British Columbia

Vancouver councillors pledge to lower 8.2% tax hike proposed for next year

City staff released a draft budget on Monday with $111 million more in proposed expenses next year, necessitating the tax increase. The estimated increase for a median single-family home (valued at $1.76 million) would be $354, once increases to utility fees are factored in.

But a majority will have to agree on what items should be cut or reduced in the 2020 budget

The City of Vancouver's proposed 2020 budget would add an estimated $354 to the property tax bill for a median single-family home. (Chris Wattie/Reuters)

A proposed 8.2 per cent property tax increase in the City of Vancouver is likely to be reduced as part of the city's budgeting process. 

"This is the highest increase in a decade. And I think that at some point we have to pause, take a look and say 'wait a minute,'" said Coun. Sarah Kirby-Yung.

City staff released a draft budget on Monday with $111 million more in proposed expenses next year, necessitating the tax increase. The estimated increase for a median single-family home (valued at $1.76 million) would be $354, once increases to utility fees are factored in.

The City of Vancouver's chart on how people's tax bill could change if the draft budget is proposed. (City of Vancouver)

But councillors can put forward amendments to reduce the increase by cutting spending for new items in the budget — and Kirby-Yung said she would be looking at ways of doing that.

"When we have a provincial government that has been stepping up a lot on things like modular housing and some of the other files, is it time for the city to dial back on some of its investments and really focus on the core service delivery to keep our taxes reasonable?" she asked. 

Kirby-Yung is a member of the Non-Partisan Association, which has five of the 10 seats on council. But Green Party Coun. Pete Fry also said he wanted to reduce the increase.

"There's a few 'nice to have' things in there ... but we all have to tighten our belts a little bit," said Fry. 

"I'm not incredibly comfortable with the idea of an 8.2 per cent increase ... given that wages aren't rising at a commensurate rate."

A special meeting on the budget is scheduled for Dec. 3. 

'We all have different priorities'

Fry acknowledged the question will be whether a majority of councillors can agree on what specific items should be cut.

"It'll be a bit of a balancing act, because we all have different priorities," he said. 

Just under half of the new spending is due to fixed costs that staff say are out of the city's control, but many items are programs council voted to support, including:

  • $6 million to develop a citywide plan.
  • $6.8 million to "accelerate action on climate change," including tree planting and funding to support more zero emission buildings in the city.
  • $4.1 million for affordable housing policies, including a new Tenant Relocation and Protection Policy, and money to "support the City's ongoing work on homelessness."
  • $2.5 million for more street cleaning services and improving park board services. 

In addition, $8.2 million for public safety — including hiring 25 new police officers and 30 firefighter staff — is proposed, based on a 2017 council vote approving a five-year plan for increasing resources. 

Higher taxes, but higher home values too

While the proposed tax increase is high by Vancouver standards, Canadian Centre for Policy Alternatives analyst Alex Hemingway believes it is mitigated by booming property values in the last decade, resulting in low taxes when calculated as a percentage of assessed home value. 

"We've lowered and lowered that property tax rate to compensate, to ensure that property owners aren't paying too much more in dollar terms. But there are real downsides to that approach," he said.  

Hemingway said it would be helpful if the province provided more flexibility on how it calculates property taxes but said the budget itself was sound. 

"We need all levels of government to step up to invest in things like housing, child care and the transportation infrastructure we need. That shouldn't sit solely on on the backs of cities," he said.

"[But] I don't think we should pretend that we don't have a reasonable tax base to to draw on to invest in these important areas.

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