A massive tax hike could be on the way for Vancouver property owners.
With a $1.96 billion operating budget proposed by staff, the city's costs are expected to rise by over $200 million in 2023 compared to 2022. To cover that increased cost, staff has proposed a 9.7 per cent property tax increase. At this point it's a general levy, meaning how much the tax on each type of property (i.e. residential or industrial) will increase hasn't been determined.
"The property tax increase reflects the significant financial repercussions of the pandemic that included deferred investments as well as substantial use of reserve funds in order to manage revenue shortfalls and overall cost pressure," states staff in the report.
Staff estimate that to simply maintain the level of services Vancouver already has would require at least an 8.6 per cent property tax increase on average for the next few years, in part due to inflation, utility charge increases, and higher fixed cost estimates.
"Operating revenue and expenditures are projected to increase by an average of 7 per cent annually from 2023 to 2027," note staff in a report to council.
In addition to maintaining service levels, the draft budget includes increased funding for police and mental health services, for renewal of infrastructure, and to replenish reserve funds.
Among the costs fuelling the increased budget is new funding for new police officers and expanded mental health plans with Vancouver Coastal Health, which was part of Mayor Ken Sim's platform. Additionally, money has to be earmarked to cover the Vancouver Police Department's 2021 budget. Police services, including E-Comm, are expected to cost nearly $400 million in 2023.
The draft budget also includes $154 million for the parks board, $58 million for the library system, and $160 million for the fire department.
If the proposed tax hike happens, it will be the biggest in recent years; in 2022 property taxes went up by 5.7 per cent (in the draft it was 6.35 per cent), in 2021 they were capped at 5 per cent and in 2020 they went up by 7 per cent.
Other cities are looking at increased taxes as well, with Victoria considering a 6.96 per cent bump, a 5.88 per cent jump in Richmond, 3.99 per cent proposed in Burnaby, and Surrey considering a 9.5 per cent hike.
Prior to his election in October 2022, Mayor Ken Sim noted the expectation was for property taxes to increase by around 10 per cent, but that wasn't sustainable.
"Our intention is not to freeze property tax increases in our first year," he told V.I.A. adding that for future budgets he wants to do a more detailed analysis of the budget.
Council delayed a discussion about the draft budget from late 2022 to now to give the newly elected council time to go through the paperwork; nearly half of Sim's ABC-majority council are rookies, including Sim.
In late December Sim told V.I.A. his team was going through the budget with "a fine tooth comb" but that a property tax increase was likely due to "challenging situations" they were inheriting.
The draft budget will be discussed at a special council meeting on Feb. 28.
