Media Release

BC Municipal Spending Soaring – Unsustainable
Operating spending almost double population and inflation growth since 2000
June 4, 2008

Vancouver – In its first annual BC Municipal Spending Watch released today, the Canadian Federation of Independent Business found growth in municipal spending is out of control: Overall municipal spending in BC increased by 36 per cent between 2000 and 2006—1.8 times more than the 20 per cent increase that would have occurred if spending had been held to population and inflation growth (see figure in backgrounder).

In dollar terms, this is $502 million of overspending in 2006 alone. “The bottom line for taxpayers is municipal spending is causing property taxes and fees to increase faster than our ability to pay. It’s time to start asking some tough questions about what’s going on because it’s just not sustainable,” said Laura Jones, Vice President of Western Canada. “If municipal governments had controlled spending, property taxes could have been roughly 17 per cent lower than they are today. What would you do with 17 per cent off your tax bill?”

Property taxes, the biggest source of municipal revenue, increased 33 per cent between 2000 and 2006 compared to inflation and population growth of 20 per cent. Fees, which also generate significant income for municipalities, increased 83 per cent over the same period. The biggest increase in revenue came from other levels of government, which is up by 110 per cent since 2000.

The report shows substantial increases in municipal operating spending since 2000 for every major municipality in BC. It also shows a wide range in the level of per-capita operating spending by municipalities (see attached backgrounder detailed breakdowns).

Recommendations include that a complete review of current spending and passing laws to limit municipal operating spending and taxation to population and inflation growth. “Our most general recommendation is that municipal leaders get a handle on what is going on. Families and small business owners know how to control spending and make tough tradeoffs, it’s time for overspending municipalities to learn to do the same,” said Brian Bonney, Director of Provincial Affairs.

The full report can be accessed at www.cfib.ca. For more information or to arrange an interview, contact Nicole Nash at 604-684-5325.

CFIB is Canada’s largest association of small and medium-sized businesses, representing more than 105,000 business owners who employ 1.25 million Canadians and account for $75 billion in GDP.