London budget: The journey to a 7.3% tax hike, and a dire warning for 2026

It’s official, property taxes will increase in the new year by more than seven per cent — marginally lower than what was forecast in late October to help fund London’s $1.4-billion budget. Reporter Jack Moulton breaks down how we arrived here and what’s next.

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WHAT’S THE HIT TO THE WALLET?

The property tax increase for 2025 is set at 7.3 per cent, down from 7.4 per cent at the start of deliberations and down from the 8.7 per cent forecast during 2024-27 budget talks in February.

The hike means an extra $263 on the property tax bill for the “average” London home, with “average” being an assessed value of $252,000. Water and sewer rate increases in 2025 will result in an extra $8 and $38 respectively for average household consumption.

Mayor Josh Morgan reaffirmed Wednesday he will not veto any changes from council’s budget talks.

The budget will be updated again in 2026 and 2027; property tax increases for those years were set at 6.4 per cent and 6.8 per cent respectively.

WHAT’S INCLUDED IN THE 2025 BUDGET?

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Included from the get-go in Morgan’s budget was the inclusion of the recently approved “renoviction” by lawexpected to cost $894,000 a year, and to take effect in the spring.

After the previous week’s budget meetings, it is confirmed Ark Aid Street Mission will receive more than $1.1 million from city reserves and surpluses to keep 90 shelter beds for the city’s homeless open, while the city ​​awaits the arrival of recently announced federal funding.

Using city dollars and a new provincial contribution, funding will also be restored to a hoarding and extreme clean program, aimed at helping vulnerable tenants with hoarding and pest control.

Using reserve funds, the city will also provide $600,000 during two years to the downtown business district to improve street cleaning and graffiti removal, and the hiring of seven permanent parks staff at a cost of $808,000, including benefits.

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WHAT’S NOT?

To help bring the tax hike down, council opted to pause $250,000 in annual funding to the popular neighborhood decision-making program, and to slash $500,000 in community grants for capital projects either in half or fully, depending on the level of the reserve fund from which it would draw.

Politicians also voted against a $700,000 a year expansion to the housing stability bank that offers low-income Londoners financial support to pay rent and utilities.

Another effort to steer funding away from the four-year, $672-million budget for the London police failed to gain traction. During Wednesday’s meeting, Coun. Skylar Franke touched on that failed attempt as politicians spoke on the importance of lowering the tax hike.

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“If we want to find savings, we could have supported a reduction in our biggest cost driver, but we didn’t,” she said, referring to the police budget adding five percentage points to the 2024 8.7 per cent tax hike, and two percentage points of the 2025 7.3 per cent increase.

MAYOR’S FINAL THOUGHTS

Talking to reporters following the meeting, Morgan said council brought in services “in critical areas” at no extra cost to taxpayers, and that’s why he didn’t wish to veto any changes to his budget.

Addressing the cumulative effect of increasing taxes by more than $200 for every $100,000 in assessed value during two years, Morgan said he shares the frustration of taxpayers.

“We collect nine cents on every tax dollar, and yet we’re responsible for over 60 per cent of the infrastructure in this country,” he said. “Municipalities cannot continue to have tax increases of this level across the country.”

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To bring future tax hikes down further, council will have to have “a significant discussion” about the services provided in the city next year, Morgan said.

“I think we’ve got to the point where we’ve made the critical investments we can. There is no other significant place to look for savings,” he said.

LONDON VS PEER CITIES

Anticipated tax hikes for 2025 as of Nov. 27:

London: 7.3 per cent

Windsor: 6.04 per cent (forecast)

Hamilton: 6.9 per cent (forecast)

Guelph: 6.08 per cent (forecast)

Chatham-Kent: 4.99 per cent (approved)

Brantford: 5.28 per cent (forecast)

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