Part 1: PEC Council Finalizes 2025 Budget After Debate Over Long-Term Care Tax Levy Part 2 - 12/06/2024

Prince Edward County Council returned to one of the most significant and closely watched discussions of the year: final deliberations and approval of the 2025 municipal budget. By this stage, councillors and staff had already spent many hours reviewing operating costs, capital projects, infrastructure spending, and tax impacts. The atmosphere in the chamber reflected both exhaustion and urgency, as council worked to bring weeks of budget debate to a final conclusion.

Much of the meeting focused on how to fund long-term debt associated with the County’s long-term care rebuild project. While councillors broadly acknowledged the importance of the project, there was sharp disagreement over how much of the financial burden residents should absorb through future tax increases.

The discussion ultimately became one of the defining moments of the County’s 2025 budget process, with councillors debating affordability, long-term financial planning, and how to communicate tax impacts clearly to residents already dealing with rising living costs.

© PEC Council (YouTube)

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Long-Term Care Debt Becomes the Central Issue

At the center of the debate was a proposed levy increase intended to help service debt tied to the County’s long-term care rebuild. The original budget proposal included a dedicated 2 percent levy increase that would continue over multiple years to gradually fund debt repayments connected to the project.

Council members acknowledged that the long-term care rebuild is a major infrastructure responsibility and an important community investment. However, concern quickly shifted toward the affordability of the levy itself and the long-term financial impact on taxpayers.

Several councillors questioned whether residents could realistically absorb another substantial increase during a period already marked by inflation, rising utility costs, housing pressures, and broader economic uncertainty.

Others argued that reducing the levy too aggressively could create larger financial problems later by delaying debt repayment or increasing pressure on future budgets.

Debate Intensifies Over 2 Percent Versus 1 Percent

A large portion of the meeting focused on whether the proposed long-term care levy should remain at 2 percent or be reduced to 1 percent. The discussion became highly detailed as councillors attempted to balance fiscal responsibility with taxpayer affordability.

One of the most important clarifications made during the debate involved how the levy would actually function over time. Staff explained that the increase would be a flat 2 percent annually rather than a compounding increase, and that it would remain in place for approximately 25 years to fully service the long-term care debt.

This explanation became particularly important because confusion emerged after the livestream temporarily dropped during part of the discussion, forcing staff and councillors to restate portions of the financial explanation for viewers and members of the public following along remotely.

The clarification helped some councillors better understand the long-term structure of the proposed levy, although disagreement remained over whether the amount itself was reasonable.

Amendment Introduced to Reduce the Levy

As debate continued, councillors introduced an amending motion seeking to reduce the proposed levy from 2 percent down to 1 percent. Council agreed to deal with the amendment separately before returning to the broader budget motion.

The amendment quickly became the focal point of the meeting, as councillors debated the long-term consequences of lowering the levy. Supporters of the reduction argued that even a one-percent difference matters significantly for households already facing rising costs. They also stressed concerns about setting expectations for future tax increases and maintaining affordability for fixed-income residents.

Those supporting the original 2 percent proposal argued that delaying or reducing funding could place greater financial strain on future councils and taxpayers. Some councillors also raised concerns about whether lower annual contributions would ultimately extend financial pressures further into the future.

The debate reflected the broader challenge facing many municipalities across Ontario: balancing major infrastructure and healthcare-related obligations while trying to limit property tax increases.

Recorded Vote Reveals Deep Division Within Council

Given the significance of the issue, councillors requested a recorded vote on the amendment. The vote demonstrated that council was sharply divided over how aggressively to fund the long-term care debt.

In the end, the amendment passed, meaning the levy increase would move forward at 1 percent rather than the originally proposed 2 percent. That decision immediately changed several overall budget calculations and forced staff to revise final tax impact figures before the budget could proceed to approval.

The vote represented one of the most important financial decisions of the meeting because it directly affected how the County plans to manage long-term debt obligations over the coming decades.

Updated Tax Figures Presented to Council

Following approval of the amendment, finance staff recalculated the overall tax impacts associated with the revised budget.

Council was informed that removing a previously proposed $25,000 communications consultant expense while adding the revised 1 percent long-term care levy resulted in a 6.43 percent tax increase before assessment growth and a 3.79 percent increase after growth.

Councillors then spent time discussing how best to communicate those figures publicly. Several members argued that the after-growth figure of 3.79 percent would likely be the most meaningful number for taxpayers because it reflects assessment growth and aligns with how many municipalities present annual budget impacts.

The discussion highlighted ongoing challenges municipalities face when attempting to explain complex budget calculations to residents in a clear and understandable way.

Council Approves Operating and Capital Budgets

Once the levy debate concluded, council moved through several remaining procedural and financial motions connected to the overall budget package.

These included approvals tied to disclosures of pecuniary interest, advertising expenditures, the short-term accommodation budget, and various operating items required to finalize the broader municipal budget framework.

Council then formally approved the full 2025 budget package, including rate-supported operating budgets, tax-supported operating budgets, and capital spending plans. The final package included tens of millions of dollars in capital infrastructure investments along with a total tax-supported operating budget exceeding $81 million. Council also confirmed that any excess infrastructure capacity created through future projects would be funded through development charges paid by future growth rather than existing taxpayers.

Finance Department Receives Strong Public Support

Toward the end of the meeting, several councillors spoke strongly in defense of the County’s finance department following criticism that had emerged earlier during the broader budget process.

Council members emphasized that the budget had gone through extensive review, auditing, and public scrutiny before reaching final approval. Multiple councillors praised staff for managing a difficult and politically sensitive budget process under significant public pressure.

The mayor delivered one of the most emotional comments of the meeting, stating that criticism directed at finance staff during previous budget discussions had been unfair and inappropriate. The mayor publicly reaffirmed confidence in the finance team and thanked staff for their professionalism throughout the lengthy process. The comments appeared intended to bring the budget process to a more supportive and unified conclusion after weeks of difficult financial debate.

Meeting Officially Concludes the 2025 Budget Process

The meeting ended shortly after 4:24 p.m., officially bringing Prince Edward County’s 2025 budget approval process to a close.

After months of financial planning, public discussion, amendments, and debate, council finalized a budget that attempts to balance infrastructure demands, long-term care obligations, and taxpayer affordability during a period of continued economic pressure and municipal growth challenges.

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Disclaimer: This article is based on a meeting with an approximate duration of 21:010. Due to the length of the meeting, our team was not able to independently review the full recording in its entirety. As a result, we relied on software-generated transcription, automated summarization, and automated recognition of speakers and participants, which may not be entirely accurate. All transcriptions, summaries, and related content are prepared by our team in good faith and on a reasonable best-efforts basis. The content is provided for general informational purposes only and is intended to support public understanding of the topics discussed. While reasonable efforts have been made to present the information accurately, automated processes may result in errors, omissions, or unintended misinterpretations. This article does not constitute an official, certified, or verbatim record of the meeting, and it should not be relied upon as such. Readers are encouraged to consult original source materials, official minutes, or recordings where available for confirmation or clarification. Questions, requests for clarification, or suggested corrections may be submitted to hello@pecconnect.ca for review and consideration.