Extreme weather leaves mark on 2025 books in Kawartha Lakes, but no tax hike planned

DARRYL KNIGHT, Local Journalism Initiative Reporter for The Standard

KAWARTHA LAKES: 2025 was a year defined by extremes, and a financial balancing act few municipalities ever face.

A report, presented at the Tuesday, April 21st council meeting, detailed how a series of severe weather events and economic pressures pushed the municipality toward a potential $44 million deficit in 2025. In the end, staff outlined a plan to absorb the hit through reserves, rather than passing the cost directly onto taxpayers.

“This was an unprecedented year,” said Jessica Hood, Supervisor of Budget and Financial Planning, in the report. “The combination of extreme weather events, inflationary pressures, and operational demands created significant financial strain across all departments.”

The largest single impact came from the March ice storm, which cost roughly $29 million. Provincial support covered the bulk of that, about $25.6 million, but the event still left the municipality with millions in net costs and disrupted cash flow.

Other pressures added up quickly: $5.5 million tied to extreme winter conditions and record snowfall; $2 million from August forest fires; $5.6 million in wage-related pressures, including a union compensation review; $1.1 million shortfall in supplemental tax revenue, due to slower housing development and $1.1 million drop in investment income.

Altogether, the municipality ended the year with an $18.4 million operating deficit, about seven percent of its $271 million budget.

Despite the financial strain, council stopped short of adding the full burden to property taxes.

Instead, the deficit will be covered through a series of reserve transfers, totalling about $16.9 million, leaving reserve balances at roughly $30 million.

“There was an option to levy the entire deficit,” Ms. Hood noted, “but that would have resulted in an approximate 11 percent increase.” This was a move staff did not recommend.

Still, some targeted impacts will appear on final tax bills, such as: rural properties, under OPP policing, will see a $921,000 levy, tied to provincial cost reconciliation, and Lindsay Transit users will see a $605,000 levy, reflecting higher service costs and lower-than-expected revenue growth

Not all financial news was negative:

The municipality recorded a $528,000 surplus, in water and wastewater operations, as well as a $609,000 surplus from the Kawartha Lakes Haliburton Housing Corporation

Those funds will be reinvested into reserves and shared with municipal partners.

The report emphasizes reserves, often criticized in quieter years, proved critical in 2025.

“The City has prioritized building reserve balances, to provide adaptability and flexibility in years of financial pressures,” Ms. Hood stated, in her report, pointing directly to increasingly unpredictable weather.

An updated long-term financial plan, expected later this year, will focus on strengthening those reserves further, particularly for disaster response.

Reaction from residents has been mixed, with many acknowledging the difficult circumstances but expressing concern about long-term sustainability.

“I’m glad they didn’t just dump this on taxpayers all at once,” said Lindsay resident Margaret Stevens, after the meeting. “But you have to wonder, if we get another year like this, what happens then?”

Others pointed to the targeted levies as a growing concern.

“It still ends up on our bill, one way or another,” said, rural property owner, Chris Jones. “The OPP costs keep going up, and it feels like we’re the ones carrying it.”

At the same time, some residents praised the decision to rely on reserves.

“That’s what reserves are for,” said, Fenelon Falls resident, Jason Clarke. “You plan for bad years, and this was definitely one.”

With climate-related events becoming more frequent and costly, council’s challenge now shifts from managing a single difficult year to preparing for a future where such pressures may become the norm.

As Councillor Mike Perry noted, during discussion, “This isn’t just about closing the books on 2025, it’s about making sure we’re ready for whatever comes next.”