Surging municipal spending driving up property taxes in B.C.: Business Council

At a time when the economy is in decline and people are struggling to make ends meet, a new report is shedding light on city spending — and it’s not good.

Data from the BC Business Council (BCBC) finds 78 per cent of municipalities province-wide increased inflation-adjusted spending faster than the growth of population between 2013 and 2023. That’s resulted in $3.6 billion in excess spending.

It found property taxes for homeowners rose 94 per cent from January 2010 to July of this year, adding that’s more than double the rate of inflation and nearly double the rate of property tax inflation at a national level.

“Over the past decade, municipalities have spent $834 per capita more than what municipal population growth and CPI inflation would suggest is warranted. Most of the ‘excess’ spending has been on ‘core’ responsibilities like policing, sanitation, parks, transit, and administration. Meanwhile, spending on non-traditional responsibilities such as health, housing, and social services has skyrocketed, despite these areas traditionally being of provincial responsibility,” explains Jairo Yunis, BCBC’s Director of Policy.

The council says the report should raise the question of whether the province and municipal governments are duplicating payments for services, like health and housing, which it describes as inefficient.

“Unless residents and businesses are seeing exceptional improvements in service quality, municipalities appear to be becoming less efficient in delivering core services over time. It is also possible they have become distracted by scope creep into areas of provincial responsibility,” said David Williams, the council’s Vice President of Policy.

The BCBC is making five recommendations to rein in spending.

• Anchor municipal spending growth to population and inflation
• Reinstate an auditor general for local government
• Establish clear benchmarks for service improvements
• Review municipal responsibilities to reduce duplication with other levels of government
• Review Metro Vancouver’s governance and spending

Outside the Lower Mainland, smaller communities saw disproportionate increases. Tofino, Comox, Vanderhoof, and Armstrong recorded spending growth more than twice as fast as their population, according to the BCBC. While in places like Fort St. James, operating spending grew despite the population declining.