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Vancouver 2014 budget to include ‘moderate’ property tax hike

No matter which political party is ruling city hall, they all end up doing the one thing that hits taxpayers in their wallets: raise property taxes.
bike share
City council has until December to finalize its operating and capital budgets for 2014. At least $2 million will be spent setting up the city's public bike share program.

No matter which political party is ruling city hall, they all end up doing the one thing that hits taxpayers in their wallets: raise property taxes.

And, as a City of Vancouver staff report pointed out this week, taxpayers can expect “a moderate” tax hike in 2014 once city council approves the operating and capital budgets in December.

“I’m not going to give you a number because we’re trying to make it as low as possible,” said Coun. Geoff Meggs of the ruling Vision Vancouver party when asked how much more taxpayers can expect to pay.

But, Meggs said, the increase will not be more than the rate of inflation. Statistics Canada reported the country’s rate of inflation at 1.1 per cent in August. The city’s finance department tends to average the inflation rate over the year, bringing it closer to two per cent.

Last year, council approved a two per cent tax hike.

This year, council is facing up to $43 million in “expense pressures,” including $12 million in increased wage and benefit costs to city employees. That calculation, however, doesn’t include an unknown increase for police officers and firefighters, whose collective agreements haven’t been ratified.

Another big cost will be an $11 million increase in utility costs, which the staff report said will equate to a 4.5 per cent hike for taxpayers. Capital program costs such as fuel and leases amount to $9 million, the first year of an anticipated public bike share program will cost $2 million and $3 million will go toward the November 2014 civic election.

Though $43 million seems like a lot of money to cut, that amount will be offset by $28 million in projected revenue collected in 2014. So the real exercise for council will be to sort out how to pay for $15 million in increased costs.

Whatever the hike is, Meggs pointed out taxes have decreased under Vision Vancouver when compared to the previous NPA administration. Vision has ruled city hall since late 2008.

Figures supplied to the Courier from the city’s communications department showed taxes increased 17.76 per cent from 2006 to 2008 for residents. That’s when the NPA was in power.

When Vision won its first majority in November 2008, taxes increased 15.79 per cent from 2009 to 2011. The Vision council has argued, however, the 15.79 per cent number would have been closer to 13 per cent, had a city strike not occurred in 2007 and saved the city money in wages and benefits.

“Services are delivered by people and those have to be funded,” Meggs said. “Other services are paid for by users and those are covered by user fees. Year after year, the satisfaction with the quality of services is very high. We’ve got to maintain that and there’s a price to pay for that. It’s just the way it is.”

NPA Coun. George Affleck said Vision politicians continue to boast about efficiencies found in city services and keeping taxes to the rate of inflation. But, Affleck said, if savings are being made, then why do property taxes continue to increase while the city is again hiking utility fees, this year by 4.5 per cent.

“Shouldn’t property taxes, in fact, be going down?” he said. “These are the questions I ask every year and I, of course, don’t get any answers.”

Affleck said his latest reading of the inflation rate is 0.3 per cent. So to approve a tax increase of anything more than that percentage would not reflect Vision Vancouver Mayor Gregor Robertson’s campaign promise to keep taxes at or below the rate of inflation, he said.

“Basically, the rate of inflation is zero right now,” said Affleck, who was not a member of the NPA government when it raised taxes by 17.76 per cent from 2006 to 2008.

Council is expected to vote on the budget Dec. 17.