CANADA – Following the release of its national report on the growth in operational expenditures by Canada’s biggest cities, the Canadian Federation of Independent Business (CFIB) has released a new report on spending by municipalities in BC. The 8th edition of the BC Municipal Spending Watch reveals 96 per cent of the province’s 152 municipalities increased their operating expenses at an unsustainable pace since 2003.
The report ranks all 152 municipalities based on 2003-2013 inflation-adjusted operating spending growth and the most recent spending levels per capita in 2013. The worst ranked municipalities show inflation-adjusted spending far outpacing that of population growth, and had higher than average operating spending per capita.
For a second year in a row, the municipality of Stewart ranked as the worst performer. On the other end of the spectrum, Coldstream was ranked best due to its low operating expenditures per capita and relatively slow spending growth. None of the provinces’ largest cities (population of 25,000 and over) managed to maintain spending levels at a sustainable rate, with West Vancouver and Langford performing the worst.
According to the overall provincial analysis, the BC population in 2013 was 13 per cent higher than in 2003, but the total inflation adjusted municipal operating expenditures rose 49 per cent, 3.75 times faster than population growth. Over the ten-year timeframe, the cumulative spending beyond inflation and population growth was $8.2 billion. Over this period, only six of the 152 BC municipalities managed to keep operating spending at or under the rate of inflation and population growth.
“Had municipalities kept their operating spending at the rate of inflation plus population growth over the past ten years, the BC family of four could have saved, on average, over $8,000 in municipal taxes,” says Richard Truscott, Vice-President of BC and Alberta. “Spending growth of this magnitude is simply unsustainable.”
“The vast majority of municipalities continued to spend at unsustainable rates over the past ten years. Thankfully, a few mayors and councils have attempted to get on a better path. The rest appear to ignore the reality that excess spending will result in much higher taxes on businesses and residents,” adds Truscott.
The CFIB report makes a series of recommendations to enable municipal governments to better control growth in operating costs, including: limiting spending increases to the rate of inflation and population growth, conducting formal core service reviews, increasing fiscal transparency, and adopting sustainable wage growth policies.
– The full CFIB report, entitled BC Municipal Spending Watch 2015, is available at http://cfib.ca/a7815e.