$8 million amortization cost excluded from Huntsville's 2026 operating budget

The municipality says the statement "reflects an accounting treatment" permitted by the province

The Town of Huntsville’s budget report confirmed approximately $8 million in amortization costs for tangible capital assets has been excluded from the Town's 2026 operating budget, in the January 28, 2026, Council meeting.

Director of Financial Services/Treasurer, Julia McKenzie, explained that the provincial government rules “lets the Town leave out costs if it shows what the costs would have been.”

She added that while the budget includes a focus on revenue the Town will collect and spend, the financial statement includes what’s owed over time.

According to her report, the exclusion does not represent a reduction in spending but rather reflects an accounting treatment permitted under provincial rules.

It explains that amortization is a non-cash accounting expense that represents the gradual "use" or consumption of municipal infrastructure such as roads, buildings, and other long-term assets over their useful life.

While amortization must be recorded in the Town's annual financial statements, municipalities are allowed to exclude it from their operating budgets, so those budgets focus on actual cash expenditures and revenues for the year, adds the report.

By excluding the $8.0 million amortization expense from the operating budget, the Town's budget more clearly shows how funds raised during the year will be spent on services, programs, and capital investments, rather than including accounting entries that do not require cash payments.

The report also indicates that Huntsville prepares its annual budget using a modified accrual basis of accounting, while its financial statements are prepared using full accrual accounting. Because the two documents use different accounting approaches, Ontario Regulation 284/09 requires municipalities to provide council with a reconciliation and explanation when non-cash expenses like amortization are excluded.

Although amortization reduces the Town's accumulated surplus on paper, that impact is offset in part by planned capital investments.

In 2026, Huntsville plans to invest $10.3 million in new tangible capital assets, along with approximately $500,000 in reserve contributions.