2026 Budget Update

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Budget Summary

The 2026 budget marks Guelph’s second confirmation year within the 2024–2027 multi-year budget (MYB) cycle. It reflects the City’s continued commitment to strategic investment and responsible financial planning, while carefully balancing the needs of a growing community with affordability pressures and sound fiscal stewardship

The Mayor’s 2026 Draft Budget Update includes the following tax and water utility rate increases:

Table 1 2026 draft City services tax levy requirement

Levy type	2026 Forecast	2026 Update	2027 Forecast	2028 Forecast	2029 Forecast
Tax levy – City services	4.51%	3.17%	4.31%	3.67%	3.26%
Tax levy – Guelph General Hospital (GGH)	0.21%	0.21%	(0.20%)	0%	0%

The median residential property value for a single-family detached home in 2025 is $410,000. The City services and hospital levy increases for the average residential property tax bill, based on the 2025 median assessment and 2025 tax policy is estimated in table 2.

Table 2 Estimated tax impact on the median residential property

Levy type	2026 Forecast	2026 Update
2025 annual tax – median residential property	$5,103.27	$5,103.27
Annual City service tax increase over prior period	$230.16	$161.77
Annual GGH tax increase over prior period	$10.72	$10.72

The overall increase to the utility rate supported services (water, wastewater, and stormwater) for the average residential customer is outlined in table 3.

Table 3 Residential rate impacts

Rate type	2026 forecast  ($ millions)	2026 forecast rate impact (%)	2026 update ($ millions)	2026 update rate impact (%)
Rate – City services	$9.1	9.82%	$9.3	10.14%

The average three-person household consumes 180 cubic meters of water in a year and has a property with an average impervious area of 188 square meters. The residential rate impacts to the average residential bill are identified in table 4.

Table 4 Average residential bill impact

Average Residential Monthly Impact	2026 forecast	2026 update
Increase to the average residential household per month	$9.33	$9.63

Guelph’s Budget Story

Municipal governments, including Guelph, are navigating increasingly complex challenges, including housing affordability, social issues, tariffs, and economic uncertainty stemming from changing global trade dynamics. In the absence of a more progressive Provincial-Municipal fiscal framework, these pressures, compounded by frequent legislative changes that have shifted more financial responsibility for growth enabling infrastructure onto property taxpayers, continue to strain the City’s ability to deliver services and invest in infrastructure in a financially sustainable way.

While the high inflation of 2021 to 2023 seems long ago, the City’s budget is still catching up with its impacts through the renewal of multi-year collective bargaining agreements. In addition, the recent tariff driven cost escalations for automotive parts continue to put pressure on expenses. Maintaining and enhancing essential services that residents and businesses rely on while striving for affordability requires difficult decisions, such as deferring capital investment, extending the service life of existing assets, and proposing service level reductions. While these are challenging conversations, this ongoing fiscal balancing act reflects the City’s commitment to meeting community needs while safeguarding our community’s long-term financial sustainability.

The Mayor’s draft 2026 Budget Update reflects three key themes:

1. Investments and value for our community

The 2026 budget includes key investments that reflect the City’s commitment to delivering value for the community and supporting long-term growth including:

• Transit service enhancements (route 98 expansion, affordable bus pass digitization, activation of digital signs, seniors and youth ride free programs).
• Two additional paramedic shifts.
• The opening of the new South End Community Centre.
• Increased investment in seniors’ services, waste diversion, and community climate change leadership.
• Next Generation 911, bringing Guelph faster, smarter emergency response.
• Continued investment in information technology to safeguard and enhance our digital environment, while laying the foundation to support future advanced technologies.
• Major capital investment in growth enabling infrastructure, high priority asset renewal, transit electrification and expansion.

2. Responding to slower growth

In response to lower projected revenues from development charges (DCs), Ontario Building Code permits, utility rate growth, this budget responds to slower growth by:

• Deferring capital and operating investments.
• Preserving capital investments that enable city-wide growth and/or serve both growth and renewal objectives simultaneously.
• Leveraging the Municipal Service and Financing Agreements policy to move infrastructure forward if developers are ready ahead of our fiscal capacity.

3. Base budget changes

The 2026 base budget reflects a range of considerations including:

• Compensation adjustments – inflationary catch-ups for renewed collective bargaining agreements and rising costs associated with supporting the mental health and workplace safety of our frontline emergency service professionals.
• Fleet pressures – aging vehicles and increasing parts and labour costs (including tariff impacts).
• Savings from elimination of the carbon tax and administrative optimization decisions.
• Service level reductions to balance the needs of our growing community with affordability pressures. Service reductions proposed in the draft budget include: reduced funding for 100 per cent renewable energy initiatives; removal of winter maintenance for on-street bike lanes; reduction in service levels related to asset condition and maintenance, environmental policy planning, cultural services; and a reduction in funding for Council training. In addition, the draft budget proposes new and increased fees and/or fee hours for finance, parking and solid waste services.

Key takeaways

Risks and considerations

• After many years of detailed budget analysis and baseline adjustments, the budget is tighter than ever, and there is less capacity to absorb unplanned in-year impacts.
• Low contingency reserve balances increase the City’s vulnerability and decrease flexibility to phase-in new pressures.
• Timing uncertainty for recovery of development activity and the related revenue and reserve impacts including tax assessment growth which is at risk of being lower than the budgeted assumption for 2026.
• Continued growth revenue uncertainty from frequent legislative changes and increasing complexity of administering development charge collections from frequent changes.
• Deferred capital state of good repair work continues to put pressure on operating budget through increased maintenance costs.
• Uncertainty around the world: tariffs, conflicts, and shifting geopolitical alliances are driving some costs up and are in some cases diverting staff capacity from the delivery of core municipal services.

Opportunities

• Continued strategic approach to grant management, pursuing all opportunities offered by the federal and provincial governments.
• Ongoing engagement in strategic advocacy with federal and provincial governments to highlight challenges and promote high impact investments they can make in municipal services.
• Continue to leverage prioritization criteria to make data driven budget recommendations to Mayor & Council.

Future Guelph Strategic Plan alignment

Implementation of the Future Guelph Strategic Plan remained an important factor in determining priorities for the 2026 budget update. However, as the City balances progress toward Council’s objectives with affordability pressures, the pace of implementation in some areas continues to be slowed. Similar to the 2025 confirmed budget, further prioritization of initiatives within the Future Guelph Strategic Plan occurred and focused on areas of the plan tied to housing, affordability, and core infrastructure renewal.

The following provides more details related to investments and impacted initiatives as part of the 2026 draft budget update:

Foundations

• Supporting staff wellness through investment in occupational health and safety.
• Maintaining investments in core information technology renewal to support accountability through improved cyber-security, data-driven decision making, and process efficiencies. However, investments to modernize privacy and information management have been delayed.
• Funds for Advisory Committees of Council reimbursements and training are included to support City governance. 
• Continuing to prioritize infrastructure investment as part of the capital budget update. Assets associated with higher risks and those directly associated with new housing development were maintained, while others were deferred out of the 2026 to 2028 period due to low DC collections. As the asset management backlog continues to be a challenge, service interruptions resulting from asset condition may occur more frequently.
• Maintaining existing investments in the implementation of the equity lens, but a planned expansion was shifted to a future year.
• Continued focus on pursuing external funding opportunities (grants) to offset financial pressures and deliver on priorities within the Strategic Plan.

City Building

• Investment in policy and technology initiatives that support housing and infrastructure and help enable new housing starts continue to be prioritized for 2026. This includes an increase to the affordable housing reserve transfer, the upgrade of the biosolids facility at the Water Resource Recovery Centre, Verney Booster Pumping Station upgrades, and the reconstruction of Wyndham Street North which will support growth in the downtown.
• Implementation of the Recreation and Trail Master Plans remains slowed as part of capital prioritization, but an increase in City investment for the community-led, City-supported Guelph to Goderich Trail enhancements has been added.
• The construction of the Baker District Library and Parkade and the South End Community Centre are on track and expected to open in late 2026.
• Taking a balanced approach to Transportation System investments – while advancing the objective of “making it easier to get around” this budget prioritizes transit system investments while slowing cycling and active transportation programs of work. Transit investments in 2026 include implementation of the Guelph Transit Future Ready Action Plan through Route 98 – Speedvale enhancements beginning in September 2026; digitization of subsidy applications which will help streamline the process for the affordable bus pass; the seniors and youth ride free programs piloted in 2025 have been made permanent; and digital signs approved through previous capital budgets will be activated.

Environment

• The City continues to invest in climate adaptation and mitigation, including major investment in the Guelph Transit and Fleet Services facility that enables continued electrification and expansion of the transit fleet and a new investment for community climate leadership. However, capital funding that was dedicated to support other City corporate energy projects has been eliminated.
• Investment in stormwater management is focused on the highest risk areas across the city such as the Exhibition Park neighbourhood. The Exhibition Park Neighbourhood Infrastructure Improvements Program is a body of work that will address aging water, sanitary, and stormwater infrastructure and will upsize undersized watermain and sanitary sewers to support growth. It will also add stormwater infrastructure to alleviate localized flooding at and around the intersection of Division and Exhibition Street. The program is being implemented in nine phases to deliver the full solution. Construction for Phase 1 will begin in 2026, with funding for Phase 2 construction and Phase 3 design also included in the 2026 budget. This program is expected to continue throughout the full 10-year forecast.

People and Economy

• There are continued investments in emergency services to support the City in meeting its response times with two additional paramedic shifts and the city-wide implementation of the provincially mandated Next Generation 911 dispatch system.
• Continued progress towards implementation of the Downtown Infrastructure Renewal Plan with construction beginning on Wyndham Street North and design work beginning on Macdonnell Street Reconstruction and Macdonnell Bridge and Allan’s Structure beginning in 2026. Other downtown investments include investments to sustain enhanced security and bylaw response in the Downtown area.
• Renewed and expanded Community Benefit agreements to enhance services for seniors, waste reduction, and supports for vulnerable individuals and businesses.

Background

The 2024-2027 multi-year budget was the City’s first four-year budget and it was built to advance the objectives of the Future Guelph Strategic Plan. The Municipal Act requires that if a municipality passes a MYB, they must “readopt” the budget for every second or subsequent year, either in the year that the budget applies, or in the preceding year. The budget confirmation process, which includes reviewing, updating, and confirming the budget, is the mechanism for readoption in the City’s Budget Policy.

The City’s budget process is separated into two parts, with the first part focused on the City services budget (including consideration of the hospital levy), and the second part focused on the LBSS budgets. The focus of these materials is the City services budget and the LBSS budgets will be discussed by Council on December 17, 2025. The Local Boards and Shared Services page on Guelph.ca/budget will be updated to include LBSS budget materials in early December.

In November 2023, Guelph’s 2026 budget was initially approved with a tax levy increase for City Services totaling of 5.90 per cent compared to 2025. The 2026 budget forecast was updated through the 2025 budget confirmation process, and at that time, Guelph’s 2026 City services tax-supported budget increase was forecast at 4.51 per cent over 2025. The hospital levy of 0.21 per cent was reserve funded in both 2024 and 2025 and therefore the tax levy impact will be realized in 2026.

On April 1, 2025, Mayor Guthrie issued a Mayoral Direction asking staff to prepare a budget, for presentation to the Mayor, with a City services property tax impact of no more than 2.5 per cent, highlighting what must be removed to get to that target, and also outlining what would be added back to get to a 3.5 or the existing 4.5 per cent tax levy impact. 

Through the 2026 budget update process, City staff have: 

• Reviewed and updated base budget/inflationary pressures for changes that occurred since the 2026 forecast was developed.
• Reviewed all operating impacts from capital to identify savings opportunities.
• Reviewed growth and service enhancement investments included in the 2026 forecast in accordance with the budget prioritization criteria.
• Developed and presented the Mayor with options for consideration to reduce the tax levy through service reductions.
• Updated DC collection assumptions and made corresponding updates to the capital budget and the debt strategy to maintain a fully funded capital budget and forecast.

We invite you to visit the rest of the pages on the 2026 budget update website to dive into the details.