Vancouver city councillors got a closer look Tuesday at a staff report warning homeowners could be on the hook for nine-per cent annual property tax hikes for the next five years.
Councillors received the 2024-2028 budget outlook and had the chance to quiz city staff over the projection, which would amount to an extra $116 per year for a median strata property, if the city’s fiscal position doesn’t improve.
And it comes on the heels of a 10.7-per cent property tax hike this year, after now-mayor Ken Sim said on the campaign trail that another 10-per cent hike was “not sustainable.”
The report cites a need for $730 million in capital spending, inflation, rising construction costs, a labour shortage and wage growth as contributing factors to the grim financial picture.
It also points to the need to pay for council priorities like the 100 new police officers and 100 mental health workers and the plan to revitalize Chinatown, both spearheaded by the new ABC majority.
“That projected nine per cent property tax increase is a staff projection, it is not direction from council and it is not the final property tax increase we want to see,” ABC Coun. Sarah Kirby-Yung told Global News Tuesday.
Kirby-Yung said she was confident the Mayor’s Budget Taskforce would return with potential saving opportunities and creative revenue opportunities that could help address some of the budget woes.
That task force, announced in April, includes a variety of third-party business and accounting experts Mayor Ken Sim said would go through the budget with a “fine-toothed comb” to find efficiencies. It is due to return its report in October, ahead of 2024 budget deliberations in December.
Kirby-Yung argued that the city was catching up from years of under-investment by previous councils, who had overspent to the tune of a quarter-billion dollars on areas she said should have been funded by provincial or federal money, such as child care or housing.
In 2021, under then-mayor Kennedy Stewart, Vancouver spent $168 million on affordable housing, $23 million each on child care and homelessness, and $4 million to fight the opioid crisis, spending that amounted to 15 per cent of the city budget.
“That was at the expense of investing in our own city of Vancouver infrastructure. It’s why we have aging sewer pipes that we’re not renewing quickly enough,” she said.
“So this is really about focusing the city budget on those services that are so important to quality of life … We’re doing all the work we can in order to bring that (tax hike) down to a reasonable number.”
Senior governments have stepped up in recent years with child-care funding, she said, while the city can do other things to help with housing that don’t affect the budget, such as contributing land.
Asked about the possibility of cuts to programs or services, Kirby-Yung deferred to opportunities for “efficiencies,” such as new technology to reduce permit backlogs, or to the possibility of boosting the revenue side of the balance sheet.
Green Coun. Pete Fry acknowledged the city is facing twin pressures of inflation and infrastructure needs.
But he said the new governing majority was also being forced to confront the budget impacts of its own policy priorities.
“This is one of the challenges when you have a new government and you’ve made a lot of commitments and promises for stuff that actually ends up costing a lot of money, and we knew a lot of these inflationary pressures were on the horizon,” he said.
“Some of us did recognize that making promises for big spends was not necessarily realistic, recognizing we were going to have to do some serious belt tightening already, so this is a bit of a case of chickens coming home to roost, but it is also is a reflection of just the actual cost of doing business now is increasing.”
Fry said the situation may force the city to consider more controversial revenue sources, like the proposed city-wide parking permit plan scrapped at the 11th hour by Stewart in 2021.
Former city councillor George Affleck agreed with Kirby-Yung that the city has been burdened by responsibilities downloaded by senior levels of government, but said it is a puzzle the current council will need to solve or face the wrath of the public.
“It’s too much and the taxpayers won’t put up with it … why do we never hear about these types of tax hikes in other cities?” he said.
“So far they are saying ‘yes’ to pretty much everything. They have not owned the budget in a way that I would want them to, say, is that their budget or is this still a Vision Vancouver budget from six years ago?”
At this point, nothing about next year’s property taxes are set in stone, with the staff report itself noting the nine-per cent figure is merely a “starting point” ahead of the 2024 budget planning process.
Residents will also have a chance to weigh in on that upcoming budget through Talk Vancouver surveys between August and September.
Comments