In May 2024, during the initial budget update deliberations, Vancouver Mayor Ken Sim and the ABC-led City Council directed City of Vancouver staff to limit the 2025 average property tax rate increase to no more than 5.5%.
Earlier this week, ahead of the finalization of the municipal government’s 2025 budget before the end of this year, City staff created a draft budget for City Council’s consideration, including following the direction of elected officials of designing a budget with a 5.5% average property tax rate increase.
According to City staff, 4.5% of the property tax rate increase goes toward increasing the growing costs of operations and providing services, and 1% goes toward specifically directly addressing rapidly aging and under-sized utility infrastructure, especially sewerage connections. The 1% top-off for renewing utilities has been a budgetary practice for several years.
The draft budget states the 5.5% rate is equivalent to a $130 increase for a median overall home worth $1.367 million, a $211 increase for a median single-family house worth $2.2 million, and a $77 increase for a median strata home worth $806,000.
While still relatively elevated, the 5.5% rate returns the annual property tax rate closer to the historical average, following several years of drastic increases — 6.35% in 2022, 10.7% in 2023, and 7.5% in 2024 — due in part to the pandemic-induced inflationary trends, and higher costs for staff compensation and benefits.
But there will be steeper utility user fee hikes for 2025, particularly a 36.9% rate increase for sewerage connection services, including 7% for the City’s sewerage services and 29.9% for Metro Vancouver Regional District’s levy.
City staff stated the elevated sewerage fees are driven primarily by a 50% year-over-year hike in levies charged by the regional district due to the multibillion-dollar cost overruns of the construction project to build the new North Shore Wastewater Treatment Plant, with the regional district’s board agreeing earlier this year to distribute some of the costs to regional residents and businesses outside of the North Shore.
These regional district sewerage fee hikes are in addition to and serve as a prelude to the forthcoming steeper hikes over the coming years, specifically for Vancouver and some Richmond residents and businesses to fund the new $10 billion Iona Wastewater Treatment Plant.
Overall, with an average 5.5% property tax rate uptick and other increases to the wide range of City and Vancouver Park Board fees, the 2025 draft budget calls for a 10.6% increase in revenues for the municipal government — rising from $2.13 billion in 2024 to $2.36 billion in 2025. The City hit and exceeded the $2 billion mark for its annual operating budget for the first time in 2024.
Property tax revenue — the primary source of operating revenue for Canadian municipalities — will reach $1.34 billion in 2025, representing a 6.2% increase. Overall utilities fee revenue will go up by 15.9% from $425 million in 2024 to $492 million in 2025.
License and development fee revenues will climb by 19.1% from $116.7 million in 2024 to $139 million in 2025, while pay parking revenue will go up by 5.4% from $76.3 million to $80.4 million.
When it comes to operating cost increases, a notable increase is a 36.5% budget jump for the Planning, Urban Design & Sustainability department from $34.9 million to $44.1 million, which accounts for 2% of the City’s overall operating costs.
City staff state this increase for urban planning is due to the factors of one-time increases in project expenses funded by the provincial and federal governments to support municipal-led housing initiatives, major project costs funded from developer fees, fixed cost increases for compensation and benefits, and additional staffing resources to support the City’s ongoing strategies to improve the speed and efficiency of reviewing and approving permit applications, which is funded through the increase in volume of permit applications.
For the Vancouver Park Board, City staff are recommending a 2025 operating budget of $183.9 million for Vancouver’s parks and recreation system, which represents a 7.2% or $12.4 million increase. This covers rising compensation and benefits costs, increased costs for maintenance and utilities fees, and the additional operations and maintenance costs of the new major Oakridge Community Centre at the Oakridge Park mall complex, which opens later in 2025.
This $12.4 million increase is aligned with the budget request approved by Park Board commissioners earlier in November 2024. The mayor and City Council hold the fiduciary responsibility of reviewing and providing the final approval needed for the Park Board’s requested annual operational and capital budgets, and procurement contracts worth over $2 million.
Historically, the operating costs for the Vancouver Police Department (VPD) and utilities are typically practically tied as the City’s highest operating costs. However, in recent years, utilities operating costs as a proportion of the City’s overall budget have crept upward faster from the need for reinvestment.
For 2025, City staff are recommending a utilities operating budget of $558.8 million, which represents an increase of $75.2 million or 15.5%, and a policing operating budget of $453.4 million, which is a $10.8 million or 2.4% increase.
Based on these figures, of the proposed $2.36 billion operating budget for 2025, utilities will represent 24% and policing will be a more distant proportion of 19%.
While there have been consecutive year-over-year budgetary increases for policing operating costs, this represents a steady decade-long decrease in policing operating costs as a proportion of the City’s total operating budget — down from 22% in 2015.
City staff’s recommendation of a $10.8 million operating budget increase for the VPD is less than half of what the Vancouver Police Board approved for its formal request to the City earlier this week. The policing board requested an additional $23 million or a 5.6% increase for 2025.
The VPD’s proposed $23 million budget increase included $6.6 million to roll out a new permanent body-worn camera policy for its force of over 800 officers. This policy was a direction previously made by the ABC-led City Council to help improve accountability, investigations, and legal procedures.
Additionally, there are growing policing costs to manage the security and traffic control needs of the high frequency of anti-Israel protests with mass crowds, as well as crime and public safety issues stemming from social issues, and security planning costs for the 2026 FIFA World Cup.
The draft budget also highlights City staff’s desire to develop strategies to reduce policing costs for the necessary security and traffic control measures for special events, given that such costs increasingly inhibit event organizers.
Overall, the 2025 operating budget costs will go up by 10.6%, matching operating revenues.
Any deviation from these operating costs — such as aligning with any higher budget requests from the City’s various departments, and/or introducing any new initiatives carrying a cost — during City Council’s forthcoming deliberations and potential amendments could throw off Vancouver Mayor Ken Sim’s commitment to cap the average property tax rate at 5.5% for 2025.
As for the City’s separate capital budget for building new and improved amenities, buildings, and infrastructure, City staff have recommended $880 million in capital expenses for 2025, representing a 13% increase over the 2024 capital budget. This includes the new PNE amphitheatre, new Marpole-Oakridge Community Centre, new Grandview Firehall No. 9 and Vancouver Fire Rescue Services headquarters, sewer main renewals, and land acquisition for affordable housing projects.
Also, there is about $1.18 billion worth of existing projects and programs under the capital plan that will be implemented in 2025 and beyond — part of the broader $3.39 billion multi-year capital plan from 2023 to 2026.
This is a list of the City of Vancouver’s historical average property tax increases:
- 2024: 7.5%
- 2023: 10.7%
- 2022: 6.35%
- 2021: 5%
- 2020: 7%
- 2019: 4.9%
- 2018: 4.2%
- 2017: 3.9%
- 2016: 2.3%
- 2015: 2.4%
- 2014: 1.9%
- 2013: 1.5%
- 2012: 2.8%
- 2011: 2.2%
- 2010: 2.3%