Rapid rise in
spending threatens fiscal sustainability of B.C.
municipalities
Report shows operating costs grew 3½ times faster than population growth 2000-12
VANCOUVER, October 30, 2014 – The
Canadian Federation of Independent Business (CFIB) released a new report today
that reveals the vast majority of British Columbia’s municipalities have been
increasing their operating spending at an unsustainable pace since 2000.
The 7th edition of the B.C. Municipal Spending Watch
ranks 151 municipalities based on 2000-2012 inflation-adjusted operating
spending growth and the most recent spending levels per capita in 2012. The
worst ranked municipalities show inflation-adjusted spending far outpacing that
of population growth, and had higher than average operating spending per
capita.
The municipality of Stewart ranked as the worst
performer in this year’s report, while Lake Cowichan was best. None of the
provinces’ largest cities (population of 25,000 and over) were able to keep
their spending to sustainable levels, with West Vancouver, Langford and
Penticton being particularly poor performers. That being said, Penticton has
recently taken steps to better control its spending. Vancouver and Victoria are
ranked 86th and 105th, respectively, in this year’s report.
“Far too many municipalities have charted an
unsustainable course over the past dozen years. Thankfully, some mayors and
councils have tried to curb their spending habit. But the rest seem to be okay
with washing their hands of it, leaving the issue for future generations of
municipal leaders to deal with,” says Richard Truscott, Director of Provincial
Affairs.
BC’s population grew by 15 per cent from 2000 to 2012
while total inflation adjusted municipal operating spending rose by 55 per cent,
three and a half times faster. Only 8 out of 151 municipalities kept their
operating spending in line with inflation and population growth.
“A B.C. family of four could have saved on average
$8,356 in municipal taxes over the last 12 years if municipal councils had kept
their operating spending to the rate of inflation and population growth,” adds
Truscott. “Spending growth of this magnitude is simply unsustainable.”
“Those mayors and councillors who are spending within
their means, including controlling the growth in salaries and wages for
municipal employers, should be praised for their efforts,” says Truscott. “When
local governments keep their spending under control, both small businesses and
residents reap the benefit by not getting stuck with tax hikes.”
The CFIB report makes a series of recommendations to
enable municipal governments to better control growth in operating costs,
including: limiting spending increases to the rate of inflation and population
growth, conducting formal core service reviews, increasing fiscal transparency,
and adopting sustainable wage growth policies.
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