Vancouver Mayor Ken Sim wants the anticipated property tax increase for 2025 to be no higher than 5.5 per cent — almost two per cent less than the 7.28 per cent increase this year and less than half of the 10.7 per cent hike in 2023.
Sim successfully moved an amendment at Wednesday’s council meeting with the support of his ABC Vancouver colleagues to direct the city’s finance team to bring back a draft budget by December that meets the 5.5 per cent target.
“The role of mayor and council is to provide a vision, and it's important to first give our [staff] team clarity as to the direction [we’re going],” the mayor said during debate in the council chamber.
“But [a cap on a tax increase] also sends a signal to all the current and future residents and businesses and people that are thinking of setting up businesses in the city of Vancouver — and without that clarity, I think we just get lost in the wilderness.”
The mayor’s move came despite a staff presentation and accompanying five-year budget outlook report that said the likely tax increase to support existing services is closer to seven per cent each year between 2025 and 2029.
Colin Knight, the city’s director of finance, told council the city is facing mounting financial pressures related to collective agreements, a $500-million infrastructure deficit, inflation and costs downloaded by senior governments.
“So based on that, if we look at current estimates — and without taking into account further actions that staff will look at to reduce expenditures and increase revenues — we will be looking at an average property tax increase of approximately seven per cent going into next year's budget,” Knight said.
'It's absolutely crazy'
Sim didn’t say how he arrived at the 5.5 per cent number, or suggest how council could achieve that goal, although he has been clear that the city can generate revenue via sponsorship and naming rights of parks and other city-owned assets.
The mayor told a Greater Vancouver Board of Trade audience in February that up to $100 million is “sitting on the table” and could be collected from wealthy people and organizations in return for naming rights of city buildings, parks and other assets.
If that money were to be unlocked, Sim said at the time, “you could have a situation where we actually have a property tax decrease in the future,” even with inflation running at three or four per cent.
“It's absolutely crazy that hospitals and universities [are] naming their buildings left, right and centre and we have all these buildings, all these assets, all these parks,” he said.
“As long as they fit in our core values, why aren't we putting names on all of them by people that really want to contribute? If we do that, we will have more impact on affordability than anything else.”
Sponsorship, naming rights
He referred to naming and sponsorship rights again Wednesday, rattling off a list of people and companies that have contributed money to hospitals and schools.
Sim said the Sauder family donated $20 million to UBC’s Faculty of Commerce and Business Administration. In return, the Sauder School of Business was named in recognition of Dr. William L. Sauder.
He said Teck Resources Limited donated $10 million to help build the emergency department at the new St. Paul’s Hospital. Teck has its name on the current hospital on Burrard Street after it donated $2.5 million in 2010 to help finish renovations on what is the Teck Emergency Centre.
The mayor said Telus was willing to pay $40 million to rename BC Place.
He also pointed out $15 million worth of donations from the family of Robert H. Lee to UBC and donations from the Chan family to help build the Chan Centre for Performing Arts at UBC.
Knight said the seven per cent tax increase scenario did not include an estimate on what future sponsorship or naming rights might bring the city in revenue to offset the 2025 budget costs.
“At this time of the [five-year budget] outlook, we didn't have an estimate specifically that we could provide,” he said, noting a separate report will be coming to council on sponsorship and naming rights. “It doesn't mean that there's not going to be the revenue, it just means that it will be coming to council in future.”
'I don't feel comfortable'
OneCity Coun. Christine Boyle and Green Party Coun. Adriane Carr abstained from voting on Sim’s amendment, arguing they weren’t clear on how savings would be achieved to reach 5.5 per cent — and the fact staff recommended a seven per cent tax hike.
Boyle suggested a fire hall could be closed, grants could be cut or library hours reduced.
“I don't feel comfortable voting on that number without knowing how we get there,” she said.
Carr: “Give me the information, give me the different scenarios. I can't tell you right now what 5.5 per cent means, what the impact might be of going to 5.5 per cent, when our staff have said they want to see seven per cent.”
As staff has done in previous budget cycles, the draft budget to council later in the year will include various scenarios of what a 5.5 per cent or seven per cent tax hike would mean to city services.
City manager Paul Mochrie described the past two years as “extraordinary,” in terms of the costs the city has absorbed, including infrastructure renewal demands.
“What we've heard from council is that those impacts in terms of tax increases are not sustainable,” Mochrie said. “So we understand that direction.”
