London Budget 2026: Councillors shave tax increase to 3.4%, extend free core parking and back paying off health unit loan

Final budget deliberations continue at London City Council with ratepayers looking at a 3.4 per cent property tax increase. Daryl Newcombe reports.

A long day of deliberating at City Hall saw the Budget Committee recommend changes to the Mayor’s 2026 Draft Budget that maintained some services and still trimmed the tax rate increase from 3.6 per cent to 3.4 per cent.

An amendment pitched by Coun. Susan Stevenson had the most significant financial impact.

Although $4.8 million was previously collected from taxpayers to cover Development Charge exemptions, ultimately the funding will not be needed following a clarification from the provincial government.

Stevenson initially pitched using all of the funding for tax mitigation this year, but the committee chose to divide the funds over 2026 and 2027, delaying a financial hole to fill when the one-time money expires until the next multi-year budget in 2028.

“I’m comfortable with returning some of this money, if not all, to the taxpayer as it was incorrectly collected,” said Coun. Skylar Franke. “For me, development charges are supposed to be paid by developers.”

However, Coun. David Ferreira worried about “kicking the can down the road.”

“We don’t want to rob Peter to pay Paul, but here we are robbing Peter two years from now to pay Peter today,” Ferreira argued.

By a vote of 12 to three (Ferreira, Trosow, and Hopkins opposed), the 0.3 per cent of tax relief was supported by the committee.

Although not in his original budget, Mayor Josh Morgan voted to support the additional tax mitigation, “I think reallocating that towards the tax reduction (is) simply returning the money that we collected for a purpose that we’re not going to use it for.”

Meanwhile, Ferreira pitched permanently extending free street parking in the Downtown, Midtown and the Old East Village from the current one hour to two hours.

The incentive requires the use of the Honk Mobile App.

Ferreira argued the extension would encourage people to spend longer in core area business districts, “Someone who is coming for an appointment, one hour is not enough (and) someone coming for a lunch, one hour’s too tight.”

But Franke argued there are better ways to get more people downtown by supporting London Transit and active transportation, “We’re taking taxpayer dollars from everyone across London, but folks who don’t have a car or don’t drive do not benefit.”

“If we want people to come and spend some time (in core business districts), I think we got to let them park their vehicle for more than an hour,” Deputy Mayor Shawn Lewis stated.

The Budget Committee voted in favour of the free parking extension at an annual cost of $784,000 to taxpayers.

Some smaller amendments to the mayor’s budget included re-instating $114,000 to maintain the current funding level for Road Network Improvements and not reducing the frequency of Annual Resident Satisfaction Surveys to every-other year ($28,000).

In response to the province’s decision to discontinue photo radar, the committee recommended using funds from the Automated Traffic Enforcement Reserve account to coordinate the installation of traffic calming in school zones and in neighbourhoods experiencing temporary cut-thru traffic due to road construction.

The day’s longest debate did not result in a change to the mayor’s draft budget, but did spark some of the sharpest criticism of the provincial government.

Stevenson and Franke opposed using property taxes to pay off the Middlesex-London Health Unit’s $2.4 million dollar loan (related to its 2020 move to Citi Plaza) in order to free up operating dollars to support public health initiatives.

They preferred continuing to use the cost-shared annual operating budget over the next 10 years, and separately funding the hiring of two additional full-time employees.

“There’s cheaper ways to do this than paying $2.4 million on a loan that the province is responsible for 75 per cent of,” she argued.

Coun. Elizabeth Peloza acknowledged the frustration expressed by committee members, “Nobody likes backfilling somebody else’s bill. The province has been a very bad partner.”

Begrudgingly, the committee supported the business case included in the mayor’s budget to immediately pay off the loan.

“Paying the provincial bill sucks. They should be paying it themselves, plain and simple. But they haven’t,” added Lewis.

By the end of the Budget Committee’s deliberations, the proposed tax rate increase was reduced from 3.6 per cent to 3.4 per cent.

The increase would represent about $130 dollars more next year on the average property tax bill.

The recommendations supported by the Budget Committee will go to a Council Meeting on Nov. 26 for final approval.

Then the mayor will have the option to veto any changes, and only a two-thirds majority of council can overrule his veto.

However, Morgan signalled that it is unlikely he will veto the changes as proposed.

“I supported most of the decisions today and I’ve not vetoed in the past,” he said after the meeting.

“So I think people can anticipate that’s where I’m headed. Obviously, I’m going to reserve the right given council hasn’t made its final decision.”