North Huron budget process begins
BY SCOTT STEPHENSON
North Huron Council began deliberations on the municipality’s 2026 budget on Dec. 12, marking the first budget process under the province’s new Strong Mayor Powers (SMP) legislation.
Under the new framework, responsibility for presenting the proposed budget rests with the head of council. Reeve Paul Heffer introduced the draft, known as the “Reeve’s Budget,” before turning the presentation over to Treasurer Annette Fletcher.
“I just want to thank staff for helping to put this budget together - a lot of time was spent on it,” Heffer said as the meeting began. “My neck was going back and forth trying to keep up with our treasurer, and I really appreciate all the work that she put into this, along with staff. It’s very, very much appreciated.”
Fletcher echoed those comments, emphasizing the collaborative nature of the process. “This really was a combined effort on account of Reeve Heffer, as well as all of [senior management team] and staff within the organization,” she said. “It truly was a combined effort, so I want to thank everybody for all of the time and energy that they spent putting this together.”
Fletcher began her presentation by outlining how property tax dollars would be allocated to day-to-day operations, capital investments and long-term financial stability. The proposal includes a 3.89 per cent municipal levy increase. Staff noted that a one per cent levy increase would generate approximately $77,423 in additional revenue.
She explained that municipal property taxes support three primary areas: general operations, capital purchases and reserve contributions. General operations include the daily costs of running township services such as roads, parks, recreation, fire services and administration, including wages, utilities, supplies and routine maintenance. Capital purchases cover long-term investments in assets such as roads, buildings, vehicles and equipment, while reserve contributions are intended to manage unforeseen costs, replace infrastructure and help stabilize tax rates over time.
Fletcher also pointed out that wages, salaries and benefits remain one of the largest components of the operating budget. For 2026, North Huron is proposing $6,616,288 for staffing costs, up from $6,470,299 in 2025 - an increase of $145,989. The increase reflects previously-approved pay band updates, a 1.7 per cent cost-of-living adjustment, the addition of a fully-funded contract position, benefit plan enhancements and a correction to the 2025 budget.
The township indicated that the 2025 correction can be offset by a one-time operational surplus, resulting in a revised net increase of $30,969. Some of the 2026 increases are also offset by one-time employee transition costs that were included in the 2025 budget.
On the revenue side, Fletcher noted several shifts in funding sources. “Historically, [Ontario Community Infrastructure Funding] and gas tax funding has gone primarily into reserves. In 2026, we’re targeting using those funds directly due to time restrictions and contributing more of our own funds into reserves,” she said.
She also pointed to increased government transfers. “We’re seeing an increase in government transfers, including support from Morris-Turnberry for recreation programs,” Fletcher said, adding that, “We’re seeing an increase in Ontario Municipal Partnership Fund funding, which helps offset operating costs.”
At the same time, investment income is expected to decline. “Investment income is estimated lower based on expected balances and interest rates,” she said.
On the expense side, Fletcher highlighted several notable changes. “Contracted services have gone down as we’re bringing some services in-house,” she said. She also noted that the township is nearing the end of its long-term debt obligations. “We have one set of long-term debt payments left at the beginning of 2026, after which the township will be debt-free,” Fletcher said.
Utilities costs have been adjusted downward, “to align with historical trends and anticipated energy efficiencies,” while, “waste management costs have gone down due to producer responsibility for recycling.” Police costs, however, remain a pressure point. “The OPP increase is confirmed at 11 per cent,” Fletcher said.
During council’s discussion, Councillor Mitch Wright asked how the OPP increase is determined. Chief Administrative Officer Nelson Santos responded that the budget is set provincially. “That budget is set by the ministry and allocated based on the number of properties,” he said. “We don’t have input into salaries or staffing.”
Capital spending is a major focus of the 2026 budget, with proposed capital expenditures increasing by $1,288,851 compared to the previous year. Total capital funding proposed for 2026 is $3,394,264. “For 2026, capital purchase requests have increased by nearly $1.3 million,” Fletcher said. “The majority of the increase is related to fleet replacement.”
She added that, “all priority one and priority two capital requests have been included,” but noted that fleet purchases are more difficult to fund externally. “Fleet purchases are more limited in terms of external funding, which increases the levy-funded portion,” she said.
Funding sources for capital projects include the municipal levy, reserves, proceeds from asset disposition, provincial grants, local government contributions, and allocations and carryforwards from the Ontario Community Infrastructure Fund and the Canada Community Building Fund. The township plans to use prior-year funding from these programs within the required timelines before relying more heavily on reserves or property tax increases.
In 2026, North Huron proposes using $743,499 in carryforward funding that may otherwise be at risk of repayment. Once these funds are spent, future funding will be limited to annual allocations.
Several significant projects are identified as future needs but are not included in the 2026 budget. These include arena facility upgrades, pool changeroom showers at the North Huron Wescast Community Complex, arena signage, a digital sign at the Blyth and District Community Centre, fleet and equipment purchases, a replacement fire truck and multiple road projects. The total estimated cost of these unfunded projects is $2.539 million. “Some projects are not included this year as we explore alternative funding and grants,” Fletcher said, adding that staff will continue to pursue senior government funding opportunities.
The budget also outlines departmental capital changes across environmental services, waste management, general government, administration, fire protection, recreation and cultural services and transportation. Some funding previously directed to reserves has been reallocated to cover in-year capital purchases. Other notes indicate that surplus from theatre operations will be set aside to offset future operating deficits, while any audited in-year surpluses are intended to support the township’s Asset Management Plan.
Councillor Chris Palmer concluded the discussion with a comment. “This was one of the best-presented budgets I’ve ever seen,” he declared. Council is expected to continue its review of the draft 2026 budget in the coming weeks.