Staff of the City of Vancouver are suggesting a 7% average property tax increase rate is needed in 2025 to balance the municipal government’s operating budget and maintain existing service levels.
This would be relatively high, comparable to the increases of 7.0% in 2020, 6.35% in 2022, and 7.5% in 2024,, but lower than the historic 10.7% hike of 2023.
According to City staff, the municipal government continues to face cost pressures with labour, supply chains, and infrastructure renewal. City staff state a 7% rate of increase for 2025 would be equivalent to an annual increase of $98 for a median strata property, $167 for a median overall residential property, $258 for a median single-family house, and $470 for a median commercial property.
During the budget update deliberations on Wednesday, City Council debated Mayor Ken Sim’s member motion directing City staff to develop the draft 2025 operating budget with an average property tax increase no greater than 5.5%. This direction passed with OneCity councillor Christine Boyle and Green councillor Adriane Carr abstaining.
“There are small businesses that are struggling and there are people struggling to pay their rent, and it doesn’t even matter if you’re a homeowner or a renter, property taxes affect all of us. We have to make a stand. We have to get the rate of property tax increases to a sustainable level or you know what, those small businesses won’t be around,” said Sim during the meeting.
Sim has been pushing for the City to identify cost savings, efficiencies, and new ancillary revenue streams, such as naming rights sponsorship of municipal assets.
“The role of Mayor and Council is to provide a vision, and it’s important first to give our team clarity as to the direction as to what and where we want to go. But it also sends a signal to all the current and future residents, businesses, and people that are thinking of setting up businesses in Vancouver. Without that clarity, we just get lost in the wilderness… We need a city that’s affordable, vibrant, and where people can afford to live here and get their businesses started up here,” continued the Mayor.
City staff will return with more updates and a draft budget later this year, with a decision expected to be made by City Council in December.
Green councillor Pete Fry deemed Sim’s 5.5% cap to be “arbitrary.”
There were also some concerns at the table by opposition councillors that this could narrow the City’s capacity to deliver essential and critical services, coupled with their desire for City staff to continue the practice of providing scenarios on the tradeoffs for varying rates of increases.
“Budgets are about choices, and there are a variety of choices we can make in getting there… At this stage, not knowing what would be reduced to get down to 5.5% or lower, I want to make sure that we are making those choices based on the best information, and there’s transparency to the public on how we’re getting there,” said Boyle during the meeting.
Carr expressed particular concern that limiting the municipality’s property tax increase could limit the municipal government’s ability to respond and react to climate change and other emergencies.
“We live in changing times, especially around climate change… The recent calving off of an ice sheet in Antartica with the idea that over three-metre raise in sea levels, that’s scary news. Maximizing at 5.5% might not be the right answer when it come time to vote on a budget. It’s clear to me that staff’s suggestion in this report is 7%,” said Carr.
“So I don’t want to have a maximized 5.5% when staff have already recommended to us with good substantiated evidence that 7% is a more likely necessary number, and that’s not even taking into consideration the potential for changing circumstances that may require that we put more in under emergency kinds of situations.”
In response, ABC councillor Lisa Dominato asserts the current top issues for residents are the cost of living, housing, and healthcare, and deems it to be “progressive” to be following the Mayor’s approach of exploring cost savings, efficiencies, and new revenue sources.
ABC councillor Rebecca Bligh was particularly pointed, and blamed the previous majority makeup of City Council for the municipal government’s current financial predicament.
“I think that we are working in the right direction to really tidy up our fiscal situation from the previous term, which I was here but I was a minority when it came to those decisions. Some people here were in the majority that came to those decisions, and it became completely unaffordable for small businesses and residents in our city who are struggling to make ends meet,” said Bligh.
Bligh also asserted that concerns over the idea that a cap to the property tax increase could impact the City’s service levels and responsiveness to emergencies to be “fear mongering.”
“None of that is evident in the practice of how we’ve governed in the last 18 months, so I reject any notion that that is how we operate as a Council and as a majority-led Council by ABC. We are fiscally responsible to the residents and small businesses, as well as maintaining services and supporting critical life safety response services,” continued Bligh.
ABC councillor Sarah Kirby-Yung further suggested that Vancouver’s municipal property taxes are relatively low compared to Canadian counterparts because the cost of living and housing costs are high.
The property tax paid to the City of Vancouver accounts for just over 50% of the total property tax paid by property owners. The remainder of the property tax is controlled by the Metro Vancouver Regional District, TransLink, and the provincial government’s school taxes, BC Assessment, and Municipal Finance Authority. There is also growing pressure to increase the regional district’s portion of the property tax due to skyrocketing costs for new infrastructure projects, especially several new and improved sewerage treatment plants.
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: 5.0%
- 2020: 7.0%
- 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%