Hey big spender! Municipal spending growth across Metro Vancouver exceeds population growth and inflation

Municipal governments are responsible for local transportation and road networks, water and sewer services, property development, public safety, garbage and recycling, parks and recreation, among other services for residents.

As populations increase, municipal spending rises to deliver services and infrastructure to more residents. However, the degree to which expenditures continue to outpace population growth should raise questions.

The Business Council has analyzed spending increases across British Columbia’s 60 largest municipalities, with a particular focus on Metro Vancouver – where spending growth has exceeded both population growth and inflation for the past two decades. In Metro Vancouver, over the five-year period from 2009 to 2014 real municipal spending per capita rose 10%. And most recently, from 2014 to 2019, spending per person (after adjusting for inflation) advanced another 5.6%. The review also examines spending in the other larger municipalities. Among the province’s 60 largest municipalities, Metro Vancouver municipalities range from being among the most fiscally restrained to the least.

Households and businesses throughout the region have seen property taxes rise steadily to finance outsized municipal spending growth. Because the indicators used to construct the Municipal Fiscal Index do not reflect the scope, quality or service levels across municipalities they should be interpreted carefully. But when framed within the broader context of rising municipal spending growth generally, the review and rankings raise some important questions. Are businesses and residents receiving enhanced municipal services that reflect these increases? Does more prolific spending growth translate into better service improvements?

Key takeaways

Spending growth (excluding capital projects) across Metro Vancouver municipal governments collectively has run well ahead of both population growth and inflation over the past decade.

• Real municipal expenditures per capita grew 10% over 2009-14 and another 6% over 2014-19.

In 2019, spending per capita was lowest in:

• Surrey ($1,400),

• Maple Ridge ($1,500),

• Port Coquitlam ($1,600),

• Langley ($1,700), and

• Coquitlam ($1,800).

Municipalities spending the most per capita in 2019 were:

• West Vancouver ($3,700),

• New Westminster ($2,600),

• City of Vancouver ($2,400),

• Richmond ($2,300), and

• Delta ($2,200).

To better understand municipal spending and fiscal trends, BCBC developed a Municipal Fiscal Index, a composite index made up of six equally weighted spending and debt metrics. The Index is used to rank comparative fiscal restraint across Metro Vancouver municipalities.

Within Metro Vancouver, the three most fiscally restrained (top ranking) municipalities are:

• Maple Ridge,

• City of North Vancouver, and

• Burnaby

The bottom three ranked by the MFI (least fiscally restrained) are:

• West Vancouver,

• City of Vancouver, and

• White Rock

We also calculate the MFI for the province’s 60 largest municipalities:

• Central Saanich,

• Comox,

• Sooke,

• Maple Ridge, and

• Abbotsford

Province-wide, the bottom five ranked municipalities are:

• City of Vancouver,

• Fort St. John,

• White Rock,

• West Vancouver, and

• Dawson Creek

Municipalities face unique circumstances. In some cases, differences negate meaningful comparisons so the spending figures and summary MFI rankings of individual municipalities should be interpreted cautiously.

There is no clear pattern between municipal population size and Index rankings. Among the 20 top-ranking municipalities (with comparatively low MFI values), ten have populations larger than the median population of all 60 municipalities while ten have smaller populations. Among the 20 bottom-ranking municipalities, eight have above-median populations and 12 have populations lower than the median.

Some Municipalities carry debt to finance large capital investments and debt servicing costs add to annual municipal expenditures. Across Metro Vancouver, municipal long-term debt totalled $1.76 billion at the end of 2019, up nearly 18% from 2014. In per capita terms, nominal municipal debt from $624 in 2014 to $662 in 2019.