Tag Archives: Municipal Councils

Vancouver keeps tax hike modest in 2012 budget

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Vancouver has joined other cost-conscious municipalities in the region by passing a 2012 budget with a modest 2.8-per-cent tax increase.

That’s in line with the generally smaller increase many other cities passed this year, with Richmond and North Vancouver only allowing 2-per-cent increases, and Surrey and Langley City sticking close to 3 per cent. Port Moody, with just over 5 per cent, is the highest to date.

“It’s clear most municipal councils are working very hard this year to stick to the rate of inflation,” said Jordan Bateman, a former Langley councillor who is now with the Canadian Taxpayers Federation. “It’s still growing but it’s better than past years.”

He said he thought councils were recognizing that people were hit hard last year by other tax increases on their property-tax bill, like that of TransLink, and they wanted to give everyone a break.

Vancouver’s increase was slightly higher than the staff proposal of 2.5 per cent, after a small addition to the budget late Monday night for a $2-million “innovation fund.”

The fund will give the city a little pot of money for projects where a small contribution might pull in bigger dollars from other governments, businesses or charities.

“This is an initiative to allow us to explore new ways of paying for city services,” said Councillor Raymond Louie, who chairs the finance committee. He said that, in the past, the city has looked at either raising fees and taxes or cutting services as the only options.

That means the Vancouver budget for 2012 will be $36-million more than last year, for a total of $1.127-billion. Homeowners will pay slightly more than 2.8 per cent in extra taxes, because of council’s decision to shift a small portion of the tax load away from businesses and onto residents.

About $8.5-million will be spent on hiring new police officers, after a freeze in the past two years on filling vacant positions. However, the city is eliminating 89 other positions elsewhere, most of them currently vacant and requiring no layoffs from the work force of about 6,650.

Mr. Louie said the newly created innovation fund will be targeted to economic, social and environmental projects, although he personally would like to see it used for social projects like housing or daycare.

A recent example he cited was the electric car plug-in program, where a $70,000 contribution from the city brought in $800,000 from other parties.

The budget process drew little public attention, in spite of the fact that the city’s own surveys showed a huge spike this year in the number of people who think they pay too much in city taxes.

The city tax bill, counting both taxes and utility fees, for an $800,000 house, will be about $2,460, $130 more than the previous year. For a commercial property assessed at $800,000, the tax bill will be about $7,570, about $210 more than the previous year.

Council’s two Non-Partisan Association councillors and its Green Party member complained that the budget documents didn’t have enough information for them to make a good decision.

Green Party Councillor Adriane Carr did try to get more money put in at the last minute for more firefighters but was unsuccessful.

The mayor said the budget protected core city programs in spite of having to be trimmed considerably from earlier projections.

“Even in the midst of a challenging economic climate and a $52-million budget gap, we’ve delivered a budget that is balanced, progressive and pragmatic,” Gregor Robertson said in a news release issued by the city.

 

http://www.theglobeandmail.com/

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Canada’s Supreme Court upholds municipal taxing powers

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OTTAWA—In a decision that will no doubt be welcomed by city councils facing tough budgeting decisions, Canada’s high court has rejected a bid by a B.C. paper company to reduce its municipal tax bill.

Municipal councils don’t have “carte blanche” to tax their citizens, but the power of courts to overturn tax rates set by these councils is very narrow, the Supreme Court of Canada says.

Catalyst Paper Corp. had fought to overturn the municipal taxes imposed by North Cowichan council. It is the biggest industry in the Vancouver Island municipality.

In rejecting Catalyst’s appeal, seven high court judges reinforced the broad power of elected officials to balance business and residential taxes as they see fit, according to provincial laws.

“Municipal councils have extensive latitude in what factors they may consider in passing a bylaw,” wrote Chief Justice Beverley McLachlin for the unanimous panel.

She said councillors “may consider objective factors,” such as how much water or other municipal services are consumed by a business. “But they may also consider broader social, economic and political factors that are relevant to the electorate.”

The decision says councillors, not courts, are in the best position to weigh all the competing considerations and they deserve deference by judges.

Catalyst, the largest manufacturer of specialty paper products in western North America, had argued it bears too big a load of the overall municipal tax burden.

According to local news reports, Catalyst’s 2010 tax bill was $5.5 million and its 2011 bill was about $5.4 million. The company is also facing global debt and market losses that puts about 500 local jobs at risk.

As the population on the southeastern shore of Vancouver Island has grown, subdivisions have sprung up, and so has the need for roads, water lines, schools, hospitals and other municipal services.

Residential property values have soared, while the value of the Catalyst property has remained stable.

However, the municipality, not wishing to hit long-term fixed-income residents with massive tax hikes, was for years increasing the relative tax burden on Catalyst to one of the highest in the province.

In court, Catalyst argued it has its own sewer and water systems and its own deep-sea port, and its operation has been losing money.

It says it’s footing a “grossly disproportionate” part of the property tax bill and cannot just pick up operations and move.

“Its choices are to stay and pay or to close the mill,” said a court summary of Catalyst’s arguments.

Since 2003, the town has reduced the rate on Catalyst slightly. In 2007, Catalyst paid 48 per cent of the total municipal tax burden. By the time the case was heard, that was down to 37 per cent, but not as much as Catalyst demanded. It argued taxes should be related to municipal services consumed.

The company’s challenge of a municipality’s right to pass what it called an “unreasonable” bylaw met with defeat B.C’s trial and appellate courts.

In agreeing with those lower rulings, the Supreme Court’s decision distinguished between taxes and “fees” for services.

It said the delivery of services could be “a factor” but it is up to a council to weigh against competing considerations.

The high court said the council, unlike a court, is not obliged to give reasons for taxation decisions.

 

http://www.thestar.com/

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