During a punishing pandemic that remains in control, municipal overlords must grapple with 2022 budgets while constrained by the inefficiencies and added costs of our boutique governance model.

Budget pressures are coming from every direction and not just the pandemic, but from diminished reserves, escalating inflation, ballooning provincial debt, aging infrastructure needs, and increased labour and materials costs.

Running up federal deficits and debt to unsustainable levels – all during historically low interest rates – will eventually be felt by Greater Victoria taxpayers.

The brain trust vying for power in Ottawa are promising the galaxy this election and little fiscal discipline. Voters now have cost and tax and cost estimates – some much larger than others – on the election promises from the independent Parliamentary Budget Officer (PBO).

Before the campaign promises, the total gross debt of the federal government was expected to exceed $2 trillion by 2021-25, up from $1.3 trillion in 2019-20, according to the PBO. A recent analysis of Ottawa’s long-term finances concluded that, absent change in spending and tax policies, the federal budget wouldn’t be balanced until 2070.

Before the campaign promises, finds Canada’s debt ranking falling from best in the G7 to fifth worst of 29 advanced countries when total debt is measured, according to the Fraser Institute.

Does red ink matter? When federal finances are in order, there’s more largesse flowing to municipalities. Projects to renew bridges, roads and sewers, for example, are often financed by the three levels of government.

Then there’s budget pressures brought on by the first-ever RCMP union contract just signed with the federal government.

Pay increases are massive – a constable alone will now make up to $106,576 – a jump of $20,000. Back pay will need to be found since the mounties have been without a contract since Jan. 1, 2017.

The District of Sooke, for example, has reportedly tucked away $432,102 in a police reserve fund and $277,555 to pay for the increase in police pay. It doesn’t end there.

Next year it’s responsible for 90 per cent of policing costs, up from 75 per cent, when the municipality’s population will top 15,000 people. Island communities are also negotiating with the province on a cost-sharing agreement of police dispatch calls, estimated to cost the district $300,000.

https://www.sookenewsmirror.com/news/sooke-bracing-for-major-increase-to-rcmp-salaries/

Escalating policing costs are also driving tax increases in Central Saanich.

https://www.vicnews.com/news/central-saanich-policing-costs-driving-property-tax-hikes-in-municipality/

Local governments in the Capital region also face stiff increases in liability insurance premiums.

Premium spikes are being driven by a shrinking pool of insurers, more claims brought on by severe weather, and uncertainty about payout amounts. And after an unprecedented wildfire season in B.C. – the provincial bill alone is estimated at $500 million – premiums are not likely to moderate any time soon.

During the last three years, the City of Victoria liability insurance premiums increased 21 per cent to $371,173. Saanich premiums spiked 48 per cent to $169,917. At the CRD, which is funded by all regional municipalities, premiums increased by 33 per cent to $116,000.

The hikes are certainly not unexpected under the circumstances and modest in dollar terms, but just one more challenge this region will eventually have to face by greatly streamlining service delivery.

Finally, the dunderheads at Victoria city council who want to defund the police will be forced to respond to public pressure and adequately budget for law enforcement.

The recent second quarter community safety report card from VicPD continues to document an organization under stress: The public is increasingly alarmed about crime. Almost one in five officers are not deployable for one reason or another. Response times for medium important calls have hiked sharply.

Most importantly though, there’s an alarming increase in violent crimes downtown and random attacks, that’s left much of the community feeling unsafe. In short, it threatens the reputation of the community and the recovery of the tourism industry.

The clearance rate for violent crime has steadily decreased in recent years. Fewer criminal charges for violent crimes are being laid. Victims are suffering while offenders are getting away with it, an untenable situation for victims and residents.

The revelation raises questions about whether VicPD has adequate resources to do their job, and whether those resources are being allocated properly. It is time to create a regional policing model as one solution to improving law enforcement.

Local taxpayers and our community – particularly the private sector – are still under considerable stress. So, when councils are facing soul-searching budget decisions such as these, it calls for a different or non cost-plus approach to budgeting.

If not during the upcoming municipal election year, when?

The 2018 municipal election is behind us, but thousands of permanent residents in Greater Victoria are left wondering why they were unable to vote.

According to Fresh Voices, an advocacy group for immigrants and refugees, there are 60,000 permanent residents in Vancouver alone that were unable to vote. In the 2016 Census, Stats Canada reported almost 16,000 immigrants of varying ages living just in the Victoria Census Metropolitan Area of 81,655.  

“Permanent residents are engaged,” says Whitey Mitchell, a board member with Grumpy Taxpayer$ and a permanent resident. We take an interest in what is going on and we have input to give as well as a diversity of experiences to offer. I chose to live here and make my life here and want to make this place even better for myself, my friends, and my children.”

Permanent residents have the right to get most social benefits that Canadian citizens receive, including health care coverage, to live, work or study anywhere in Canada, and receive protection under Canadian law and the Canadian Charter of Rights and Freedoms. They must pay taxes – all municipal taxes including school, plus income tax – and respect all Canadian laws at the federal, provincial and municipal levels.

But until permanent residents apply for Canadian citizenship and get it – they can’t vote in any election.

Last spring the City of Vancouver council unanimously voted to extend municipal voting rights to permanent residents and is urging the province to change the laws. At the time the Vancouver Sun sounded a note of caution, describing council’s actions as a “feel-good initiative”  and for the province to consider carefully “the serious implications” of any change.

According to Fresh Voices, more than 45 countries including Australia, Denmark, New Zealand and seven jurisdictions in the U.S. allow permanent residents to vote in municipal elections. Eleven jurisdictions in Canada are looking at the change. 

READ MORE:

Permanent residents can’t vote in municipal elections: This group wants to change that, Global News, Nov. 9, 2018.

Take time to consider extending the right to vote,Vancouver Sun Editorial, Apr. 20, 2018.  

Immigrants in Victoria, The Canadian Magazine of Immigration, June, 2016.  

Census Profile of Victoria CMA 2016, Stats Canada

While residents now have a new bridge ($105 million plus), and are planning for a new Crystal Pool ($69.4 million), plus fire hall and emergency centre ($35.9 million), tax revenue is needed to upgrade other aging City of Victoria infrastructure.

City staff are now developing asset master plans and condition assessments to determine how much capital investment is actually needed – it will likely be hundreds of millions of dollars.“The infrastructure deficit is the difference between what you need to spend to do upgrades and the funding you will have available in the years you need to do those upgrades,” says Susanne Thompson, director of finance.

“The capital budget funding levels have reached sustainable levels for some assets (water), some are close to sustainable levels (storm drains), some projects are shaped through consultation with the community (park upgrades), some require additional analysis to determine the required funding levels (sewer, equipment and surface infrastructure such as street and traffic lights), and some fall short of recommended levels (facilities, roads and fleet),” says Thompson.

Even though the City doesn’t have the exact number, it knows it has an infrastructure deficit and has already started increasing funding levels for infrastructure renewal. For example, for 2017 the planned spending and saving in reserves from property taxes and user fees was about $44 million combined with utilities which follow a pay-as-you-go approach.

“Never before now has careful stewardship of our assets and tax revenue been more important – until all these infrastructure costs are known and addressed, any financial decisions need to be conservative,” says Stephen Ison, board member with Grumpy Taxpayer$.

Nationally, the Canadian Infrastructure Report (2016) puts the dollar replacement value of assets in poor and very poor condition at $10,000 a household (Page 12). In Victoria there are 49,212 private households according to the 2016 census.

That provides a rough estimate of almost $500 million for its infrastructure deficit, although it may be more since Victoria is considered an older city. The report included costs for potable water, wastewater, stormwater, roads, bridges, buildings, sport and rec facilities and transit.
City of Victoria was one of the few major jurisdictions not to participate in the Canadian Infrastructure Report.