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PART TWO: Municipal Tax Burden Varies Widely Across Smaller BC Communities
By Ken Peacock
This is the second blog documenting the level and growth of municipal property taxes in BC, using data compiled and reported by the Ministry of Community, Sport and Cultural Development. The first blog examined property taxes for larger municipalities with populations in excess of 10,000. This follow up piece looks at the level and growth of per capita taxes for municipalities with populations between 2,000 and 10,000.
The first graph below shows the per capita amount of tax levied in each of the municipalities (the total amount raised from all nine property classes). These figures provide a general gauge of the overall tax burden in each municipality, with the per capita data allowing for high level comparisons across municipalities of varying sizes. The numbers on the right side of the chart are the average annual growth rates in per capita taxes in each municipality over the past three years, and are included in the first graph for easy reference.
As noted in the earlier blog, it is necessary to be cautious in making comparisons and drawing conclusions about municipal tax burdens. Municipalities are heterogeneous. They deliver different mixes and levels of service and also face a mix of cost pressures and funding challenges. What is presented in the graph is simply information on per capita taxation as compiled by the Ministry, with no reference to the specific circumstances of individual municipalities.
With that caution in mind, the data show that the Northern Rockies regional municipality had the highest level of per capita property taxes among the 53 BC municipalities with populations between 2,000 and 10,000. In fact, with per capita taxes amounting to $5,709 in 2015, the Northern Rockies had the highest tax burden of any municipality in the province, regardless of population size. The next highest per capita tax level was in Tumbler Ridge, followed by Kitimat, Fernie and Elkford. These communities operate in relatively remote and resource dependent areas and rely on industrial properties for a significant portion of their overall tax revenue. Note that the cases of Fernie, Elkford (and Sparwood, the municipality with the 7th highest per capita tax burden in the figure) are unique because they are part of the Elk Valley Property Tax Sharing Agreement, which is an agreement that shares the property taxes levied on the industrial coal mining properties in the Elk Valley. The Agreement recognizes each community’s limited ability to diversify their tax base and the need to rely on industrial taxes to provide a high level of services and amenities to local citizens. At the other end of the scale, per capita taxes were only $253 in Fruitvale.
The second figure below reproduces the growth in per capita tax levels shown in the column on the right side of the first figure. As was the case with the larger cities and districts, the increase in per capita taxes outpaced inflation in nearly all of the small to mid-sized municipalities over the past three years. The sizable range in per capita taxes in part reflects the array of amenities and services that municipalities deliver. But from both the business and household perspective, it is worrisome that municipal tax increases consistently exceed inflation across the spectrum of virtually all cities and towns in BC.
The data and accompanying graphs provide a quick reference point for assessing the relative tax burdens across municipalities, but readers should use this high level information cautiously and consider the differing levels of services, capital investment and geographic context before drawing firm conclusions about property tax rates.