BC municipalities on fiscally unsustainable path

A new CFIB report reveals the vast majority of British Columbia’s municipalities have been increasing their operating spending at an unsustainable pace since 2003. Small business owners have expressed through surveys that increases in municipal spending should be kept to the rate of inflation and population growth. 

The 8th edition of the BC Municipal Spending Watch ranks 152 municipalities based on 2003-2013 inflation-adjusted operating spending growth and the most recent spending levels per capita in 2013. CFIB makes a series of recommendations in this report to enable municipal governments to better control growth in operating costs, including: conducting formal core service reviews, increasing fiscal transparency, and adopting sustainable wage growth policies.

Key findings:

  • Only 6 out of the 152 municipalities (4%) examined in BC kept operating spending in line with inflation and population growth over the past decade. No large municipalities (population of 25,000 and over) made the list.
  • BC’s population grew by 13 per cent from 2003 to 2013. Over the same period, operating expenditures adjusted for inflation ballooned by 49 per cent – 3.75 times greater than population growth.
  • A reasonable rate of growth for a municipality is inflation and population growth. In BC, the excess spending above this level over the past ten years represents $8.2 billion dollars. What this means is a BC family of four could have saved on average $8,035 in municipal taxes had municipalities kept their spending in control.

  • In 2003, BC residents spent on average $959 dollars for the operations of their local government (total municipal operating spending divided by total BC population). In 2013, that dollar amount increased to $1,260 per person when adjusted to inflation, representing a 31 per cent increase in operating spending per capita in BC.

  • BC’s major centres, Vancouver and Victoria, increased their operating spending by 29 and 28 per cent respectively from 2003 – 2013 after adjusting for inflation and population growth.