The City of Vancouver’s finance team is projecting a total property tax increase in 2026 of seven per cent but warns “a number of material risks or unknowns” could impose additional costs over and above that projection.
A staff report that goes before city council June 18 says increases in costs to maintain existing service levels in 2026 is driving what could be a property tax hike in the five to six per cent range.
Additionally, staff are conducting their number-crunching exercise on prior direction from council to incorporate a one per cent increase in property tax to address the City’s infrastructure deficit, bringing the total hike to seven per cent.
“While the rate of consumer price inflation has moderated relative to recent years, the City’s costs to maintain existing service levels continue to increase at a rate exceeding [Consumer Price Index] inflation,” the report said.
Historical under-investment in renewal of critical infrastructure and amenities, coupled with increasing cost of construction, “present a significant demand on property tax and utility fees to fund the continuing serviceability of the City’s assets,” the report said.
2.2% CPI increase
The Conference Board of Canada has forecasted a 2.2 per cent CPI increase for Vancouver in 2025 before stabilizing to an average of two per cent per year over the 2026–29 period.
While the general CPI trend over the next five years is a return to lower inflationary levels, staff is forecasting higher rates of City-specific inflation due to factors including salaries and benefit costs.
Those costs form the largest component of the City’s expenditure budget and will increase commensurate with settlements reached with several unions representing City employees.
Those settlements provide for general wage increases of three per cent in 2026.
“Of note, several bargaining units, including units comprising police officers and firefighters, have not concluded collective agreements for 2026,” the report said. “Those settlements could be impacted by collective agreement patterns regionally and nationally.”
Other factors driving increases to the budget:
• Non-salary compensation-related costs are projected to grow at rates above forecasted CPI inflation, including extended health and dental benefit costs, which are anticipated to increase within the range of 10 to 25 per cent.
• Significant increases to the levy imposed by E-Comm 9-1-1 services, higher technology renewal costs and the full-year impact of investments approved by council in the 2025 budget, including body-worn cameras for the Vancouver Police Department.
Taxpayers will also face hikes in utility fees, which are estimated to increase by approximately eight per cent annually on average over the next five years.
'Significant negative impact'
That increase is driven by higher Metro Vancouver regional utility charge forecasts and increased requirements for replacement and maintenance of sewer, water and solid waste infrastructure.
Recent global economic volatility and introduction of tariffs have created a challenging environment for residents, businesses and governments, including inflationary pressure on the price of some goods as well as threats to overall economic output locally and nationally.
“Current economic conditions are also having a significant negative impact on the viability of development and construction activity, which has corresponding implications for the delivery of new housing and job space as well as the City’s development-related revenue streams,” the report said.
The staff report that goes before council next week serves as a starting point for the City’s finance team to begin the work of building the budget, which Mayor Ken Sim and the 10 city councillors will finalize in December.
Council approved a tax hike of 3.9 per cent for 2025, which followed increases of 7.28 per cent and 10.7 per cent in the first two years of Sim’s administration. The June 18 council meeting at city hall begins at 9:30 a.m.
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