Municipal spending varies greatly
Fraser Institute report shines a light on regional diff erences
There is a massive discrepancy in per capita spending among 17 Metro Vancouver municipalities, with West Vancouver’s $ 2,118 more than double Surrey’s low of $ 951 in 2012 and well above the regional average of $ 1,384, a Fraser Institute report shows.
The report is the institute’s third on municipal spending this year and is meant to fuel public debate in the lead- up to the Nov. 15 civic election.
“The motivation is to provide Metro Vancouver residents with the information they need to know about how governments are spending their tax dollars,” said Charles Lammam, the Fraser Institute’s associate director of tax and fiscal policy.
“Unfortunately, municipal spending doesn’t receive a whole lot of scrutiny, especially compared with the provincial and federal government.”
West Vancouver Mayor Michael Smith, just acclaimed to a second consecutive term, said in an interview his municipality must be doing something right despite the report’s findings because that’s where Fraser Institute executive director Michael Walker calls home.
“I’ve never had an election as mayor,” said Smith, emphasizing West Vancouver’s fine community and senior centres. “This is a very desirable residential community. And one of the reasons is because our residents desire excellent services. They get very good value for services.”
West Vancouver also puts a high price on policing, he said. “Because of the value of our properties and our citizens’ possessions, that’s what our citizens want.”
In 2012, West Vancouver had the equivalent of 168 police officers for every 100,000 people, compared with 137 in Surrey.
Lots are bigger in West Vancouver, he said, and there’s an added cost of providing water and sewer services through rock compared with a farmer’s field in Surrey.
He added that Surrey borrowed millions to build a new city hall, while West Vancouver makes do with a 50- yearold building “because our citizens don’t believe in building a Taj Mahal for politicians and bureaucrats.”
Surrey Mayor Dianne Watts, who is not seeking re- election, argues it’s no accident that Surrey spends less per person than any other municipality.
“We are the lowest per capita in the region and that’s purposeful,” she said in an interview. “We want to make sure we are a very lean organization and make decisions based on the cost factor.”
Surrey also derives more of its “own- source revenue” from developer fees than any other municipality, at 20.3 per cent, the report found.
“We’ve always had a policy in place that development pays its fair share, not the taxpayer,” Watts said. “When we develop an area the development industry pays for the infrastructure and not the taxpayer.”
The fast- growing city remains affordable, she argued, as evidenced by 1,000 to 1,200 people moving there per month, all of which adds to the tax base and creates the opportunity to pay for more services without raising taxes, she said.
Vancouver had the thirdhighest spending per capita at $ 1,689 in 2012.
The share of Vancouver’s property tax revenue coming from businesses is 45.1 per cent, which is above the regional average 40.7 per cent, the report said. Vancouver’s heavy industry tax ratio is more than three times that of Surrey.
Vancouver councillor Raymond Louie said the Fraser Institute report takes a “very narrow” look at municipal spending and noted that the Real Property Association of Canada recently concluded that Vancouver has the lowest property tax rates of major cities in the country.
He also noted that KPMG has said Vancouver is the second most competitive big city in the world in terms of business taxes.
“It confirms that Vancouver is under good management
Because of the value of our properties and our citizens’ possessions, that’s what our citizens want.
MICHAEL SMITH WEST VANCOUVER MAYOR ON THE HIGH COST OF POLICING We are the lowest per capita in the region and that’s purposeful. We want to make sure we are a very lean organization and make decisions based on the cost factor. DIANNE WATTS SURREY MAYOR
financially,” he said, noting the city has emerged from debt from the Olympic Village fiasco.
Overall spending by the 17 municipalities exceeded the cost of inflation by an average 27 per cent, adjusted for inflation, from 2002 to 2012, the report notes.
The study also compares government revenue, including property taxes and other fees, in the 17 municipalities. West Vancouver again topped the list, collecting $ 2,548 in revenue per person in 2012, followed by New Westminster at $ 2,424 and Vancouver at $ 2,167.
Surrey collected the least amount of revenue per person at $ 1,451 while the regional average was $ 1,916.
Lamman said the report doesn’t make a judgment as to whether the spending of any municipality is too low or too high, although that may be the subject of a future study. “The first step is to provide information on how municipal governments are spending. You need the basic data to start the conversation.”
All four of the top municipal spenders — West Vancouver, New Westminster, Vancouver and Delta — also have their own police departments, although Lamman does not believe that is a major factor in driving up spending.
The report shows that the regional per capita average for protective services in 2012 ( police, fire, bylaw enforcement, emergency preparedness) totalled $ 428, and 30.9 per cent as a percentage of total spending.
In comparison: West Vancouver was $ 626 and 29.6 per cent; Delta $ 567 and 35.5 per cent; New Westminster $ 508 and 27.6 per cent; and Vancouver $ 503 and 29.8 per cent.
Port Moody, which also has its own police force, went from the seventh highest spending per capita in 2002 to ninth place in 2012. It collected the second- least amount of revenue after Surrey among the 17 municipalities in 2012.
Economies of scale cannot fully explain the differences in per capita spending, Lamman said, since Vancouver, with the largest population, placed third highest, while Surrey, with the second largest population, placed last.
The report relies in large part on the Local Government Statistics database, which is published by the provincial Ministry of Community, Sport, and Cultural Development and uses annual financial information provided on a consistent accounting basis.
Bowen Island, Belcarra, Anmore and Lions Bay were not included in the survey because they each have fewer than 5,000 residents and have different financial arrangements, and are not required to provide police services.
West Vancouver’s figures were adjusted to account for the fact it operates its own transit through the Blue Bus system.