Vancouver residential property owners are in for a big squeeze next year.
Not only will they be paying additional taxes in 2011, they’ll also have to absorb a portion of levies on commercial properties. That’s because the Vision Vancouver–controlled council is set to maintain a policy made by the previous Non-Partisan Association administration to shift taxes from nonresidential to residential properties.
Additionally, utility fees on water, garbage, and sewer services will be increasing next year.
Mayor Gregor Robertson wants to limit the increase in property taxes to two percent. But according to him, this can only be done if the projected $20-million gap in the 2011 budget is plugged.
Coun. David Cadman of the Coalition of Progressive Electors, who has been a consistent opponent of the shifting of taxes from business to residential properties, explained the tax dynamics at play.
“There’s a desire to have a two-percent tax increase because they’re going to transfer money from the commercial, industrial sector to the residential sector,” Cadman told the Georgia Straight in a phone interview. “So the residents are going to end up paying four percent. In order to meet the tax shift, we have to keep the increase to two percent. Otherwise, the shift onto the residential would be much higher.”
The end result is putting public services on the chopping block.
“Unfortunately, the consequence of that is going to be that we’re going to have to go through and figure out how to cut services,” Cadman said. “And I think at a time like this, citizens are looking towards their libraries, their community centres, their recreational options as things they want to do. And I think we cannot continue to have the residents pay a four-percent tax increase while businesses will only pay a one-percent tax increase.”
A staff report on the proposed $1-billion city budget stated that 2011 will be the fourth year of the tax shift since the redistribution policy was adopted by the NPA–dominated council in March 2008.
The shift seeks to transfer a total of $23.8 million in taxes from nonresidential properties to residential ones over a period of five years.
The same report also mentioned the anticipated utility-fee increases for 2011. For water, single-family dwellings might see their annual flat fee increase from $417 to $471. Solid-waste bills could rise by $9 for each homeowner. A single-family dwelling’s bill for sewer services could increase from $227 to $245.
“We’re effectively hitting people, and ultimately I would say that that hurts the small businesses more because people then don’t make as many purchases,” Cadman said. “The other piece of that, of course, is”¦with the HST [harmonized sales tax] sitting out there, people are really being hesitant about making purchases because there’s an additional 12 percent on top of the purchase.”
Vision Vancouver’s Raymond Louie, who is the chair of the council committee on city services and budgets, defended the tax shift.
“The prevailing majority is that this is part of a standing policy and that it’s necessary due to the economic circumstances,” Louie told the Straight in a phone interview. “We do want to continue to make sure that our businesses, our small businesses, survive in this tough economic time. Given that they have been suffering for the past couple of years, it’s thought to be prudent to continue.”
The shift has the support of the Downtown Vancouver Business Improvement Association.
“Commercial property owners pay right now 4.4 times more on the same value of a property that a residential would pay,” DVBIA executive director Charles Gauthier told the Straight in a phone interview. “So what we’re looking for is not that we pay the same amount but that the ratio be three-to-one versus 4.4-to-one.”
Think City, a civic-policy think tank, has a different perspective.
“The property-tax shift is a regressive policy,” Think City chair Neil Monckton told the Straight in a phone interview. “It doesn’t deal with the core issues, and we think that Vision needs to rethink it and not continue with it.”
City hall is holding a series of public consultations on the 2011 budget; go to vancouver.ca/ and look under What’s New for more information.