Out of Control Expenses
Owen Sound 's Expense Growth
expenses will more than double by 2026
City expenses increased by $19.3 million or
48.2% between 2011 and 2023 based on the city's Audited Financial Statements.
(As
of October 2025 the 2023 Statements are the latest posted on the city's website.) This was
over double the 19.6% increase in the Consumer Price
Index (CPI) for the same period.
The linear projection of expenses, shown as dashed lines on the graph below, shows that expenses have been increasing steadily at a rate of nearly $1.49 million per year. If Council continues on this path, expenses are projected to reach $63.1 million by 2026. The 2026 budget will be available in a few months so we will soon be able to measure the accuracy of this forecast. If this holds true the City's Expenses will have . . .
increased by
$22.98 million or 57.3%
in just 15 years while, Owen Sound's Population
reduced by 76 residents
during the same period
(population was 21,688 in
2011 and it is 21,612 today)
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| Expense Growth - Past, Present and Future source: Owen Sound Audit Financial Statements |
The Blue line shown on the graph above shows inflation
changed during the study period. If expenses had been held at the rate of
inflation the total expenses in 2023 would have been $52.1 million which is $7.4
million less that the $59.5 million that actually occurred. It's important to
note that the city only shows us part of the total expenses at budget time.
Expenses such as the water department are not shown. Since the 2025 Audit
Financial Statements are not yet available, the 2026 budget tells us that
expenses increased by $3,341,873 from 2024 to 2026. When we add this to
our 2024 projection of $60,147,002 we get an estimate of total expenses of
$63,488,875 which is slightly higner that our projection. This tells us that
expenses are growing slifhtly faster that what we predicted.
What's very important to understand is that the city's expenses grew by $11 million more than inflation.
So, why is this? When you examine the detailed breakdown of the expense growth we can see that there are three main contributors to this growth. They are:
Salaries and Benefits which grew by 38.4% or 8.2% greater than inflation;
Amortization grew by 70.2% or 40% greater than inflation, and
Materials and Supplies grew by a whopping 105% or 75% greater than inflation.
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| Growth of City Expenses Relative to Population Growth Sources: Statistics Canada, and Financial Statements |
The census is taken every five years. From 2006 to 2011 our population
contracted by 0.30%. During the same period city expenses grew from $35.0
million to $40.1 million or an alarming 14.66%. If our 2026 forcast holds
true then city expenses will have ...
increased by
$28.1 million or 80.3%
between 2006 and 2026, a 20 year period, while, Owen Sound's Population
reduced by 141 residents
during the same period
(population was 21,753 in
2006 and it is 21,612 today)
It is unreasonable to expect expenses to have been frozen at the 2006 level just because our population was shrinking As we all know, the cost of products and services go up a little every year. It is reasonable to expect our city to cap city expense growth at the same rate of inflation given that Owen Sound's population is relatively stagnant. Had this been the case from 2006 than Owen Sound taxpayers would have saved $10.9 million over the 20 years to 2026.
The Audited Financial Statements give us a high level of confidence in the results. However, as currently constructed they do not provide sufficient visibility for us to see how individual department budgets are growing. For example, the audited financials show us statements for "Recreation and Cultural Services" which includes the Library, the Art Gallery, the Bayshore and the Rec Centre. However, the city 's audited financial statements are currently structured to show only groups of departments, so the Rec Centre for example is lumped in with the Library, the Art Centre and the Bayshore under the heading of "Recreation and Cultural Services". Therefore we have no idea how any of these individual departments performed during the study period. Perhaps the city will change this to give taxpayers more visibility in the future.
To drill down on the out of control expense growth we can examine a few annual budgets to identify unusual growth patterns. The two departments that standout when it comes to excessive growth are: the City Manager's Office and the Art Gallery.
Art Gallery
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| Tom Thomson Art Gallery Expense Growth 2018 to 2022 source: Owen Sound Audit Financial Statements |
The graph above shows the cost to taxpayers for Art Gallery for a five year period from 2018 to 2022. We can see in this graph that the Art Gallery 's burden to taxpayers, during this five year period, actually grew by $220,482 or 77.3 %. In fairness it's important to note that that the Gallery's cost to taxpayers has level off at slightly less than the 2022 level as hown here.
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| The 2026 Art Gallery Budget |
City Manager
The city manager's office budget has traditionally been less that $280,000. In 2020 a new city manager was hired. In the five successive years Council repeatedly approved annual increases to his budget in the order of 40% per year resulting in the total budget growth of $501,684 or 195%. Take a look at the following graphics that pretty much speak for themselves.
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| City Manager Total Expense Growth Source: Owen Sound 2025 Budget |
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| City Manager's 2025 Budget Increase Source: Owen Sound 2025 Budget |
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| City
Manager's 2026 Budget Note the internal allocation that soften's the impact on the City Manager's but adds to another department |