When B.C.’s local government leaders gather in the provincial capital next week, they’ll tackle the heady issues of oil-tanker traffic, cannabis laws and shark-fin soup. But the core debate will be on a pragmatic topic – taxes.
The mayors want to pry new sources of revenue from the province, saying they need to deal with growing costs from provincial and federal offloading.
But the province says municipal spending needs to be reined in before the door is opened for new taxation powers.
The annual meeting of the Union of B.C. Municipalities begins Monday with a debate on how community services are funded, and what alternatives to property taxes should be made available.
Bill Bennett, the Minister of Community, Sport and Cultural Development, said Thursday he’s sympathetic and willing to look at new revenue agreements, but cautioned that the rise in local government spending over the past decade undermines the mayors’ case.
The Business Council of B.C., in a policy paper in May, compared the provincial government’s rate of spending to that of the 21 Metro Vancouver municipalities. After adjusting for inflation and population growth, the local governments increased spending by an average of 32 per cent.
Provincial spending increased by 10 per cent in the same time period – between 2000 and 2010. The analysis is based on operating costs, not capital spending, so it takes the infrastructure issue out of the equation.
“Unlike the case of the B.C. government, overall municipal spending in Metro Vancouver has been largely immune from visible fiscal restraint,” the report concluded.
Greg Moore, mayor of Port Coquitlam and the UBCM executive’s representative for Metro Vancouver, said the federal and provincial governments are responsible for some of the cost drivers, and need to share in the solutions. “Yes, spending has been higher than the rate of inflation, but that is due to external pressures primarily from the provincial and federal government putting in more regulation,” he said.
Municipal leaders are proposing new sources of revenue, such as taking a share of the carbon tax to pay for transit, or getting a slice of the provincial sales tax.
“We need to have that conversation about what makes the most sense,” Mr. Moore said. “If there are added requirements on government to do more things, then maybe more resources need to come with it.”
Mr. Bennett agreed that infrastructure costs need to be addressed on a more consistent basis. But he added: “It undermines the strength of their position on infrastructure funding when many of them are allowing their expenses to go up so quickly.”
The mayors cannot blame other levels of government entirely for cost pressures. Many Metro Vancouver municipalities have settled labour agreements with their workers, providing salary increases of up to 18.8 per cent over five years, more than double the rate of inflation and more than double the rate of increase for provincial government workers over that time.
As well, politicians at all levels of government acknowledge a sense of taxpayer fatigue that makes new or higher taxes a tough sell.
The mayors will find safer waters politically when they debate the merits of decriminalizing marijuana, the risks of increased oil tanker traffic, and other topics that are largely outside their responsibility.