Vancouver council likely looking at 5% tax increase for 2021

Vancouver councillors are focused on keeping next year's city property tax increase under five per cent, as they voted on earlier this year.

The question is how they get there.

"When you have a pandemic and health crisis and you're honestly dealing with life and safety issues, it gets pretty real pretty quickly," said Coun. Sarah Kirby-Yung, who said she would be bringing up options for reducing non-police or firefighting staff as part of the city's $1.6 billion budget, to be voted on next month.

Coun. Christine Boyle advocated for a different approach. 

"My priority is maintaining important services, particularly for our residents that are struggling most and making sure we're not laying off staff in the midst of a pandemic," she said. 

Council will receive an interim report on Wednesday from staff, explaining the choices councillors will face when they vote on the budget next month. 

No 12% increase

Staff say if property taxes were frozen, there would be a funding gap of around $60 million in next year's budget, due to increases in staff wages, new priorities from council and expected decreases in revenue stemming from the pandemic. 

That would amount to a 12 per cent property tax increase — but since council explicitly asked staff to keep the increase under five per cent after last year's contentious budget, the current proposal is to fill the shortfall from the city's emergency reserves and freed up money from deferred capital projects.     

"Certainly nobody's talking about a 12 per cent increase," said Boyle, responding to a tweet from fellow councillor Melissa De Genova. 

"The councillor circulating that number and the kind of fear mongering happening around it, I think it's irresponsible and certainly very unhelpful in a difficult series of decisions."

"The report clearly is not suggesting a 12 per cent increase," added councillor Sarah Kirby-Yung, adding she was eager to find ways of bringing the increase below five per cent. 

"People have been feeling the cumulative impact that it's more and more expensive to live in Vancouver, and you can't just look at taxes in isolation." 

'We have to adjust'

The provincial government has allowed cities to take on debt for one year and to move money from reserve funds more easily, and allocated $540 million for local governments as part of its economic recovery plan. 

Most cities, including Vancouver, have temporarily laid off staff and suspended some services as a result of the pandemic.  

Kirby-Yung believes the city should continue to budget conservatively going forward, because there's no guarantee that revenues from services like community centres and cultural centres will rebound.

"We have to adjust," she said. 

"What I haven't seen in the budget [proposals] really is any options around looking at cutting administrative expenses, around additional capital projects that could be postponed even more, around looking at not filling staff vacancies … in non-front-line positions."

Boyle disagrees that staff reductions are necessary — though she supports exploring transferring money from the police department's budget to other services — and hopes a compromise can be reached. 

"My priority is that we don't cut services people rely on and that we continue to make needed investments in climate and in housing and … maintaining our infrastructure rather than pushing all of those costs off to your generation," she said. 

"So figuring out how we do that within a window of around five per cent will be the challenge."