09/15/2014 07:07 EDT | Updated 11/15/2014 05:59 EST

Report says municipalities pay rates for employees ahead of province

VICTORIA - The Canadian Taxpayers' Federation says a report commissioned by the British Columbia government takes aim at unlimited and unregulated wage policies within municipal governments and the heavy burdens they place on taxpayers.

The Ernst and Young report compiled as part of the province's core review program concludes salaries for municipal employees increased by 38 per cent from 2001 to 2012 while government and public-sector salaries rose between 19 per cent and 24 per cent during the same period.

The report, obtained by the taxpayers' federation, concludes taxpayers who shoulder such increases could get some relief if municipalities held the line on salary hikes to its unionized and management employees.

"Compared to the provincial level of government, local government compensation is not co-ordinated (or regulated); there are no limits other than what local governments determine the sector can bear and there are less transparency requirements," said the report, called BC Public Sector Compensation Review. "This has resulted in a lack of alignment in compensation between levels and also across the sector."

Taxpayers' federation spokesman Jordan Bateman said the provincial government has been holding its public-sector workers to tight wage settlements, noting it is currently engaged in difficult negotiations with striking teachers, while municipalities are under no restrictions.

"The B.C. government has done the best job of any provincial government across the country at managing their labour costs in the last five or six years. Municipalities did not follow suit," Bateman said.

He said the report finds Vancouver pays the highest salaries to strategic leadership managers of any government or Crown corporation in B.C., even higher than the University of B.C. and BC Hydro.

The report concludes municipalities are overpaying the provincial government for technical expertise, Bateman said, adding it also says municipalities have a higher percentage of employees making $75,000 a year or more than in the provincial government.

The report recommends a more co-ordinated approach across all governments when it comes to salary structures.

"There is a need to drive greater alignment in compensation across the core public service, broader public sector and municipalities in order to meet the expectations of the 'single taxpayer' that tax dollars be spent consistently and effectively for comparable resources across all areas of government," the report said.

Union of B.C. Municipalities president Rhona Martin said the union knows there are issues about compensation and they attempted to address them in a report issued last year called Strong Fiscal Futures.

The report calls for a review of the local government finance system.

"It is the property taxpayer that is paying for everything. Our point is we're breaking the back of the property taxpayer," she said.

Martin said the government has been silent on the suggestions in the report, despite UBCM's lobbying efforts.

"What we had hoped would happen, was there would be a joint table, where the province and the UBCM (would be) working together to solve the issues."

Martin said she's read the government report and noted there are several data limitations, so it may not be as accurate as first believed.

Finance Minister Mike de Jong said the report highlights the need for all governments to work together to save tax dollars.

"There’s only one taxpayer funding multiple levels of government and important public services, and it’s up to the provincial and local governments to ensure we’re working together to those services aren’t costing citizens more than necessary," he said in a statement. "Some local governments are paying more than market value for similar jobs."

The report comes about two months before provincewide municipal elections, and Bateman said all candidates should read it and tell voters how they would better manage labour costs.