Ron Matin
Recently, the Vancouver City Council approved a dramatic 10.7% increase on the average property tax. The final decision on the City of Vancouver’s 2023 operating budget & property tax hike originally was planned to be conducted during a public hearing next week.
However, the City Council was able to get through a shorter-than-anticipated public speakers list and debate suggested amendments before the end of a night meeting.
Value changes
The property tax increase of 10.7% is exactly 1% more than the 9.7% increase proposed by City Staff the previous month. The common property tax increases, according to City Staff, are estimated to be all of the following:
- $124 for a condominium or strata unit (assessed at: $759,000)
- $213 for all residential properties (assessed at: $1.3 million)
- $326 for a single-family home (assessed at: $2 million),
- $549 for a business property (assessed at: $1.1 million)
Operating budget for Vancouver
The City of Vancouver’s operating budget in 2023 will climb to an astonishing $1.97 billion. This is all thanks to the property tax increase, which went up from $1.75 billion in 2022. Which marks one of the greatest year-over-year increases ever. This should not be confused with the separate capital budget established by the City Council, last year for the construction of new facilities and infrastructure.
The new increased budget will pay towards the economy’s significant cost inflation, and compensation increases for City employees )under upcoming collective bargaining agreements and additional funding for the Vancouver Police Department (VPD). This includes new police officers, the requirement to replenish the municipal government’s depleted emergency contingency fund reserve, and, the acceleration of the replacement of aging infrastructure, particularly sewers.
The decision from the Vancouver-led City Council to surpass 9.7% and enter double digits is mainly focused on enhancing the fundamental duties, and core services connected with the local government.
Expenses for Vancouver
The highest new additional expense added by Vancouver during budget discussions was the $4.2 million for 33 additional firefighters. The volume of calls received to respond to situations related to the rising mental health, and addiction epidemic has severely strained fire rescue services. A further $3.6 million will be allocated to the VPD. With $1.2 million going towards communications, and evidence management technology. Another, $450,000 towards extra community policing, and $200,000 going towards a trial program to test the use of body-worn cameras by officers, which was a campaign promise. Other budget items included, have a:
- $1.8 million for snow clearing reallocated from reserves,
- $1 million for additional road maintenance, pothole repairs, and horticulture,
- $400 000 to meet the provincial government’s new accessibility requirements, including the hiring of a new language specialist,
- $186,000 000 for additional cleaning of public spaces,
- about $100,000 000 for Vancouver Public Library to hire one worker to provide staff training in crisis prevention and intervention,
- and $100,000 000 to enable City staff to re-skilling to increase the number of qualified employees.
During the conversations/discussions it was mentioned that they will continue to search for cost savings, identifying items the City shouldn’t be spending money on, efficiencies, and new income sources.
Companies & Property Tax
Whilst, the effects and impacts of property taxes on individuals often receive the most attention; companies have been hit by cost pressures on all fronts. This is because property taxes are passed on to them by the landlords as part of their rent. Vancouver has historically had quite a difficult time with the property tax climate for businesses, however, things have improved over the years as some of the property tax shares have been transferred to citizens.
Vancouver should encourage entrepreneurship rather than add to the already unfair tax load that firms already bear. Future growth of this level is unsustainable for small and medium-sized firms.
Conclusion
People should also note that the City Council only decides how much of the property tax paid by households, and companies goes to the City of Vancouver. About half of the property tax is distributed to the City of Vancouver, with the remaining half being levied and decided by other regional and provincial organizations.
This includes the following: TransLink, the Metro Vancouver Regional District, BC Assessment, and the BC Municipal Finance Authority. Overall, the effects are dramatic; and it will be interesting to see how it affects us in the long run.