Hamilton City Council is meeting today to begin deliberations on Mayor Andrea Horwath’s proposed 2026 City budget.
Mayor Horwath released her election year budget on Tuesday, with a proposed operating budget increase of approximately $60-million. Mayor Horwath proposes to continue using the City’s emergency reserve funds, proposals to increase fines and user fees, and other accounting methods to lower the 2026 tax levy increase to 4.25 per cent.
If passed as submitted, Mayor Horwath’s budget will create severe pressures for the 2027 City budget due to the loss of reserve funds combined with the operating costs of 58 new staff positions to be hired later in 2026.
While unveiling her budget on Tuesday, Horwath stated that she directed the City of Hamilton’s senior management to conduct a line-by-line review of the City’s organizational structure, staffing, and every line item of spending.
Horwath declined to answer questions regarding any specifics of the budget. Asked what changes resulted from public feedback on the budget, Horwath declined to answer. Asked to share specific savings found in the line-by-line review, she declined to answer.
Following a review of the over 9,449 positions at the City, the Mayor and senior staff have informed Council that eight positions planned for the 2026 budget are no longer necessary. The City will add 58.10 full-time equivalent positions in 2026.
State of City finances is unknown
The City’s General Manager of Finance & Corporate Services Mike Zegarac states the City’s February 2024 cybersecurity failure has resulted in the City not being able to provide any audited, or unaudited, financial status updates for the past two years.
Zegarac has repeatedly told councillors who ask for the current state of City finances that statements are not available.
Hamilton is the only single-tier municipality in Ontario that has failed to file its required Municipal Act financial information returns for 2023 and 2024.
Using the Future Fund, Municipal Accommodation Tax, and reserves to lower election year tax increase
The budget will use the last of the City’s discretionary operating reserves to delay tax increases until 2027. Over $35-million will be taken from reserves and applied to the operating budget.
An additional $1-million will be taken from the Municipal Accommodation Tax fund to be used for spending traditionally booked against the operating budget.
The City further delay repayment of funds interally borrowed from the City’s “Future Fund” reserve account. The delay in repayment represents a $1.3-million budget decrease. The delayed payment will be transferred to the 2027 budget.
City staff will be directed to increase parking enforcement, with a goal of generating an additional $734,000 in revenue.
Councillors can amend the budget
Under the newer Municipal Act budget process, members of Council must move amendments if they wish to change the Mayor’s budget.
There is a two-stage process for amending the budget. First, Council votes on amendments using a simple majority pass method. Following this round of meetings, the budget as amended will be sent to Mayor Andrea Horwath for review.
Mayor Horwath can veto amendments.
If the Mayor vetoes any amendment, Council can meet to override the veto. Under the Municipal Act’s Strong Mayor budget process, Council must obtain a two-thirds majority vote to override a mayoral veto.
Being an election year, the process will occur with the looming election in mind.
Timelines
Mayor Horwath officially tabled her budget on January 20. Council has up to 30 days to consider the budget, and pass amendments.
Hamilton Council’s timeline sets a deadline of February 13 for Council to pass amendments.
Following the final Council vote, Mayor Horwath will have up to ten days to veto any amendments she disagrees with. If she does not issue any vetoes, the budget will be deemed adopted.
If Mayor Horwath vetoes any amendments, City Council will have 15 days to meet and vote on overriding the veto. 11 of the 16 Council members (meaning 11 of the 15 ward councillors) must vote in favour of a motion to override.
Production Details
v. 1.1.0
Published: January 23, 2026
Last updated: January 23, 2026
Author: Joey Coleman
Update Record
v. 1.0.0 original version
v. 1.1.0 update regarding the Future Fund budget modification. City staff, in response to Council questions, clarified funds are not being removed from the Future Fund, the budget change referenced not repaying the fund. (12:05 p.m.)