York Region is bracing for the possibility of recession stemming from U.S. tariffs in its next budget.
Council committee of the whole passed a motion March 6 to prepare a “recession contingency budget” for 2026, benchmarked against the COVID-19 pandemic budgets of 2021 and 2022, as one option. As the baseline, staff will also be preparing a budget with a projected 4.22-per-cent tax-rate increase based on a budget direction report put forward.
King Mayor Steve Pellegrini brought the idea forward initially and said with everything the region is facing, there needs to be a budget that avoids any service level increases, such as hiring new staff.
“The region needs to be able to pivot, and I think we need to have that very clear,” he said.
Governments are preparing for the possible economic impact of the U.S. imposing tariffs that went into effect this week, projected to have a significant negative impact on the economy.
Stouffville Mayor Iain Lovatt said the pandemic serves as a benchmark for a financial crisis budget. Staff noted that in those pandemic years, there was essentially a “status quo” to limit tax increases.
“We’re going to know if tariffs are going to be around by the summer,” Lovatt said. “Hopefully, these tariff things are over by next week. If they’re not, at least staff will be working toward it.”
Besides preparing such a contingency budget, staff will also be working toward a budget with a proposed 4.22 per cent tax rate increase, with one per cent of that based on funding the subway extension. A staff report noted that between 2019 to 2025, York Region’s cumulative tax rate increase was several points lower than most other Ontario regional jurisdictions.
Newmarket Mayor John Taylor said the region should be prepared to take more steps beyond just less property tax increases to help if there is a financial crisis. He said that people will experience the tariffs differently and that a property tax reduction would not do much for renters.
“A $200 or so reduction in your property taxes maybe a year later or many months later, I don’t think is going to save the day,” Taylor said.
CAO Erin Mahoney responded that the region’s economic development team is working to understand the impacts and what supports could be provided.