Ed Des Roches, Special to the Sun
Sun
Cities and towns throughout British Columbia are in the process of setting their municipal budgets for 2007. It’s the annual balancing act, weighing potential revenue against a growing demand for municipal services.
In Vancouver, the formula for raising revenues hasn’t changed much in more than two decades. The majority — 64 per cent — of revenue comes from property taxes, with 55 per cent of that coming from the commercial sector and the balance of 45 per cent coming from resident properties. In 1984 the ratio was 60 per cent for the commercial sector and 40 per cent residential.
Remember the pre-Expo 86 days when Vancouver had lots of head offices, but hadn’t yet been “discovered” as an ideal city in which to live? Twenty-six years later, the head offices have left in droves, industry has moved outside the city limits, and the amount of housing has exploded. The property tax ratio inequity still hasn’t been addressed.
A group that is really feeling the pressure of an outdated property tax structure is the small business sector, most of which are owner-operated. That’s the same sector that employs the majority of Vancouverites, shapes the character of neighbourhoods shopping districts, and fights desperately to survive the competition with national and international business.
Vancouver business owners pay six times the municipal property taxes paid on comparably valued residential properties — the highest ratio in Canada and double that paid in neighbouring municipalities. Yet we consume less than a third of total municipal services — ranging from water, sewer and garbage collection to parks, community services and civic theatres — but we subsidize 50 per cent of every dollar of municipal services consumed by Vancouver residents.
No one wants to pay more property tax, but the reality is that year after year, Vancouver increases its annual budget without considering the effect on local businesses.
The city’s budget in 2006 was $810 million. Council and staff are now recommending an increase of between $23.4 million and $30.5 million, resulting in a 4.9 to 6.3 per cent property tax increase. For a residential property worth $700,000, that could mean another $112 — less than $10 a month — on the $1,863 paid in 2006. For a business property of the same value — but using fewer services — it’s another $650 on $10,838.
Business owners don’t want special treatment, but we do want to be treated fairly. We simply cannot continue to subsidize Vancouver residential property owners if we are to continue to invest in our communities, provide local jobs and earn a living for our families.
We’re not asking for much.
We want a cap on 2007 property taxes to 2006 levels. No reductions: Just the same as last year.
We want a long-term policy to address an unfair and unsustainable tax ratio. And we want council and staff to take greater responsibility for finding fair and innovative ways of providing the services we all need and are willing to pay for.
According to the city’s website, there are only two options for balancing revenue and spending: Cut services or increase taxes.
We think there is a third: Do things better and more cost-effectively.
Ed Des Roches is co-chair of the Vancouver Fair Tax Coalition.
© The Vancouver Sun 2007
