‘An important step:’ Region approves 5 per cent cap on 2026 tax increases

Region of Waterloo council is looking to get a step ahead of 2026 budget talks, officially approving a 5 per cent cap on next year’s tax levy increases.

It all comes after a lengthy and divisive 2025 budget season for the region. The budget took weeks to finally be approved and, ultimately, sat at nearly 10 per cent.

“I think some of us certainly would still hope that we can get a budget in, especially after the last couple of years, that’s closer to the rate of inflation,” said Councillor and Kitchener Mayor Berry Vrbanovic. “But, compared to where we’ve been, this is certainly an important step. Then, if there’s any further dialogue, that’s something that’ll happen at budget time.”

Prior to the approval, an amendment was introduced, clarifying certain details of the motion brought forward that introduced the 5 per cent cap.

Namely, it specified that the cap would only apply to regional services, meaning other aspects, such as the Waterloo Regional Police Service budget, would not be included.

The motion was not without discussion, though, with some councillors pointing to the 2025 budget, along with current economic times, saying instituting a cap may cost the region in other areas.

“In our last budget, we found that there were things that we needed to include with the state of the community, homelessness, etc.,” said Councillor Pam Wolf. “Until we get a provincial government that’s going to step up to help us meet those needs, we may find ourselves in that position again.”

The new cap means the region will need to focus on overall efficiency, with staff now working to put a plan in place to figure out exactly where it can trim some corners, while still meeting the needs of the region.

Full clip from Kitchener Mayor Berry Vrbanovic on the newly approved 5 per cent tax levy cap for the 2026 budget.

“We’re going to develop a robust prioritization process to identify where we can maintain vital services, where we’re going to find efficiencies, and then from that, we’ll demonstrate how we feel we can achieve being under 5 per cent,” Wayne Steffler, Chief Financial Officer with the Region of Waterloo, said.

With it all being centred around those regional services and regional property taxes, it’s a reminder that these discussions will have no impact on city and municipal taxes for 2026.

With the change officially seeing a unanimous approval from council, being pushed over from a 12-2 vote of approval from the region’s administration and finance committee, staff can now begin to look ahead to the 2026 budget discussions.

Those talks are set to get underway late this year.