StrategicForesight
The Community EditionWR RELEASES BUDGET FOR 2026
In November, the Region of Waterloo released its 2026 preliminary budget plan, which includes major allocations for local initiatives such as the Ending Veteran Homelessness Initiative and a tree-planting project by the Waterloo Region District School Board (WRDSB).
The budget lists federal grants among its revenue sources—a sign that recent funding from Ottawa may help support key projects in the region.
The 2026 budget draft proposes a 4.94 per cent increase in the regional tax levy, which would add around $96 per year to the average homeowner’s bill.
Meanwhile, the City of Kitchener’s draft budget includes a 2.2 per cent property tax increase, plus utility rate hikes, bringing the total estimated impact for the average household to $117. These increases reflect rising operational costs across housing and homelessness services, transit, infrastructure maintenance and other essential programs.
In 2025, the region spent $165.2 million on social housing and homelessness initiatives. Across 2024, total spending on affordable housing and homelessness programs reached $245 million, with roughly 23 per cent specifically dedicated to shelters and supportive housing. Without federal and provincial transfers, the Region of Waterloo warns that maintaining current service levels could require even higher taxes or cuts to critical programs.
“Federal and municipal programs play a critical role in supporting housing and food security locally,” Ke Cao, assistant professor of Strategic Management at Wilfrid Laurier University, said.
Cao also believes that only the governments can address the crisis we are facing.
“I teach in business school, and I told my students that the role of government is very important because it handles the business of the whole society,” he said.
The federal funding announced this year helps relieve some of this financial pressure. The contributions support the Ending Veteran Homelessness Initiative, addressing the gap in local housing services by providing support for veterans, along with other homelessness-response programs.
This funding helps sustain shelters, outreach teams, and supportive housing while reducing strain on municipal budgets. Additional funds support long-term initiatives such as environmental and infrastructure projects, including the WRDSB’s tree-planting program, which contributes to urban canopy growth and climate resilience.
According to the preliminary budget, the region plans to increase their spending in 2026 by $11.7 million for housing services and $2.7 million for homelessness-related programs. These increases reflect rising costs for housing and homelessness services, transit, infrastructure and other essential programs. Municipal leaders also welcomed federal contributions, noting that without them, residents would face significantly higher tax burdens and essential services could be reduced.
“We’re happy to see the $6 billion over 10 years through the Direct Delivery Stream to support regionally significant projects,” Dorothy McCabe, mayor of Waterloo, said.
In a 2024 public statement, McCabe warned that Waterloo is under structural financial pressure and stressed the need for stable, predictable funding instead of one-time grants to support long-term municipal priorities.
Advocates, including the Federation of Canadian Municipalities, repeatedly called on Ottawa to expand multi-year funding streams to help municipalities meet growing demands without overburdening residents.
Federal support combined with municipal budgeting decisions will determine whether services keep pace with community needs or whether tax increases and service pressures continue to rise.
Although the latest funding provides relief to the Waterloo region community, regional leaders explained that ongoing collaboration between federal, provincial and municipal governments will be essential to sustain programs, stabilize communities and advance long-term priorities such as housing affordability and environmental resilience.
The Waterloo Region’s annual budget process began on Oct. 22, and regional council plans to review the final 2026 budget on Dec. 16. For more information regarding the preliminary 2026 budgets, visit the Region of Waterloo’s Budget and Financial Statements page.
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Yaqub. M
James H. Mayfield
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