Taxes and Local Governments

This week I am tackling a different issue altogether, which is very close to my heart because of what I do for living.

The Canadian Federation of Independent Business (CFIB) has just released a report on municipal tax trends with respect to business taxpayers in British Columbia stating that local governments operating expenses are too high in proportion to two factors: population and inflation growth. Business organizations have been lobbying the provincial government for some time to pressure local governments to reduce fiscal ‘burden’ on business and to introduce legislation, in fact, to do exactly that.

The Union of BC Municipalities has responded that the cost of local government is increasing but for good reasons. All local governments are dealing with an infrastructure deficit. Communities have deferred capital improvements for years in order to keep tax increases down, but can no longer afford to do so. Municipalities are also faced with increasing standards for things like water treatment, wastewater treatment and climate action. The majority of British Columbians agree with these higher standards – we want clean, healthy, sustainable communities, but better standards come at a higher cost. In addition, local governments have faced increasing pressure to take on new responsibilities in areas such as affordable housing or homelessness. Expansion of service also comes at a cost, in fact new costs.

From my perspective, CFIB is missing the point altogether. I am a pro-business individual. I believe that business, especially small business, has the innovative force to create progress, change and a better quality of life. However, CFIB has the wrong target. First of all, local government is the only government legislated to balance its budget. We cannot run a deficit and if, for some reason, it happens that municipalities cannot balance their books, there are dire consequences. The business community needs to ask why the federal and provincial governments are allowed to run a deficit. This creates a vicious cycle whereas more money is needed to cover the deficit and more taxes are raised to do so. For every 100$ collected in taxes by the three levels of government, $92 go to the federal and provincial governments and only $8 to local governments. And will get worse. Is it too much to ask for better accountability at the higher levels of government?

Your local government would love to fix your roads, give you the best water systems in the world, and be green in all things, but how can it do that if the money is getting less and less? Let’s do the math again: federal and provincial governments are taking more money from the taxpayers and yet downloading more responsibilities to local governments, and they do that by legislation. In addition, they can run a deficit. A triple dip at the expense of the taxpayer (there is only one in my books) and to the immediate services you need.

The District of Lake Country has an infrastructure deficit of about $120 million. If we do not do anything about it, our infrastructure will deteriorate more and more. It is already happening and it will become unsustainable in less than 20 years. The taxpayer needs to understand this and make some choices. The taxpayer also needs to ask the hard questions to the other levels of government, not just their local government.

Local governments are open, transparent and accountable. Many of our employees are taxpayers in their own right as well. They are hard workers. Our budget is discussed and adopted in public meetings. But most important, we are regulated in all we do.

I agree that the tax burden has become difficult but all need to work together for a better system. To only blame local government is not constructive and could have serious consequences for the future of our communities and upcoming generations.



2 thoughts on “Taxes and Local Governments

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