District of Muskoka is looking at a 3.85% tax increase for 2026

The district tax is a portion of your total property tax, along with municipal taxes and an education portion

The District of Muskoka is looking at a 3.85% tax increase for 2026, according to Chair, Jeff Lehman’s “Chair’s Update to Council” included in the November 17, 2025, Council meeting.

Lehman indicated that the Committee of the Whole was to review and approve the tax rate supported budgets for 2026 today.

This budget is a part of a two-year budget that was approved last year.

Lehman indicated, “Staff have done excellent work to deliver a proposed tax increase that is slightly (0.07%) less than forecast when the two-year budget was approved for the general tax supported budget.”

He said that he has received public feedback that the District should be more transparent about its spending with clearer communication. He suggested this can be done by outlining operating increases and proposed capital investment increases, which will help show District investments in capital projects, such as roads, water, and affordable housing.

The Treasurer report focused on changes to the 2026 budget, such as service changes, increase in costs for OPP, “and some rationalization of reserve contributions,” said Lehman.

He also mentioned that provincial funding from the province has been helpful with operations for the Fairvern redevelopment, which will help with hiring employees for the new facility, which “means the hiring and operation of the facility is not forecast to have a levy impact.”

He added, “2026 is an unusual year in that both capital and operating costs are jumping due to the completion and opening of the Fairvern home. However, operating funding from the Ministry will offset a substantial amount of the Fairvern-related increase.”

He broke down the 3.85% tax increase as:

• Operating: Year over Year tax increase for District services – 2.05%
• Capital: Municipal Infrastructure and Housing Investment – 1.49%
• Hospital: Local Share and Hospital Reserve – 0.31%

He recommended that Council direct staff to identify the capital and operating parts of the tax increase moving forward, pending Council approval of the approach.

A “Letter to Taxpayers” was also prepared by the Chair, which he said he will circulate separately. He said it will explain the service delivery arrangements of the District and “the benefits our taxpayers receive, and why some municipal service costs are shared across the District instead of the local level.”

He praised the budgeting practices of District staff, along with their “commitment to fiscal responsibility.”

He added, “As Council considers the pace at which we increase capital spending to properly fund asset management, housing investments, and other key priorities we continue to work from a position of relative fiscal strength.”