The headlines in today’s Vancouver Sun and The Province scream “BC Municipalities Put Sledgehammer to the Piggy Bank” or words to that effect. It really made me do a double take, as well it should! It is a good opportunity to talk about our taxes and statistics, and how correct statistics can be quoted correctly in a way to lead to viewer to make a wrong assumption.
It has been said during the campaign that the City’s salaries make up 80% of our taxes. Give and take a few percent it is correct. The implication is that that our City staff are paid too much. However, taxes make up less than 50% of our budget – when all our income, including transfer funds, is included, then salaries is a much smaller part of our total budget and within norms when compared to other cities similar to New Westminster.
One campaign platform document states that since I became mayor our taxes have gone up every year. Is that true? Well yes. But what is the context? I will discuss that further below.
New West is Best
The newspaper articles I mentioned earlier state that municipalities are spending four times faster than population growth. That statement is also correct but if you only read the headline, you will get the wrong impression as that is the average. The articles are based on the recently released fourth annual report of the Canadian Federation of Independent Business that provides full context of the statistics.
Interestingly the Report shows that in the category of cities with population over 25,000, New Westminster performed the best (see chart and table below). We are one of very few cities whose spending rose slower than our population growth!
But before we too quote statistics out of context and start gloating, the Report also states that our tax per capita is too high - and we are working on that.
So it is correct to state that our taxes have gone up every year that I have been mayor. But it is also true for every municipality in BC. Every municipality struggles with the increasing demand for services and amenities. As a smaller city, our per capita tax is higher than that of a larger city because we still have to provide the same core services but the level of taxation is still within the norms.
New Westminster Taxes
In the case of New Westminster, we lost many of our large industries with a result that our tax base was smaller and our neighbourhoods started to deteriorate. We recognized that in order to turn the city around, we needed to increase our tax base. This was not something that could be done overnight. It is like a big ship that has drifted off course, it takes a while to bring it back on course again.
We did not necessarily want bring large industries back, nor was it viable for them. Like other jurisdictions we looked at mixed commercial/residential developments and high-tech industries (techno-parks) as ways of building up our tax base again. Early discussions with developers made it clear that New Westminster was not “developer-friendly”. They liked the location and potential but not dealing with City Hall. It was clear changes were needed.
We have worked hard to identify and encourage new development that would build our tax base, but are “green”, sustainable and that contribute to liveability. As I have shown in many other videos and posts on the website, we have been very successful. Our projects have LEED certification, many have won awards for design.
While we have been bringing the huge ship back on course, our taxes have gone up, but still well within reason when compared to other cities. In the longer term, as the development projects result in increased business activity and higher population density, the per capita tax will come down.
Who Decides the Level of Taxation
Just who determines the city’s level of taxation? Is it myself, the Council? It is the task of the City’s Finance Department to prepare the budget which is presented to the Council for final approval. Before the budget is submitted for discussion by Council, it is reviewed by the Mayor’s Budget Focus Group that is made up of representatives from both the residents and the business community.
When the taxation statistics are taken in context it shows that the City has done a great job in being responsible about taxation.
