District of Muskoka confirms 3.85% tax rate increase

A $2.4 million increase in policing costs is included in the rate

Staff confirmed a 3.85% tax rate increase despite Ontario Provincial Police (OPP) billing hit to District of Muskoka 2026 Budgets.

In the December 15, 2025, meeting, they announced that recent OPP billing will have a significant impact on the District’s 2026 Operating and Capital Budgets.

During the meeting Council reviewed the staff recommendations which reflected revised financial figures and long-term infrastructure planning requirements.

Staff indicated that the OPP billing included a $2.4 million increase in 2026 and recommended the District “phase in an estimated 11% increase in the cost” of OPP services from the Debt Recovery Reserve (DRR) over 4 years, from 2026-2029 “with an initial drawing of $1.8 million in 2026.”

They added that use of the DRR can help offset use of the levy impact for the cost of policing to almost $17.5 million, and result in “no contribution from the reserve in 2030.”

The 2026 budget was already set at 3.85% tax rate increase; however, staff advised that the added OPP billing could potentially increase it to 5.64% “which is quite significant.”

Chair, Jeff Lehman, recommended they use money from the Environment Reserve to help reduce an impact on the tax levy, “to keep it at 3.85%.”

He added, “The District has the ability to use reserves to mitigate policing cost to reduce the impact on residents,” expressing concerns about “how much to pass on the taxpayer.”

Councillors agreed with the impact of the billing to the budget, expressing discontent.

After debate about which reserve to use to manage the impact of the OPP billing to the levy, Councillors agreed to an amendment to transfer from the DRR “to reflect OPP billings of $19,281,319 for 2026.”

Staff were directed to make financial adjustments in various areas to create a new budget also reflective of the final tax rate increase.

Upon days of budget crunching after the meeting and department amendments, staff said they “confirmed with the Director of Budgets that the Tax Supported rate increase did remain at the 3.85%.”