Here is a key question now for all the victors in the Oct. 15 municipal elections: What is the plan for paying for all the campaign promises you made?
The parties and officials newly elected to mayoral office – including A Better City’s Ken Sim in Vancouver and Surrey Connect’s Brenda Locke in Surrey – have been quiet on the issue ahead of Nov. 7, which is when they assume office. Neither had responded to requests for comment as of press time.
But municipal politics observers say quick, dramatic change funded by major changes in local budgets is unlikely – no matter how ambitious the promises made during election season are – because, as the level of government most directly affecting citizens’ services and fees, municipal government finances are designed to be stable – or, in other words, inflexible.
“Rightly or wrongly, the way it has been set up does not encourage a lot of revenue-seeking [for municipal governments],” said Peter Hall, professor of urban studies at Simon Fraser University, an expert on local economic development who previously worked for local government in Durban, South Africa. “There are good reasons not to encourage municipalities to – for instance – not pursue a sales tax or have their own income tax.
Funding – other then grants from other levels of government – usually comes from moving it from another service, and that
usually only happens on the margins [of a budget].”
For cities like Vancouver, most of the revenue comes from property taxes and fees. Vancouver’s 2022 budget lists 58 per cent of its operating revenue (totalling $1.75 billion) as coming from property taxes. Another 20 per cent comes from utility fees, and licence fees (five per cent), parking (four per cent) and program fees (four per cent), which, combined with property taxes, account for 90 per cent of the city’s revenue.
Those percentages do not deviate much from the figures in budget 2021 or budget 2018 (the last budgets approved by the administrations of the last two Vancouver mayors: Kennedy Stewart and Gregor Robertson).
On top of that, municipalities in Canada can borrow money only for capital costs – not operational costs – and even that channel is severely limited by provincial regulation. Hall added that even the fees collected on things such as utilities are based on prices set by other service providers – and, as such, municipalities are seldom at liberty to adjust rates to affect revenue.
“I don’t want to dismiss the intention and the value of the aspiration of local governments wanting to be more active,” Hall said. “But our system is not set up to allow – and certainly not to encourage – expensive entrepreneurial action by municipalities.”
Sim’s ABC party scored a landslide victory in Vancouver’s 2022 municipal vote. It won the mayoral seat as well as seven of the 10 council seats. The new mayor had promised during his campaign to add 100 new police officers and 100 mental health nurses to the city as soon as possible to deal with increasing public safety concerns, but so far has provided few details on where the funding for the initiative – estimated at about $20 million a year – would come from.
Under predecessor Stewart, funding increases to Vancouver’s police, fire, social and environmental programs came with an average of about five per cent annual increase in property tax rates (with the latest budget hiking rates by 6.35 per cent). But
Sim has promised to deliver on ABC’s promises without raising property taxes.
Allan Tupper, professor of political science at the University of British Columbia, said that while governing is always about give and take within a set budget, Sim and ABC are under pressure to make visible changes because of the way they won the election.
“When people have a full-slate vote – where you have Sim, Sim’s councillors, Sim’s park board and Sim’s school board – people are going to expect action,” said Tupper, who is a widely published researcher on Canadian public policy, government and comparative public management. “He’s not in a situation where he can say, ‘We need an immediate X-per-cent increase
to property taxes and fees.’ So if he needs money, he’ll probably have to take from other sources, and there’s not a lot of capacity to generate revenue.”
One X-factor in the dilemma of funding new municipal governments’ initiatives, touched on earlier by Hall and echoed by
Tupper, is grants or other funding sources from either Ottawa or the provincial government.Sim met with federal Minister
of Public Safety Marco Mendicino days after the municipal election, tweeting that he “appreciate[s] the partnership” that Sim’s administration is building with Ottawa.
Those types of relationship, Tupper said, will be key if Vancouver wants to see quick action on post-election changes.
“You’ve got to have coalitions,” he said. “You have to get along with the provincial government very well, and you’ve got to increasingly deal with Ottawa. You are going to have all sorts of things driving expenditure [on the municipal level], so Sim has got to show he has the capacity to work together with other levels of government.
“That was an undercurrent of concern about former mayor Stewart. He had difficulty building these things. And those links
have to be rebuilt. You have transit concerns, roads, fire and police and all that stuff ... You have to keep as many groups on-side as possible.”
Tupper added that the macro-environment in Ottawa and Victoria may be favourable to that end, with Prime Minister Justin Trudeau’s agenda on climate change looking to engage municipalities on projects like transit. Meanwhile, B.C.’s new incoming premier – David Eby – may be more amenable to funding requests if the provincial NDP hopes to gain or maintain support from Metro Vancouver ridings.
Barring inter-governmental funding, however, Hall warned that people expecting quick change may be disappointed –
or should otherwise be prepared to see a corresponding cutback when new spending measures are introduced.
“It’s fine to expect more of something, but the response is to expect less of something else,” he said. “A well-run council can make such a difference in terms of local quality of life ... but if you put more money in one place, it’s going to come from somewhere.”
