Vancouver’s 2021 Operating Budget continues a worrying trend to higher and higher tax increases and puts the City on an unsustainable fiscal path say NPA Councillors
Vancouver, B.C., December 8, 2020 – Today, all four NPA City Councillors voted against the City’s 2021 Operating Budget: A budget that includes an onerous 5% property tax increase for the City’s residents and small businesses to shoulder in the midst of a pandemic. The City’s 2021 Operating Budget also locks in the worrying trend to higher and higher tax increases seen under this Council and places Vancouver on an unsustainable fiscal path that threatens the city’s post-COVID economic recovery.
Among the reasons cited by the NPA City Councillors for voting against the 2021 Operating Budget is a concern that the Budget relies too heavily on depleting the City’s Revenue Stabilization Reserve to support spending; an action that will effectively leave the City’s reserve fund empty and require even higher tax increases in the coming recovery years.
As noted in the 2021 Budget, $34 million already had to be drawn from the City’s Revenue Stabilization Reserve this year on an emergency basis to rebalance the 2020 Budget, despite a variety of facility closures, associated staff layoffs, and other savings measures. The 2021 Operating Budget will draw another $57 million from the reserve to offset expected 2021 revenue losses of $60 million. This means up to $90 million will need to be raised in future years to replenish the reserve – either through an additional 2% tax hike every year over a three-year period (or equivalent service reductions) or through a 1% additional tax each year for five years.
The NPA City Councillors also expressed concern that the budget lacks a strategy to address important pandemic and recovery priorities and the focus needed to guide the City’s actions and support residents and small businesses toward a successful post-COVID recovery. Instead, the 2021 budget is based on an across-the-board approach with modest 1% reductions in all areas rather than focusing on what is most important right now.
Overall, the NPA Caucus members believe the path to recovery during this unprecedented time of challenge and uncertainty is to focus City resources and spending on retaining quality core services, to zero in on improving housing, homelessness, and affordability, and to facilitate small business recovery.
Councillor Sarah Kirby-Yung: “These are tough times where people and small businesses are just trying to make ends meet,” said Councillor Sarah Kirby-Yung. “We need to laser focus our spending where it’s needed most and align it with what residents and our small businesses said was most important to them when surveyed about the budget: core services, housing, homelessness and housing affordability, and small business recovery. Instead, we got a proposed budget that didn’t increase street cleaning enough, despite growing demand, and funding for the unanimously supported temporary extended patio program for restaurants had to be added as an extra cost by Council; even while the budget locked in $1.5 million in new spending for mobility pricing. That’s just out of whack with reality and what people asked for when they were surveyed.”
Councillor Melissa De Genova: “Today was the most political day of our term. We need to put the people of Vancouver ahead of politics,” said Councillor Melissa De Genova. Now more than ever, Council needs to show leadership and move ahead with a realistic plan. Instead, this Council downloaded costs onto itself. The theme of this budget should have reflected the words of Dr. Bonnie Henry – “Be kind, Be Calm, and Be Safe”. Yet, it does not: 12% is the final number we’re taking from reserves and capital on top of a 5% tax increase. We can’t blame all of this on the pandemic. Now that the Mayor has secured his majority, this is the final nail in the coffin for affordability in Vancouver.”
Councillor Lisa Dominato: “The 2021 budget makes life more unaffordable for renters, homeowners, and businesses alike while at the same time plunging the City deeper into a structural deficit,” said Councillor Lisa Dominato. “The Mayor and his coalition have once again reached deep into the wallets of Vancouver citizens in this Budget with a Tax-and-Spend agenda.”
Councillor Colleen Hardwick: “The 2021 budget reflects this Council’s and this Mayor’s tax-and-spend approach,” said Councillor Colleen Hardwick. “It all adds up to costly new programs, dramatic tax increases, draining the city’s reserves, and growing a costly bureaucracy, all of which lands at the doorstep of our city’s taxpayers. Council has to stop treating Vancouver taxpayers like an unlimited ATM. Enough is enough. The impact of COVID-19 has shown us just how fragile the city’s finances are and that means City Council has to step up and get our house in order.”
The following NPA City Councillors are available for media comment:
- Melissa De Genova at 604-767-8731
- Lisa Dominato at 778-980-4422
- Sarah Kirby-Yung at 604-788-1352
- Colleen Hardwick at Colleen@ColleenHardwick.com