KITCHENER -- Cambridge city council has approved its 2021 budget, which includes a 1.27 per cent tax increase.

The budget was approved at a meeting on Wednesday night.

In a news release, council said the increase will cost the average household $17.95 a year. Water utility rates will remain the same in 2021.

“This is a sensible budget that reflects our current financial circumstances due to the unprecedented and challenging situation we have found ourselves in this year,” Mayor Kathryn McGarry said in a news release. “Throughout this process, our mission has been to lessen the tax burden on our residents and to support the road to economic recovery.”

The city said the budget includes $70.9 million investments for new infrastructure and growth.

The city lost revenue due to cancelled and revised programs and unexpected costs in the COVID-19 pandemic. Council approved a cost containment plan on Wednesday night to minimize that financial burden. Councillors have also advocated for emergency funding from both the provincial and federal governments, and that funding have allowed them to approve a "modest budget" for 2021.

City officials said they will continue to focus on emergency and pandemic preparedness, community well-being and supporting local businesses.