POLITICS

Duelling B.C. reports offer vastly different takes on municipal spending

09/18/2014 07:56 EDT | Updated 06/16/2017 00:57 EDT
VICTORIA - The release of two reports investigating the spending habits of British Columbia's municipalities offer vastly different conclusions.

The spending probes — one commissioned by the B.C. government, a second released by a union-backed think tank — come ahead of next week's Union of B.C. Municipalities convention in Whistler that brings together hundreds of local, provincial and federal politicians, including Premier Christy Clark, who will address the convention next Friday.

A report from the Vancouver-based Columbia Institute, Who's Picking Up the Tab — Federal and Provincial Downloads onto Local Governments, concludes local governments have shouldered about $4 billion in reduced federal and provincial transfer payments.

Earlier this week, the Canadian Taxpayers' Federation leaked an Ernst and Young report commissioned by the Liberal government that took aim at unregulated wage policies within local governments and the burdens they place on taxpayers.

Union of B.C. Municipalities president Rhona Martin said Thursday she wants to avoid a battle at the convention.

"The provincial government and the UBCM are partners," she said. "We all serve the same people. We're all concerned about our tax dollars and want to ensure they are well spent."

The UBCM issued a report last year, Strong Fiscal Futures, that called for a review of the local government finance system, concluding it relied too heavily on property taxes. But its efforts to consult with the B.C. government have gone nowhere, Martin said.

"There's some issues here, but trying to solve them in isolation of each other is not the best way to do things," she said. "The big issue for the UBCM going forward is the property taxpayer cannot continue to afford to have everything lumped on that one method of paying for things. It's going to be a much needed discussion."

The Ernst and Young report said salaries for municipal employees increased by 38 per cent from 2001 to 2012, while government and public-sector salaries rose between 19 and 24 per cent during the same period, prompting Finance Minister Mike de Jong to issue a statement that said all governments should work together to save tax dollars.

The Columbia Institute report concluded municipalities are paying more than their share of policing, housing, waste and water-treatment costs as the federal and provincial governments funnel the financial burden downward.

"Local governments are finding themselves picking up the slack on housing, mental health, addiction, social services, wastewater treatment, diking, flood management, drinking water and recreation infrastructure," the 44-page report concludes.

The institute characterizes itself as a charitable organization established to activate and motivate working people to build strong, progressive communities throughout Canada.

Its report states municipal governments rely on two methods to raise money: property taxes and user fees, and they aren't permitted to run deficits. But from 2001 to 2010 sewer-service costs grew 173 per cent, police costs increased 134 per cent, waste-water services costs went up 130 per cent and park, recreation and culture services costs grew 108 per cent.

"Disturbed person" calls to Victoria police increased 356 per cent between 2008 and 2013, and the Vancouver Police Department now employs 17 people full-time for mental illness issues when the same file required 1.5 employees in the 1990s, the report said. Prince George RCMP reports a 40 per cent increase in mental-health calls between 2008 and 2013.

"Mental illness is believed to contribute to 21 per cent of incidents handled by VPD officers and 25 per cent of total time spent on calls where a report is written," the report stated.

Institute executive director Charley Beresford said municipalities are struggling to cover the increasing policing-related duties and other services, such as addictions, out of civic duty, but the strain is showing.

"Essentially, we have a situation where senior orders of government ... have both been reducing their commitment to programs and cutting direct grants and the end result is that municipalities are picking up the tab," she said.

Beresford rejected many of the findings of the Ernst and Young report on staff wages.

"Municipalities are stepping into the fray," said Beresford. "They're providing excellent services, often for less than the cost of your cable television package and they're dealing with all of these additional services."

Community, Sport and Cultural Development Minister Coralee Oakes said in a statement the government is committed to fiscal responsibility, but will ensure sustainable and predictable funding levels are maintained.

The statement said since 2001, the B.C. government has provided $3 billion in new funding to local governments, including more than $678 million in small community, regional district and traffic fine revenue sharing grants.