Taxpayers to pay for District of Muskoka infrastructure deficit

Nearly $1 billion worth of assets are in poor condition according the the report

District of Muskoka staff rolled out the new Asset Management Plan, which involves a strategy for taxpayers contributing to funding gaps for infrastructure, in the July 21, 2025, meeting.

Director of Tax Policy and Long-Term Financial Planning, Vineet Bhatia, presented a plan to improve the quality of assets and reduce the deficit. He said the plan will act as a roadmap for asset management and reinvestment over the next decade.

According to Bhatia, the District has $6.29 billion of infrastructure assets that range from very poor, fair, good and very good condition. 

40% ($2.5 billion) are in good condition, 28% (1.8 billion) are very good, 18% (1.1 billion) are fair, and 12% are poor and 3% very poor totalling $917 million.

“The total replacement value of poor to very poor is $663 to $917 million as of December 31, 2024,” said Bhatia.

The financial strategy involves focusing on maintaining the fair category because he said it’s more “realistic and sustainable.”

He said, “87% of assets already meet the current threshold,” however, 13% require investment to do so.

Staff recommend a 20-year approach to manage the combined funding gap of $55 million and to “catch up investments needed.”

They indicated that users of the applicable services, such as water, sewer, and roads, will pay for the applicable deficit.

Chair, Jeff Lehman, expressed concern about inflation potentially costing taxpayers more money down the road with a long-term plan to manage/repair assets. He suggested borrowing at a low interest rate to complete projects now “will serve taxpayers better because they won’t suffer inflation added costs.”

Staff advised that a 4.3% inflation rate was factored into the financial strategy.

Commissioner of Finance and Corporate Services, Suzanne Olimer, added that they could “do a bite the bullet approach” however, recommended a gradual increase to the tax levy instead to cover the financial debt.

Lehman indicated that he wants “to learn more about what we can do with the plan” such as “using the District’s ability to borrow money instead” when they work on the capital budget in the fall.

Other Councillors agreed with the staff recommendation of the long-term plan and to build reserves instead.

Councillor, Peter Kelley, suggested they pay attention to spending in other areas “to see if we’re still spending on things we don’t need to be spending on.” He said, “We need to revisit the Strategic Plan to ensure no money is spent on stuff that’s nice to have.”

He added, “We need to look at how we will get out of this jam.”

Lehman expressed concern about the fiscal impacts to the 2026 budget and recommended that Council consider the financial plan along with other items in the budget during that time.

Council agreed to endorse the new plan with the understanding that they can consider the financial aspects during budgets.