget Update dashboard.

Non-tax-supported budget

The City’s non-tax supported budget is comprised of stormwater services, water services, wastewater services, parking services, Ontario Building Code Administration (OBCA) and court services. The budgets with significant highlights follow. Water and wastewater rates include an amount to fund the City’s commitment to Grand River Conservation Authority which is part of the LBSS budget that will be presented to Council in January 2025.

Water, wastewater, and stormwater rates

The City’s second largest revenue source after property taxes are the collective water, wastewater and stormwater rate revenues. These revenues are charged based on a user fee model; the water and wastewater rate include both a fixed and variable component based on use, while the stormwater rate is charged based on a property’s impervious area. These rate services are critical housing-enabling services that have significant capital asset inventories that are both aging and in need of upsizing to meet Guelph’s increased population and jobs targets.

Similar to the property tax review and prioritization, the 2025 budget update included a rate review with updates based on the outcomes of the prioritization process. The results are detailed in Table 38.

City services

The City services portion of the rate includes investment to maintain core service delivery in a growing community while striving to advance the Future Guelph Strategic Plan. Table 39 breaks down the City’s controllable annual investment to rate services by investment category as well as the rate impact for each year.

Base and Inflationary Impacts

• The 2025 confirmed budget includes the following changes from the previously-adopted 2025 budget:
  • Additional volumetric revenues in Water and Wastewater for consumption.
  • Updated revenues to reflect the current Equivalent Residential Units (ERUs) as the basis for monthly charges in Stormwater.

Operating Impacts from Capital

• The 2025 confirmed budget includes the following investments over the 2024 adopted budget:
  • An investment to manage the ongoing scope of work in maintaining the Arkell site trail networks, forest health, invasive species management, and security upgrades.
• The 2025 confirmed budget includes the following changes from the previously-adopted 2025 budget:
  • Resourcing for data review and additional oversight of the Wastewater Closed Circuit Television and hydraulic cleaning program were moved from 2025 to 2026.

Growth

The rate budgets are significantly impacted by the development charge revenue loss impacts from Bill 23. More information on the impact of development charge revenue loss is detailed in the growth strategy.

As previously mentioned, water, wastewater and stormwater infrastructure are the services that the City needs to enable more housing and meet the Housing Pledge and as a result, there are staffing impacts to accelerating development application reviews and responding to the anticipated higher volumes of inspections and servicing requirements.

• The 2025 confirmed budget includes the following investments over the 2024 adopted budget:
  • A Senior Hydrogeologist in water to support the implementation of the master plan work, groundwater flow model and to ensure water is available to support the growing community.
  • Additional volumetric and ERUs revenue due to growth throughout the city.

Service reductions

Table 40 provides the details of the non-tax-supported service reductions by service area that are included in the 2025 confirmed budget.

Capital transfers

• The 2025 confirmed budget invests an additional $6.7 million over 2024 into capital reserve funds.
• The 2025 confirmed budget reflects a reduced investment into capital of $0.9 million compared with the 2025 adopted budget. Further details are available in the capital budget and financial strategy sections of this website.

The above noted investments to increase capital funding over time to offset the impacts of Bill 23 exemptions, discounts, and rate phase-ins are significantly lower than the projected costs associated with Bill 23 for the rate supported services, as outlined in Table 41.

This table shows that over the multi-year budget period, water, wastewater, and stormwater rates supported capital funding that would otherwise be available to support the capital programs of work for these services are instead being redirected to funding development charge exemptions, discounts, and phase-in costs.

Water and Wastewater rates include an amount to fund the City’s commitment to Grand River Conservation Authority (GRCA) which is part of the LBSS agency’s  budget. This will be presented to Council in January 2025. The average residential billing impact will be updated following the approval of the LBSS agencies’ budgets to include the GRCA impact on budget approval.

The average residential rate impacts over the next four years are provided in Table 42.

A four-year average monthly increase of $8.07 over the three rate services is needed to ensure infrastructure is being maintained in a state of good repair, service is being delivered to a growing population, all requirements of the Safe Drinking Water Act are being met, and our city is in a better position to accommodate more severe and frequent storms. As identified in the budget companion report, further assessment of the long-term capital needs of the water and wastewater services, and the impact on customers of adjusting utility rates between the services to achieve a balanced capital reserve fund forecast will be presented as part of the 2026 budget confirmation process.

The water, wastewater, and stormwater user rates are impacted by a multitude of pressures as noted above. The average three-person household consumes 180 cubic meters in a year and has an average impervious area of 188 square meters. From a residential bill perspective, the City portion of the monthly increase to the average household for 2025 is estimated in Table 43.

Ontario Building Code Administration (OBCA)

The City’s Building Services division authorizes all building construction and demolition in Guelph. The administration and enforcement of activities are completely funded by revenues generated from building permit fees.

The OBCA budget is driven mainly by inflation and providing core service delivery to a growing population. The 2025 confirmed budget includes a revenue reduction based on the slower than anticipated pace of new construction included in the previously-adopted 2025 budget. This slowing is a broader provincial trend in the home construction industry that, as reported by CBC News, has seen new home starts slow to 2018 levels.

Parking services

The Parking budget was prepared in accordance with the Downtown Parking Master Plan

The 2025 confirmed budget includes a reduction of tax support for parking operations and a corresponding reduction in contributions to the Parking capital reserve funds. The Service Enhancement Strategy provides more information. Overall, the operation is funded by a mix of parking revenue (89 per cent) and property taxes (11 per cent) in 2025.

Court Services

The Provincial Offences Court is responsible for the administrative and prosecutorial processes arising from violations contrary to provincial statutes and regulations, and is fully funded though fines and penalty revenues.

The 2025 confirmed budget includes the addition of the new Administrative Penalty System for parking, including staffing and software fully offset by additional revenue.