The Cost of Living in Your Own Community
A County First Special Investigation into Taxes, User Fees and Municipal Affordability
How Municipal Fees Travel from an Administrative Recommendation to a Resident’s Wallet
A resident renews a burn permit and discovers that the price has increased. A family arrives at a municipal boat launch and learns that parking now requires a seasonal pass. A farmer, contractor or small-business owner submits an application and encounters a collection of administrative charges, deposits, inspection fees and professional-review costs. The amounts appear on the municipal website or in a fees and charges by-law with the impersonal authority of a price list, as though they emerged naturally from the cost of delivering the service.
They did not.
Every municipal fee begins with a decision about who should pay for local government. Someone determined that a particular service should no longer be financed entirely through property taxation. Someone estimated the cost, selected a recovery target, reviewed comparable municipalities and recommended an amount. Senior administrators approved the recommendation for presentation, councillors received a report, and Council ultimately voted to place the charge into law.
Residents generally encounter only the final number. They seldom see the assumptions behind it, the alternatives that were considered, the administrative costs of collecting it or the discussion that determined whether the service primarily benefits an individual or the broader community. Yet those unseen judgments decide whether a municipal program is financed collectively through taxation or charged directly to the person who needs it.
A fee schedule may look like routine administration, but it is actually one of the clearest expressions of municipal political priorities.
The Authority to Charge
Ontario municipalities have broad statutory authority to impose fees and charges for services and activities they provide, for the use of municipal property and for certain costs payable by the municipality. That authority is contained primarily in Part XII of the Municipal Act, 2001, including section 391, and is generally exercised through a by-law approved by Council.
The legislation gives municipalities the power to charge. It does not require them to impose every fee available to them, nor does it ordinarily prescribe the exact amount that should be collected. Those choices remain local.
Council may decide that a service should be fully supported by the person using it, partly subsidized through property taxation or provided without a direct charge because its benefits extend across the community. It may distinguish between residents and non-residents, households and businesses, commercial and charitable activities, or essential and discretionary services. It may also decide that the administrative burden of collecting a small fee exceeds the revenue generated.
The legal authority therefore answers only the first question: May the municipality impose the charge?
It does not answer the more important public-policy questions: Should it impose the charge, how much should it collect, and who should carry the cost?
Staff Recommend, but Council Decides
Municipal staff occupy an essential and legitimate role in this process. Department managers understand their programs, finance officials monitor revenues and expenses, and senior administrators are responsible for presenting Council with professional recommendations. Staff may identify a shortfall, calculate the cost of delivering a service, compare rates in other municipalities and propose that an existing charge be increased or a new one introduced.
But staff do not replace Council’s democratic responsibility.
The Association of Municipalities of Ontario describes municipal councils as responsible for making decisions concerning municipal finances and services while considering the interests of residents and businesses. Staff advise Council and administer the policies and programs Council approves.
That distinction matters because accountability can become blurred when a controversial charge is questioned. Councillors may say that they relied on professional advice, while administrators may respond that the final decision belonged to Council. Both statements can be true, but neither should become a shield.
Staff are responsible for the quality, completeness and neutrality of the recommendation. Council is responsible for testing the evidence, considering alternatives and deciding whether the proposed burden is fair. The administration develops the case, but elected officials make it public policy.
When the fee reaches a resident’s wallet, accountability belongs to both.
How a Fee Moves Through Municipal Government
The process usually begins quietly, often months before the public sees the final by-law. A department prepares its operating plan for the coming year and reviews the costs associated with its programs. Staff may consider wages, insurance, equipment, software, maintenance, contracted services, supplies, payment-processing charges and a portion of corporate overhead. They may examine transaction volumes, forecast demand, estimate inflation and compare the municipality’s current fee with those charged elsewhere.
A proposed rate is then reviewed by finance officials and senior management. Recommendations from multiple departments may be consolidated into a single annual fees and charges report, accompanied by a by-law containing dozens or hundreds of individual amounts. Council receives the package, sometimes during the budget process and sometimes through a separate committee or Council meeting, before voting on the by-law as a whole.
Prince Edward County’s 2026 Fees and Charges By-law demonstrates the breadth of what may be included in such a document. It contains charges relating to services such as fire protection, waste management, transportation, planning, building, parking, marinas, cemeteries, recreation facilities, museums, canine control, community halls and other municipal activities.
The sheer size of a fee schedule creates an accountability problem. A councillor may be asked to approve a document containing hundreds of separate charges, some unchanged, some increased modestly and others altered substantially. A resident interested in one particular permit may have to compare two lengthy by-laws line by line to discover that its price has changed.
Administrative convenience can therefore come at the expense of public understanding.
The Hidden Policy Question
Municipal reports frequently present a fee as a financial calculation, but every fee also contains a policy judgment about who benefits from the service.
A service that provides a direct and exclusive benefit to one person or business may reasonably be financed mainly by that user. A service that benefits the entire community may be more appropriately supported through general taxation. Many municipal services contain elements of both.
A burn permit allows an individual property owner to conduct a particular activity, but the permit system also contributes to fire prevention, public safety and emergency preparedness. A boat launch gives a boater direct access to the water, but public waterfront access can also support recreation, tourism, fishing, local commerce and the wider character of the community. A building permit benefits the applicant seeking permission to construct, but inspections also protect future occupants, neighbours, emergency responders and the public interest.
The real question is not simply whether one identifiable person uses the service.
It is how the private and public benefits should be divided.
Oakville’s formal user-fee procedure illustrates a more explicit approach. It provides that services conferring a direct benefit on individuals, groups or businesses may be financed through user fees, while services that also produce a broader public benefit may receive a subsidy from other municipal revenues.
That framework forces the municipality to confront the underlying policy choice rather than treating every service as though it should automatically recover its full cost from the person standing at the counter.
The Phrase That Ends Too Many Debates
Few expressions carry more weight in municipal finance than cost recovery. Once a report states that an increase is necessary to recover costs, the recommendation can appear almost self-evident. The public is left with the impression that the fee merely reflects an objective expense rather than a series of choices about which expenses to include and how they should be allocated.
But cost recovery is not a single, universally defined calculation.
A municipality might include only the staff time and technology directly required to process a permit. Another might add supervision, enforcement, legal support, information technology, office space, insurance and a proportionate share of corporate administration. Some of those costs may increase with each transaction, while others would continue whether the municipality processed ten permits or ten thousand.
The resulting fee depends heavily on the model selected.
A narrow direct-cost calculation may produce a modest charge. A fully allocated cost model can produce a much larger one. Either approach may be defensible, but Council and residents should be told which one is being used.
The phrase “full cost recovery” should never substitute for showing the calculation.
What Councillors Should See Before Voting
A responsible recommendation should provide considerably more information than the current amount, the proposed amount and the percentage increase. Councillors should know the actual cost of delivering the service, the number of expected transactions, the revenue generated under the existing rate and the revenue expected after the increase. They should be shown which expenses are direct, which are allocated overhead and which would remain even if the fee disappeared.
They should also be told whether the charge is required by legislation or represents a local policy choice, what portion of the service benefits the individual user, whether the fee creates a barrier to access and how the proposed amount compares with household income and local affordability. Any comparison with other municipalities should explain why those communities were selected and whether they provide the same service at the same level.
Most importantly, the report should identify what was done to reduce the cost before residents were asked to pay more. That means examining automation, simplified procedures, shared services, joint procurement, alternative software, reduced duplication and redesigned workflows.
Without this information, Council is not truly deciding how a municipal service should be financed. It is approving a price.
When Inflation Becomes Automatic Government
Municipalities often adjust fees annually by inflation. The practice is easy to explain and easy to administer. Wages, fuel, supplies, insurance and contracted services become more expensive, and an inflationary increase can preserve the municipality’s purchasing power without requiring a complete review of every charge.
The danger arises when inflation becomes automatic.
Technology may have reduced staff time. Online applications may have eliminated paper handling. Transaction volumes may have increased, allowing fixed costs to be spread across more users. A department may have adopted more efficient scheduling, shared a service with another municipality or replaced expensive software. If productivity has improved, a fee need not necessarily rise at the same rate as general inflation.
An automatic annual increase can gradually disconnect the amount charged from the actual cost of delivering the service. Over time, a charge introduced to recover a modest administrative expense can become an established revenue source that is rarely examined from first principles.
Before approving an inflationary adjustment, Council should receive two answers: what became more expensive, and what became more efficient.
A municipal budget should account for both.
The Problem With Benchmarking
Benchmarking can help Council determine whether a proposed fee is dramatically outside prevailing municipal practice. It becomes dangerous, however, when the comparison itself is treated as proof that the fee is justified.
If one municipality charges $25 for a permit and its selected comparators charge between $20 and $30, the fee may appear reasonable. If other comparable municipalities provide the same permit for $10 or without charge, the policy question looks very different.
The result depends on who is included.
Benchmarking also reveals only what other municipalities charge. It does not establish what the service costs locally, whether those other municipalities operate efficiently, whether their residents can afford the amount or whether they are all repeating one another’s assumptions.
Council should not ask only, “What do our neighbours charge?”
It should ask, “Who delivers this service most efficiently, what does it actually cost, and why?”
The Consultant’s Influence
Consultants sometimes play a significant role in setting municipal fees, particularly in areas such as planning, building, recreation, development charges, water and wastewater, compensation and service delivery. Their expertise can be valuable, especially where specialized financial modelling or cross-municipal data is required.
But consultants answer the assignment they are given.
A consultant asked to compare a municipality’s rates with its peers will produce a market comparison. A consultant asked to identify savings, examine affordability and test whether the fee remains necessary may reach a very different conclusion. The terms of reference can therefore shape the eventual recommendation long before the report reaches Council.
Councillors should ask who selected the comparator municipalities, whether lower-cost jurisdictions were included, whether the consultant reviewed operational efficiency and whether the possibility of reducing or eliminating a fee formed part of the assignment.
Professional advice should inform democratic judgment. It should not replace it.
The Democratic Weakness of One Large By-law
An annual fees and charges by-law may consolidate a municipality’s entire fee system into one vote. That is efficient from an administrative perspective, but it can obscure meaningful differences among the charges being approved.
A councillor may support a modest increase in arena rental rates but oppose a sharp increase in a fire permit. Another may favour full cost recovery for a complex commercial planning application but believe that children’s recreation, public waterfront access or community facilities should receive greater tax support. When all of those decisions are bundled together, councillors may feel compelled to accept the entire package despite concerns about individual items.
Council should therefore require staff to identify separately every new fee, every increase above inflation, every significant change in cost-recovery policy and every charge expected to create an affordability or access concern. Those items should be highlighted in the report and, where appropriate, debated or voted on separately.
Residents should not have to search through dozens of pages to learn what is changing, and councillors should not have to reject an entire municipal fee schedule merely to oppose one questionable increase.
Public Notice Is Not Public Understanding
Publishing an agenda package satisfies an important transparency requirement, but placing a document online does not necessarily make the decision understandable.
Most residents do not monitor every committee agenda, locate the annual fee by-law, retrieve the previous version and compare each line. They usually discover the change only when applying for a permit, reserving a facility or paying for a service.
A municipality committed to meaningful transparency should publish a plain-language annual summary showing the current fee, the proposed amount, the percentage change and the reason for the recommendation. It should identify all new charges and all increases above inflation, along with their expected revenue and cost-recovery targets.
For example:
| Municipal service | Current fee | Proposed fee | Change | Reason given |
|---|---|---|---|---|
| Burn permit | $20 | $25 | 25% | Administration, technology or program costs |
| Boat-launch pass | $50 | Proposed amount | Percentage | Maintenance, enforcement or policy change |
| Arena rental | Current rate | Proposed rate | Percentage | Operating cost and subsidy target |
| Planning application | Current rate | Proposed rate | Percentage | Staffing, review or external expenses |
Such a summary would not prevent Council from approving increases. It would ensure that residents can see what is being proposed before the vote rather than after receiving the bill.
Who Benefits, and Who Is Excluded?
A fee can be financially small and still have a significant effect on access. A charge imposed on a high-income household may be barely noticed, while the same amount may discourage a senior, a lower-income family or a young person from participating in a municipal activity.
This is especially important for recreation, transportation, community facilities and public access to natural amenities. A municipality may recover more revenue by increasing a charge while simultaneously reducing participation among the residents most likely to benefit from the service.
Council should therefore consider not only how much revenue a fee generates but whom it excludes.
A recreation program that becomes inaccessible to lower-income children may create larger social and health costs elsewhere. A waterfront fee that discourages local use may weaken the public character of a community asset. A small-business licensing or permit increase may appear modest to the municipality but become one more fixed cost borne by an enterprise with narrow margins.
Cost recovery should not be evaluated in isolation from social consequences.
The Administrative Cost of Collecting Money
Some fees may cost nearly as much to administer as they generate. The municipality must maintain payment systems, reconcile transactions, answer questions, process refunds, handle exemptions and enforce compliance. Credit-card charges and third-party software fees may further reduce the net revenue.
A $10 charge that requires several minutes of staff time, payment processing, record keeping and customer support may produce little meaningful financial benefit. It may also frustrate residents and create avoidable work for municipal employees.
Before maintaining or introducing a low-value fee, Council should be told the gross revenue, the full administrative cost and the net amount that remains.
A municipality should not spend a dollar collecting a dollar merely because the fee has always existed.
The Questions Every Councillor Should Ask
Before approving a new or increased fee, councillors should insist on clear answers to a series of basic questions. What does the service actually cost? Which expenses are direct and which are allocated overhead? How much revenue does the current fee generate? What percentage of the program is already supported by taxation? Does the service mainly benefit one user or the wider community? Could the cost be reduced through technology, shared services or process redesign? Will the charge restrict access for lower-income residents or small businesses? Were lower-cost municipalities included in the comparison? What would happen to property taxes if the fee were reduced or eliminated? When was the fee last reviewed from first principles?
These are not anti-tax or anti-government questions. They are the questions responsible government should welcome.
A councillor who cannot obtain clear answers should not assume that the recommended amount is reasonable merely because it appears in a staff report.
The vote is the point at which administrative advice becomes a financial obligation imposed on the public.
A Municipal Fee Accountability Standard
County First proposes that every municipality adopt a clear fee-accountability standard built around transparency, evidence and periodic review.
The municipality should maintain a complete, searchable inventory of every fee and explain the purpose of each charge. Residents should be able to see whether it is intended to recover costs, manage demand, influence behaviour, regulate an activity or generate revenue. Each fee should include a disclosed calculation distinguishing direct costs from overhead and identifying the percentage of the service financed through taxation.
Council should apply a public-benefit test, consider affordability and require staff to examine cost reductions before recommending an increase. New fees and increases above inflation should be identified separately rather than buried in a consolidated schedule. Annual results should show transaction volumes, gross revenue, collection costs and actual cost-recovery rates.
Finally, every fee should be subject to a substantive review at least once during each Council term. It should not survive indefinitely merely because it was introduced years earlier and increased automatically ever since.
The objective is not to prevent municipalities from charging legitimate fees. It is to ensure that every fee remains necessary, proportionate and publicly defensible.
Who Is Ultimately Responsible?
It is tempting to refer to “the municipality” as though it were a single decision-maker, but a municipal charge moves through several layers of responsibility.
Department staff understand the program and prepare the initial analysis. Finance officials examine revenues, expenses and budget implications. Senior administrators decide whether the recommendation is sufficiently developed to place before Council. Consultants may contribute specialized studies and comparisons. The chief administrative officer is responsible for ensuring that advice reaching Council is professionally sound and aligned with municipal direction.
Councillors then decide whether to accept, amend, defer or reject the recommendation. The mayor or head of Council helps shape the debate and the municipality’s broader fiscal direction. Residents can review reports, contact councillors, make delegations and ultimately judge the decisions at election time.
No participant should be invisible.
Staff should explain how the amount was derived. Consultants should disclose the limits of their assignment. Councillors should make their reasoning clear. Council should record the decision, and residents should be able to identify who supported it.
The annual fee by-law is not simply an accounting document. It tells the public which services Council believes should be financed collectively and which should be charged directly to individual households and businesses.
It is a map of who pays for local government.
The Decision Should Be Visible
There may be legitimate reasons for a $25 burn permit, a $56.50 resident boat-launch parking pass or an increase in a planning, recreation or licensing charge. Prince Edward County currently lists the resident seasonal boat-launch parking permit at $50 plus HST, for a total of $56.50.
But a possible justification is not the same as a demonstrated one.
Residents should not be expected to accept that a fee is reasonable merely because staff recommended it, a consultant benchmarked it or neighbouring municipalities charge something similar. The municipality should show its work, explain the alternatives and disclose whether the amount reflects actual costs, a policy objective or a revenue target.
Staff should present the evidence. Council should test it in public. Councillors should make a clear decision, and residents should know who voted to place the charge on their bill.
Because every fee begins somewhere.
The public has a right to see where.
Coming Next
Part 6 — The Benchmarking Trap
Are Municipalities Quietly Competing Their Costs Higher?
Municipalities regularly compare their fees, salaries and service costs with those of neighbouring communities. The practice appears prudent, but when every municipality attempts to reach or exceed the average, benchmarking can create a cycle in which costs continually rise.
The final article in this series examines whether municipalities are comparing the wrong things—and whether affordability, productivity and innovation should matter more than the prices charged by their peers.
Disclaimer
This article is part of County First’s “The Cost of Living in Your Own Community” series examining municipal taxes, fees, permits and affordability in Ontario. It is based on publicly available legislation, municipal policies, fee schedules and government information available at the time of publication.
Municipal powers, procedures and notice requirements may vary depending on the type of charge and the legislation governing it. Nothing in this article should be interpreted as alleging wrongdoing, misconduct or improper motive by Prince Edward County, another municipality, an elected official, public servant, consultant or private organization. The discussion concerns governance structures, transparency, affordability and public-policy choices.
County First welcomes corrections, additional information and alternative perspectives that contribute to a fair, balanced and evidence-based public discussion.
The Series
Part 1 – The $25 Burn Permit
Why do some municipalities using the same software provide burn permits free of charge while others charge $25? What does the permit actually cost to administer, and should public safety programs be funded through user fees at all? Read more.
Part 2 – The $56 Boat Launch
Have public boat launches become another revenue source for municipalities? When residents already pay property taxes to maintain public infrastructure, is charging additional parking or launch fees the right approach? Read more.
Part 3 – Permit Hell
Why can a straightforward property project require multiple permits, overlapping approvals and repeated applications? Can Ontario modernize its approval system without compromising environmental protection or public safety?
Part 4 – The User Fee Economy
How much do Ontario municipalities collect through permits, licences and user fees each year, and how has that changed over time? Are municipalities becoming increasingly dependent on fee revenue?
Part 5 – Who Decides What You Pay?
How are municipal fees established? Who recommends them? What evidence is presented to council, and how transparent is the decision-making process?
Part 6 – The Benchmarking Trap
Municipalities often compare themselves with neighbouring communities when setting salaries, fees and charges. Does benchmarking create an unintended cycle where costs gradually rise across Ontario because everyone is measuring themselves against one another?