In part three of my budget series, I walk through the steps Council and staff go through to arrive at the final HRM budget. Even in just the two budgets I’ve been through, there have been some changes to how we go through it. I’ll focus on this year’s process, which I thought was an improvement (and had a lot to do with it being the second year of a newly-elected Council).
Direction from Council: the budget pre-season
The budget process in my first year on council was a bit of an anomaly, in that, by virtue of the election having taken place in November of 2024, much of the budget process was left in the hands of staff, awaiting some comparatively last-minute direction from the new Council. I and many councillors felt the first budget we went through was largely pre-baked by the time we got to review it. We just took it out of the oven and picked around the edges a bit to finalize it, but with some big bites taken out that impacted our budget this year (as I mentioned with the Library Reserve in Part 2).
To be fair, staff does the heavy lifting on every budget. They have the operational experience and understanding of how their respective business units work at a granular level. Council members all have different backgrounds, different takes on the information we receive, and we represent communities with differing points of view. It’s a lot to absorb into the budget process, especially when most of the budget is assembled in the fall – right as we were being elected – and largely based on how operations have run in the prior year, naturally. Council’s job is to inject the community’s perspective into the discussion as members elected to represent them. We provide direction to the CAO (one of two employees that report to Council), and the CAO takes that direction and puts it into action within the business units of the municipality.
Coming out of the 2025/26 budget, Councillors were generally in agreement that if we wanted to see anything change materially – and we knew it had to based on the rather stark predictions of our finance team – direction from Council needs to happen as early as possible. So that’s exactly where we took it.
As the budget wrapped up, the Mayor made a motion that Council passed that provided the following direction:
THAT Halifax Regional Council direct the Chief Administrative Officer (CAO) to return to Council by June 2025 with a staff report that includes feasible options and considerations for the 2026/2027 budget and business planning process including the following:
- Hold the expenditure levels flat for the 2026/2027 budget with consideration for an increase for inflation based on CPI, contractual commitments, mandatory provincial contributions, and items already approved by Council in the 2025/2026 budget.
- Identify operating efficiencies and savings that could be implemented in this current budget year.
- Examine options for long term efficiencies and savings in both the operating and capital budget including areas of duplication, service modernization, project integration, and potential redeployment of resources.
- Identify options for revenue diversification and funding including financing tools, user fees, private and public partnerships, and revenue sharing.
- Consider financial sustainability and service delivery enhancement opportunities for core services to identify efficiencies, find capacity, and increase productivity.
- Timeline for the annual business planning and budget process that would be shorter and start earlier for Council and conclude with an approved budget no later than February 28th.
As you can see, the motion responds rather directly to the pressures that the 2025/26 budget had made apparent to us all. Without intervention, the municipal budget was not sustainable. Costs were escalating much more rapidly than the limited forms of revenue the municipality has coming in – mostly property taxes and service fees. And so we needed to provide clear guardrails to the process going into the next budgeting cycle as early as possible. The first point of the motion is considerable. It means all else being equal, let’s hold the line on expenditures. Bring back only what we have to do based on current levels of service to the community.
Then lines 2, 3 and 5 go further still, asking for analysis to be done on those expenses and look for ways to save money in the short and long term other operationally and on the capital front (since that affects operations down the line as well).
Item 4 asks for options to consider with regard to revenue that are within the municipality’s control.
And finally item 6 asks staff to come back with a revised timeline for the budget process that would see the budget start and conclude earlier.
This motion resulted, as required, in a staff report dated June 10th 2025.
The staff report laid out a variety of responses to the above direction. On July 8th, Council voted in favour of a motion brought by the Mayor to provide further direction to the CAO to help shape the next year’s budget based on the information in this staff report. The unanimously motion passed (item 15.1.1 on our agenda of that day), after some wrangling over particulars, was:
THAT Halifax Regional Council:
- Direct the Chief Administrative Officer to return to Council with a proposal for a comprehensive service review framework, including a classification model for core and non-core services, and options for internal or consultant-led execution;
- Direct the Chief Administrative Officer to return with a corporate user fee policy and pricing strategy, including cost-recovery guidelines, inflation adjustment protocols, and fee exemption criteria;
- Direct the Mayor to write to the Province of Nova Scotia requesting a formal review of service exchange and mandatory contributions as well as a funding agreement that provides HRM with a share of HST revenue or equivalent ongoing funding, in recognition of the Municipality’s investments in capital infrastructure and economic development;
- Direct the Chief Administrative Officer to prepare the 2026/2027 budget in accordance with the timeline as outlined in the staff report dated June 10, 2025, with the removal of the requirement for a single dedicated public participation opportunity; and
- Direct the Chief Administrative Officer to reprioritize the capital plan as well as any new capital asks for the 2026/27 four-year period to ensure that projects advancing in the plan reflect infrastructure investments that deliver the greatest long-term cost savings or cost avoidance for taxpayers, specifically in support of existing municipal core services. This reprioritization is to be undertaken in alignment with the existing capital prioritization framework.
Between the original motion, and this later motion that stemmed from it, you see the layers of the onion. Noteworthy here is #3, seeking consideration from the Province recognizing HRM’s position as an economic driver for the entire province and the foundation of that economic strength being municipal investment. I’m checking, but I’m not aware of the municipality getting anything back from the Province in response to that portion of the motion.
That sets the table for the 2026/27 budget. Council provided a fair amount of direction on this budget that the first one couldn’t, and staff took that away to come back. Of note is that the staff report from June 10th did clarify that the desire to start and end the budget process early was not quite as feasible (for one thing, PVSC doesn’t present its assessment roll to the municipalities across the province until mid-January so some aspects of budgeting wait for that, along with contract award periods influenced by the budget timeline), but the rest of the direction had been accepted and would shape what was to come back.
In the next part, I’ll outline the “regular season” of the budget – public participation, business unit presentations and debates.