Budget and Finances

The Operating Budget consists of the City services categorized in functions including a description, three year budget and actuals by major account categories, full-time equivalent, revenue and expense variance explanations, and sub services within the function. The Operating Budget Summary provides the total Tax Levy required and the corresponding Tax Levy Impact as a percentage of prior years’ Budgeted Tax Levy.

The 2024 operating budget has total operating expenditures of $42.04 million including capital expenditures (tax supported amount), reserve appropriations and debt payments.  The summary highlights budget decisions and provides explanations for the changes from the 2023 Adopted Budget to the 2024 Budget.

The City will require $31.032 million through general Tax Levy, the Tax Levy is the City’s most significant funding source, representing 73.8% of combined operating revenues. The Provincial operating grant is $3.028 million.

View the Operating Budget starting on page 11 of the 2024 Adopted Budget report.

The Capital Budget includes summary listing by function and the capital project detail. 

The City of Kenora Capital Budget consists of a 2024 investment of $17.695 million and 5 year plan of $63.957 million, including Solid Waste and Water and Sewer. The Net Tax Levy allocation to capital is $0.907 million.

Reserves are utilized to stabilize and fund annual capital expenditures, the City has established a number of reserves and reserve funds for specific purposes. 

View the Capital Budget starting on page 33 of the 2024 Adopted Budget report.

The City budget includes the functional costs with the external organizations representing the largest portion followed by Transportation and Recreation.

External organizations are:

• Ontario Provincial Police
• Northwestern Health Unit
• Kenora District Services Board
• District of Kenora Home for the Aged

There are transfers to other external organizations, Kenora Handi‐Transit, Kenora Public Library, and The Muse (Lake of the Woods Museum and Douglas Family Arts Centre). The budget allocations are at the discretion of the City of Kenora.  

View the Net Program Cost and External Organizations on page 12 of the 2024 Adopted Budget report.

Water and Sewer and Solid Waste utility operations do not form part of the overall City budgets, although they have been included with City operating and capital budget. The Utility operations are independent and self‐supported through user fees and do not impact the tax levy.

View the Utility Budgets starting on page 41 of the 2024 Adopted Budget report.

The total approved operating expenditure budget for 2025 is $46,894,722. This budget funds the City's programs and services, maintains and improves infrastructure, and covers uncontrollable costs such as insurance, fuel, utility rates, and provincially and federally mandated fees to essential external organizations. The City Council and Administration prioritize maintaining existing services while addressing future needs, ensuring residents have access to resources for a safe and connected community.

The 2025 budget is centered on maintaining existing levels of service and programs, as well as preserving essential infrastructure. Our primary aim is to ensure that residents have access to resources that promote a safe, healthy, and connected community. We are committed to sustaining the services and programs vital to our community while also addressing the needs of future generations. The budget outlines how the City will fund these essential services and manage over $1.2 billion in critical infrastructure.

The 2025 budget prioritizes key investments in the core services and infrastructure that our community relies on, ensuring we maintain existing services while addressing future needs. Our goal is to provide residents with resources that promote a safe, healthy, and connected community. We are pleased to announce a substantial capital investment of $11,422,300 for 2025, focused on enhancing our infrastructure and services. Here are some key projects that will have a significant impact:

• Road Paving: We’re allocating $3,085,000 for paving municipal and arterial roads, which includes upgrades to Ninth Street North (from Twelfth Avenue North to Thirteenth Avenue North) in 2025 and Highway 17 (from the Winnipeg River East Bridge to the west for 470 m) in 2026.
• Rural Road Enhancements: An investment of $576,000 to improve both hard surface and loose top roads, ensuring better connectivity for residents.
• Water and Wastewater Program: With a budget of $2,991,000, we’re enhancing vital water and wastewater services, including critical upgrades to Ninth Street North (Mellick Avenue to Scramble Avenue) and Mellick Avenue (from Ninth Street North to Tenth Street North).
• Water Treatment Plant Upgrades: We're investing $900,000 in pump replacements and upgrades as part of a comprehensive multi-year project valued at $3,600,000 to ensure clean and safe water for our community.
• Library Improvements: We're excited to support the Keewatin Public Library with an estimated $500,000 roof replacement, funded through City Reserves.
•  Support for Animal Shelters: In 2025, we are pleased to provide a $3,000 grant to support our local shelters.
• Enhanced IT Capabilities: Adding a new General Manager of Information Technology position, enhancing the City’s IT capabilities and cyber security, with an investment of $161,306.
• Fire Vehicle Replacement Program: Introducing a fire vehicle replacement program with an investment of $77,581, enhancing our emergency response capabilities.

The City is committed to investing in our community through a 10-Year Capital Investment Plan exceeding $200 million, which encompasses essential utilities and infrastructure improvements.

Notable future projects include:

• Water and Wastewater Redundancy: Planned for 2029, this project will enhance our infrastructure with a $19,000,000 investment, ensuring reliability in our water and wastewater services.
• Water and Wastewater Treatment Plant Upgrades: We will invest a total of $25,700,000 in essential upgrades to our Water Treatment Plant, commissioned in 1980, and the Wastewater Treatment Plant, commissioned in 1979 and currently 46 years old.

The 2025 budget includes a 8.12% property tax increase, including:

• 3.57% to cover fees to essential external organizations, such as Ontario Provincial Police, Kenora District Services Board, and the Northwestern Health Unit (will cost an average of $125 per household per year), 
• 3.39% to cover operating costs, such as recreation programming, snow clearing, road maintenance, and Fire and Emergency Services, (will cost an average of $119 per household per year), and
• 1.16% to improve and maintain municipal infrastructure, such as road paving and enhancements, municipal paving, road resurfacing, fleet replacement , (will cost an average of $41 per household per year).

Note: These costs per household examples are based on median property tax bill of $3,500.

In preparing the 2025 budgets, we faced several challenges, including:

• Increased fees to essential external organizations, for which the City is mandated by federal and provincial regulations
• Uncontrollable costs related to insurance, fuel, utility rates, and repairs for fleet vehicles and equipment
• Municipalities face significant challenges in funding capital projects due to limited revenue sources and increasing demand for services.
• Ontario municipalities are still using 2016 property values for taxes because property reassessments were delayed during COVID-19. Since 2022, municipalities and others in the business community have called for regular assessments to ensure fair tax distribution based on current values.
• Inflationary pressures
• Geopolitical instability

It's important to note that Kenora is not alone in facing these challenges. Municipalities everywhere are grappling with increasingly complex issues, such as homelessness, climate change, uncontrollable costs, inflation, rising interest rates, and labour shortages, while lacking an increase to revenue sources to effectively address them. 

City Administration and Council have dedicated significant effort to lessen the financial impact on taxpayers. We recognize the challenges residents are facing post-pandemic, compounded by rising inflation and living costs. To address these issues, we have focused on identifying cost-saving measures and exploring alternative funding sources, aiming to minimize the impact on the residential tax rate while ensuring future sustainability.

In total, the City successfully secured $5,822,321 to put towards the Capital and Operating Budgets, helping to reduce the operating budget from what was initially presented in the draft stages in October 2024.

Notable funding sources include:

• Obtaining an Ontario Provincial Police (OPP) rebate of $1,721,378
• Secured an extension of the City’s Recycling Contract totalling $444,278
• Increased Citizen Prosperity Trust Fund Dividend by $150,000
• Debt refinancing savings of $61,336
• Canada Community-Building Funded projects totalling $1,275,000
• Ontario Community Infrastructure Funded projects totalling $1,975,000
• Investing in Canada Infrastructure Program funded projects totalling $195,329

Municipalities primarily generate revenue through property taxes and by applying for provincial and federal grants. Additionally, they raise funds through various means, including user fees (such as water bills), and licenses and permits.

Provincial and federal grants play a crucial role in financing capital projects. These collaborations enhance municipalities' ability to undertake significant infrastructure improvements.

It's important to note that securing these funding initiatives requires substantial administrative effort, and their availability can vary from year to year.

As of 2025, municipalities in Ontario are still using property assessments from January 1, 2016, for tax calculations, with no indication from the province on when a new assessment will take place. Property assessments for the 2025 property tax year will continue to be based on fully phased-in January 1, 2016 current values (Municipal Property Assessment Corporation).

This delay, worsened by COVID-19, impacts economic competitiveness and creates uncertainty for both businesses and residents concerning future tax liabilities. Additionally, it limits the potential revenue that could be generated from a current and accurate assessment, which is essential for municipalities to fund the maintenance and improvement of infrastructure, services, and programs.

Between 2016 and the present day, Canada’s other nine provinces will have reassessed property values more than six times on average, emphasizing the need for Ontario to return to a regular assessment cycle to ensure fairness and equity in the taxation system (Association of Municipalities of Ontario).

Ongoing uncertainty around infrastructure funding, coupled with evolving municipal responsibilities and rising costs, threaten municipalities' ability to make informed long-term budget decisions. As municipalities begin their annual budget planning, these factors significantly impact their financial outlook and service delivery capabilities.

Recent economic instability unprecedented inflation put pressures on municipal budget, just like homeowners (e.g. increase in vehicle, building materials) not immune to those increasing, managing those best we can.  responding as best we can to external and internal pressures. Those pressures felt by residents are also felt by the City of Kenora.