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Mono will use 3.9% inflation rate as target for next budget debate

November 2, 2023   ·   0 Comments

By JAMES MATTHEWS

Mono council will use average inflation information only from 2023 when they debate next year’s municipal budget.

That’s as opposed to including monthly inflation rates from some months of 2022.

Les Halucha, the town’s treasurer, noted during council’s Oct. 24 meeting the Ontario consumer price index (CPI) over the past year up to the month before they start budget discussions. Last year, the formula came up with 6.5 per cent, but council went with four per cent.

The CPI measures the average price change experienced by consumers over a period of time.

Halucha said this year, the average formula comes in at 4.5 per cent, and it’s recommended that council continue with that benchmark to ink the 2024 operating and capital budgets.

“For at least 12 of the 14 years that I’ve been on council, we have used the CPI both as a cap for what our budget is going to increase and with our COLA (cost of living adjustment) clause with respect to wages,” said Deputy Mayor Fred Nix.

Councillor Elaine Capes suggested council discard CPI numbers from 2022 and only use those from 2023.

“That would bring us to a number of 3.9 per cent for the increase for this year,” she said. “I don’t really want to go to 4.5 per cent.”

“We use exactly the same methodology that Canadian Pension Plan and everyone else does,” Nix said. “The key difference is from what month to what month do we go?”

He said the period from October to September has been used for more than a decade.

“If we change that now, we upset the apple cart,” Nix said.

“The same formula is used by different agencies,” Halucha said. “It might be different months, might be a different period, but it’s consistent over the years and, at the end of the day, it works out fairly.”

“That’s the answer, Coun. Capes,” Nix said. “I wouldn’t support what you’ve asked for because I think we have to keep the same month to month period that we’ve done for 14 years.”

“Why do we use this number?” said Coun. Ralph Manktelow.

Nix said there had been a wage freeze before an increase during his first year on council.

“We did a very back-of-the-hand calculation and we said, what’re we going to do in the future?” Nix said. “A lot of other agencies say whatever else we do, we’ll increase wages and set a cap according to the cost of living.”

“It gives council a starting point for what the budget should increase and how much wages should rise,” he said.

“It’s not sacrosanct,” Nix said. “It’s not magic.”

“This is an unusual time right now,” Manktelow said. “We [see] CPIs going up from two-something [per cent] up to six or seven [per cent] and back down. Now it’s at 3.6 [per cent].”

Manktelow wondered if costs will be at 3.6 per cent next year or closer to 4.5 per cent. And, he said, that’s at the heart of Capes’ suggestion.

“She’s trying to be current,” Manktelow said.

“We’re making no decision today,” Nix said.

“I know you’re not making decisions but I’m trying to give some rationale to this, and I think there’s some reason for looking at a number which is pertinent to the expenses that we’re going to have for the next 12 months,” Manktelow said.

“I would just point out that we can’t guess the future,” Nix said.

“There is a prepared resolution if council does want to consider it,” Halucha said.

“Okay, you’re absolutely right,” Nix said. “Maybe we are making a decision.”

Mayor John Creelman said he agreed with Capes that current-year inflationary numbers should be used as opposed to being retrospective.

“I’ve always taken the position that whatever figure we choose is for budget planning purposes only,” Creelman said. “We’re not committed to it at budget time. We can alter it then if we find out the news is bad.”

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