This is my third post on the 2026 budget. If you want the full context, the first two are here:
https://www.duncancavens.ca/posts/2026-initial-budget-thoughts/
https://www.duncancavens.ca/posts/2026-budget-capital-budget/
As always, these comments are my own. They are based on publicly available information and do not reflect the views of other councillors. I am doing some simple analysis here, and any errors are mine.
When staff first presented the draft budget, which included a 13 percent tax increase, my reaction was the same as many residents’. Thirteen percent is a lot. Coming after several large increases in recent years, it is completely understandable that people are alarmed. I am alarmed too.
To be clear, Council is still working through the 2026 budget, and the final tax increase is very unlikely to be 13 percent. But as I worked through the operating budget, I kept coming back to a simple question: where is the increase actually coming from?
Once you dig into the numbers, it becomes clear that most of the growth is coming from three areas: Police, Fire, and transfers to capital reserves. Those reserve transfers fund the long-term maintenance and replacement of assets like roads, pipes, and recreation facilities.
Outside of those areas, the rest of municipal operations, things like planning, administration, parks and recreation, garbage collection, and routine street maintenance, are increasing by about 3.1 percent year over year. When Police, Fire, and capital reserve transfers are included, the increase in operating spending rises to about 8.3 percent.
One long-standing challenge in Esquimalt has been how hard it is to see this clearly. For a long time, much of the budget detail was buried in presentations or embedded in financial statements written for accounting professionals. Until recently, the public budget documentation did not include departmental budgets in any meaningful way.
In 2024, I brought forward a motion asking staff to improve our budget documentation, and Council supported that direction. The goal was to make it easier for both Council and the public to understand what is driving the budget. Other municipalities like Colwood and Oak Bay do a good job of presenting complex budgets in accessible ways. We are not there yet, but it is improving.
The 2025 Budget book is available here: https://www.esquimalt.ca/media/file/budget-book-2025
The 2026 DRAFT Budget book is available here: https://www.esquimalt.ca/sites/default/files/2026-01/2026-budget-book.pdf
The 2025 and 2026 budget books give us far more information than we had before, especially when you look at them side by side. The current budget book does not make that comparison easy, so I have pulled the numbers together in the table below.
Note that for some of the smaller departments, small moves can give misleading percentages in this table (for instance an emergency management staff member is moving from Strategic Initiatives to Fire which skews the numbers somewhat). However the big picture still stands: Given the rising cost of almost everything, including likely wage increases as the Township negotiates a new collective agreement, a 3.1 percent increase in core operating spending is not unreasonable, although Council is still trying to bring that number down.
The challenge is that much of the operating budget is non-discretionary. At this point, we are scrutinizing spending in very small increments.
The list of potential reductions staff brought forward on February 9 illustrates this well.
https://esquimalt.ca.legistar.com/View.ashx?M=F&ID=67987&GUID=59631A9E-5762-43E1-AB2E-1F6FA5DB9907
When you are looking at cuts of $5,000 in a roughly $50 million operating budget, you are trying hard to find savings wherever you can. Some of the items discussed, such as crossing guards (which the province used to fund), grants to local non-profits, or reduced hours at the recreation centre, are things residents and Council value. Even then, the financial impact is very small. For example, reducing hours at the rec centre would lower a proposed 13 percent tax increase to about 12.82 percent, roughly a $10 reduction for the average household.
Police is one of the largest drivers in the operating budget. It is our single largest line item and is also seeing a proposed increase above the overall average. There is a long history here. Since the forced amalgamation in 2003, Esquimalt has borne a disproportionate share of the cost of policing the downtown core. Successive councils, and particularly our current Mayor, have raised this issue repeatedly, including through appeals to the province. In my view, the only real long-term financial solution is regional policing, but that is not a short-term fix.
Fire is the next major driver. The draft budget shows Fire increasing by 16.4 percent from 2025 to 2026. A small portion of that reflects the transfer of Emergency Operations staff into the Fire Department, but the majority relates to increasing suppression staffing from five to six firefighters per shift. Council agreed to this direction last year following a report from the Fire Chief on safety requirements and regional standards. The report and its attachments are available here.
Staff are also recommending a new Fire Inspector position in response to changes to the Fire Act, which require more frequent and thorough inspections, including follow-up inspections where issues are identified. While these requirements are sensible, they are another example of provincial legislation increasing municipal responsibilities without providing additional resources. One option is for Council to postpone the new Fire Inspector position, while we look at options for how best to staff and fund this- but any postponement will only be able to reduce the spending for this year- eventually we will have to bring our practice into line with provincial requirements.
The final major driver is transfers to capital reserves. The draft budget increases these transfers by about $1.2 million from 2025 to 2026, from roughly $4.8 million to $6 million. As I outlined in an earlier post, staff reports show that Esquimalt has not historically set aside enough to cover routine maintenance. Even this increase only gets us part of the way toward keeping up with ongoing needs, let alone future service expansions or major facility replacements.
https://www.duncancavens.ca/posts/2026-budget-capital-budget/
A reasonable question at this point is how an 8.3 percent increase in operating spending turns into a proposed 13 percent tax increase. The answer lies on the other side of the budget, the revenue side, which I will walk through in the next post.