Vancouver councillors are mulling a five per cent hike in property taxes next year, an increase municipal staff claim is required to “maintain existing services.”
The proposed increase is outlined in a draft of the 2023 budget, presented to council on Tuesday, and covers funding additions of one per cent for infrastructure renewal, two per cent for policing services, and two per cent for the remainder of municipal services.
If approved next year, it will cost the median residential property owner an estimated $99 per year and the median business about $256 per year. The total draft operating budget is $1.9 billion, up 9.5 per cent from 2022.
“I think what we’re recognizing is that residents want to ensure they’re getting quality services, value for their tax dollars and the money is being spent well,” Coun. Sarah Kirby-Yung told Global News. “I think this council is going to take its time to do that due diligence.
“We do not have to approve a budget until March and I will say I think there’s a lot of work to be done to ensure we have the right balance moving forward.”
The budget deliberations come at a time when many residents are struggling with increased costs of living, including record-breaking gas prices and soaring food prices.
They also come after back-to-back property tax hikes. Vancouver’s previous mayor and council approved property tax hikes of 6.35 per cent and seven per cent in 2021 and 2020, respectively.
“The budgets are coming in line with inflation. This is the challenge that previous governments have let this government be challenged with financially,” said former Vancouver councillor George Affleck.
“Five per cent property tax increase plus service fees and all those other things that come along — this is not five per cent, this is $300 million we’re talking about that have to come from somewhere, and mostly, the taxpayer.”
Sim and his ABC Party campaigned on a promise to hire 100 new mental health nurses and 100 new police officers and hold a commanding majority on council that includes Kirby-Yung. The Vancouver Police Department makes up more than 20 per cent of the city’s overall budget.
Carson Binda, B.C. director for the Canadian Taxpayers Federation, urged Sim’s council majority find other ways to fund that commitment than through increased taxes.
“This increase in the tax rate is just going to make finding homes more expensive for Vancouverites,” Binda told Global News.
“It’s a slap in the face for bureaucrats and politicians to be musing about raising our taxes while the rest of us are having to tighten our belts.”
In its draft budget, the City of Vancouver estimates a five per cent-increase will cost the average residential strata unit owner an extra $58 over 2022 and the average single-family homeowner another $152, with estimated property tax totals in 2023 of $1,218 and $3,204 respectively.
Property taxes fund approximately 58 per cent of Vancouver’s operating budget. The draft notes that the city “does not generate higher property tax revenues as a result of rising property values.”
Vancouver’s “Long-Term Financial Sustainability Guidelines,” as outlined in the document, project property tax increases of seven per cent on average between 2023 and 2027.
Next year, the draft estimates that user fees for parks programs will also increase three per cent as the city recovers from pandemic financial woes, while utility fees are projected to increase 7.9 per cent due to water and sewer infrastructure renewal and costs “pass to the City by Metro Vancouver.”
Kirby-Yung said previous councils have traditionally kept taxes low, contributing to an $800-million infrastructure deficit that municipal staff identified last year. It’s too early to “commit” to the five-per cent increase, she added, acknowledging that the baseline draft budget does not fully fund police and firefighting services.
“I’m not going to speculate on the tax increase. We’re going to do the due diligence and see where we end up,” she said.
“We do know that we’re facing increasing cost pressures … We’re in an environment of increasing inflation but we also want to make sure that we try to keep taxes reasonable because we know affordability is a real challenge.”
The municipality will engage the public on the budget in January and February, and approve a budget by the end of March. Kirby-Yung said councillors will be asking lots of questions and looking for efficiencies in the budget, including savings from building upgrades, better permitting and more efficient regulations.
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