Union of B.C. Municipalities president Sav Dhaliwal (left) and Canadian Taxpayers Federation B.C. director Jordan Bateman (right).

Labour consumes most new tax dollars cities collect

UBCM president calls CTF findings unsurprising (with chart)

Rising property taxes charged by B.C. municipalities have mainly gone to cover higher labour costs, rather than expanding civic services, according to an analysis by the Canadian Taxpayers Federation.

It found B.C.’s 30 biggest cities brought in a combined $490 million more in 2013 than five years earlier through a combination of property tax rate hikes, higher assessments and growth, while they spent $345 million more on municipal salaries, wages and benefits over the same period.

That means 70 cents out of every new property tax dollar generated since 2009 was eaten up by labour costs, CTF B.C. director Jordan Bateman said.

“It seems that most of this money is going to fund raises for existing executives, existing managers and labour contracts,” he said, although he conceded in some cases the higher labour costs have added additional employees to provide expanded services.

“The Township of Langley, for example, is adding more firefighters,” he said.

Rising labour costs actually exceeded the entire growth in property taxes in Vancouver, West Vancouver, Delta, North Vancouver City and West Kelowna.

“Every single new cent plus more went to paying for labour in those cities,” Bateman said.

Bucking the trend was Langford, where municipal labour costs actually declined slightly since 2009.

Bateman said that was due to the local council’s “pretty aggressive” contracting out of municipal services to private firms, which the CTF broadly supports.

“We think it’s better to put services in the hands of the private sector, where there’s competition and efficiency.”

The CTF analysis excludes all contracted labour costs, including RCMP policing services, although policing costs are included in cities with municipal forces.

Union of B.C. Municipalities president Sav Dhaliwal, a Burnaby city councillor, dismissed the findings as unsurprising.

“A great portion of our operating costs have always been salary and benefits of our employees,” Dhaliwal said.

“The services we provide are labour intensive – road, public transit, protective services, clean drinking water – all these require people to deliver those services.”

Most civic tax gains go to rising payroll | Create Infographics