Every municipality in Ontario grapples with the challenge of delivering quality services within its fiscal means. Yet when it comes to the balance between revenue and expenses, Prince Edward County stands out—not just for its ambitious spending, but for the scale of its structural imbalance. Compared to 10 similarly sized or structured municipalities, PEC is a clear and significant outlier in how much it spends relative to its size and income.
This article builds on previous comparative data to analyze why PEC’s budget stands apart, and what the consequences and remedies may be.
The Data: Prince Edward County vs. Its Peers (2024 budget figures for Prince Edward County and the 10 other municipalities)
| Municipality | Population (2021) | Revenue ($M) | Expenses ($M) | Revenue/Capita | Expense/Capita | Surplus/Deficit |
|---|---|---|---|---|---|---|
| Prince Edward County | 25,704 | $75.2 | $116.1 | $2,926 | $4,517 | -$40.9M |
| Belleville | 55,071 | $81.3 | $120.6 | $1,476 | $2,190 | -$39.3M |
| Quinte West | 46,560 | $80.6 | $80.6 | $1,731 | $1,731 | Balanced |
| Hastings County | 145,746 | $147.8 | $134.0 | $1,014 | $919 | +$13.8M |
| Kawartha Lakes | 79,247 | $147.8 | $147.8 | $1,865 | $1,865 | Balanced |
| Brockville | 22,116 | $43.6 | $43.6 | $1,971 | $1,971 | Balanced |
| Greater Napanee | 16,879 | $22.0 | $22.0 | $1,303 | $1,303 | Balanced |
Notes:
- Prince Edward County: The 2024 budget includes a tax-supported operating budget of $75.2 million and a capital budget of $116.1 million, with significant allocations for long-term care facility redevelopment.
- Belleville: The 2024 operating budget is $81.3 million, with total municipal expenses reported at $120.6 million.
- Quinte West: The approved 2024 budget totals $80.6 million, reflecting an overall 6.7% tax increase.
- Hastings County: The 2024 budget reports revenues of $147.8 million and expenditures of $134.0 million, indicating a surplus.
- Kawartha Lakes: The 2024 budget includes a capital budget of $72.3 million and an operating budget of $147.8 million, focusing on infrastructure and service delivery.
- Brockville: The 2024 municipal budget includes a net tax levy of $43.6 million. City of Brockville
- Greater Napanee: The 2024 municipal budget is $22 million, supporting various local services and infrastructure projects.
| Municipality | Population (2021) | Capital Budget ($M) | Operating Budget ($M) | Total Budget ($M) | Per Capita Budget |
|---|---|---|---|---|---|
| Prince Edward County | 25,704 | $116.1 | $75.2 | $191.3 | $7,441 |
| Belleville | 55,071 | $70.4 | $81.3 | $151.7 | $2,755 |
| Quinte West | 46,560 | $43.0 | $89.0 | $132.0 | $2,835 |
| Hastings County | 145,746 | $13.0 | $134.0 | $147.0 | $1,008 |
| Kawartha Lakes | 79,247 | $72.3 | $147.8 | $220.1 | $2,778 |
| Greater Napanee | 16,879 | $2.9 | $13.5 | $16.4 | $971 |
Notes:
- Prince Edward County: The 2024 budget includes a tax-supported operating budget of $75.2 million and a capital budget of $116.1 million, with significant allocations for long-term care facility redevelopment.
- Belleville: The 2024 capital budget is set at $70.4 million, focusing on infrastructure projects like the Avonlough Pumping Station and Bridge Street West reconstruction.
- Quinte West: The approved 2024 budget totals $132 million, reflecting investments in maintaining existing service levels and infrastructure.
- Hastings County: The 2024 budget reports revenues of $147.8 million and expenditures of $134.0 million, indicating a surplus.
- Kawartha Lakes: The 2024 budget includes a capital budget of $72.3 million and an operating budget of $147.8 million, focusing on infrastructure and service delivery.
- Greater Napanee: The 2024 municipal budget is $16.4 million, supporting various local services and infrastructure projects.
Why Is PEC Such an Outlier?
1. Extraordinary Capital Commitments
Prince Edward County has significantly ramped up capital investment, including major infrastructure projects (roads, wastewater, facilities). Unlike some municipalities, PEC appears to be front-loading capital spending, possibly without commensurate reserve balances or external funding in place.
2. Tourism With Inadequate Tourist Taxation
PEC hosts over 650,000 visitors annually, yet lacks dedicated revenue tools to offset wear-and-tear, traffic, policing, and service spikes. Municipalities like Niagara-on-the-Lake and Ottawa use municipal accommodation taxes (MAT) to recover some of these costs. PEC does not direct it’s MAT funds exclusively to infrastructure—yet bears the cost of a much larger transient population to Sandbanks. PEC uses the MAT to fund marketing which in arguably of far less value to ratepayers than infrastructure investments. PEC should demand a 4% visitor fee from the Province for visitors to Sandbanks.
3. Dispersed Service Delivery
With 1,046 km of roads, a low population density, and small population centres, PEC faces higher unit costs to deliver the same services that urban peers provide more efficiently.
4. Rapid Payroll Growth
Between 2023 and 2024, staff earning over $100K rose from 34 to 46, a 35% increase. While professionalization of staff is essential, PEC now spends $6 million annually on its top earners alone, which is disproportionate to its population and comparable to municipalities double or triple its size.
5. No Buffer from Industrial Tax Base
Whereas Belleville, Kawartha Lakes, and Quinte West benefit from industrial, commercial, or institutional tax contributions, PEC’s tax base is overwhelmingly residential and farmland, limiting revenue options.
Why This Matters
- Fiscal Instability: A $44.5M gap between revenue and expenses is unsustainable over time and may trigger debt growth, reserve depletion, or forced service cuts.
- Ratepayer Burden: Without external revenue sources or structural reform, the gap will fall on residents through future tax increases or reduced services.
- Credit Rating Risk: Persistent structural deficits could affect borrowing costs, especially if capital borrowing continues to rise without stable repayment plans.
Recommendations for Immediate and Long-Term Action
- Launch a Structural Deficit Task Force: Engage independent experts to identify systemic spending drivers and revenue gaps.
- Broaden the Municipal Accommodation Tax (MAT) base: Apply a 4% levy on Sandbanks Provincial Park visitors to recapture tourism-driven service costs.
- Introduce a Dedicated Infrastructure Levy: Separate capital costs from operating budgets and create a predictable funding stream.
- Initiate a Staff Compensation Review: Benchmark salaries and staffing levels against similarly sized municipalities.
- Enhance Transparency and Public Engagement: Share data regularly on budget drivers, and give residents a direct role in spending prioritization.
Detailed breakdown of Prince Edward County’s 2024 capital budget
Here is a detailed breakdown of Prince Edward County’s 2024 capital budget, totaling $116.1 million:
🏥 Long-Term Care Facility Redevelopment
- Allocation: $94.7 million
- Purpose: Redevelopment of the H.J. McFarland Memorial Home, pending additional provincial funding.
- Note: This project constitutes over 80% of the total capital budget.
- Source: County Live
🛣️ Roads and Infrastructure
- Rural Roads Rehabilitation: $4.3 million
- Continues the implementation of the Council-approved five-year road improvement plan.
- County Road 49 Culvert Replacements: $2 million
- Initial phase in rehabilitating this road, with $419,000 sourced from the Municipal Accommodation Tax.
- Picton Main Street Reconstruction (Phase 3): $7.8 million
- Covers road work from 260 metres east of Spencer Street to Folkard Lane.
- Water and Wastewater Upgrades (Picton Main Street): $9.7 million
- Includes underground infrastructure improvements in conjunction with the road reconstruction.
- Total for Roads and Infrastructure: Approximately $23.8 million
- Sources: Quinte News, Prince Edward County Municipal Services
🚒 Emergency Services and Equipment
- Emergency Vehicle Acquisition: Funding allocated for the purchase of a new emergency vehicle.
- Firefighter Training Facility: $25,000
- Supports the establishment of a new facility for firefighter training and certification, with $15,000 funded through community donations.
- Source: Quinte News
🏛️ Municipal Buildings and Properties
- Improvements: Funds allocated for enhancements to several municipal buildings and properties to support service delivery. Prince Edward County Municipal Services
🌳 Community Improvement Projects
- Allocation: $618,000
- Purpose: Supports 10 community improvement projects, including upgrades to boat docks, installation of outdoor multipurpose hockey rinks, construction of a permanent washroom, and streetscape enhancements.
- Funding Source: Parkland Reserve, contributed by developers under the Planning Act.
- Sources: Prince Edward County Municipal Services, Quinte News
💧 Water and Wastewater Capital Budget
- Allocation: $10.6 million
- Purpose: Covers capital projects related to water and wastewater services.
- Note: This budget is rate-supported and primarily debt-financed, with no direct impact on property taxes.
- Sources: Prince Edward County Municipal Services, Quinte News
This comprehensive capital budget reflects Prince Edward County’s commitment to investing in critical infrastructure and community services. The significant allocation towards the long-term care facility underscores the municipality’s focus on addressing the needs of its aging population.
Conclusion
Prince Edward County’s fiscal profile is an outlier in every sense: highest spending per capita, largest structural deficit, and limited access to non-residential revenue streams. While some of these conditions are inherent to rural geography and tourism intensity, the current path is unsustainable. Now is the time for council and staff to implement structural changes—not just budget balancing acts—and to engage the public in shaping a more financially resilient future for Prince Edward County.