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BC municipal governments on unsustainable fiscal path

The 2016 British Columbia Municipal Spending report shows that inflation-adjusted municipal operating spending increased by 48 per cent from 2004 to 2014, compared to population growth of 12 per cent. Small business owners have expressed through surveys that increases in municipal spending should be kept to the rate of inflation and population growth. 

The 9th edition of the BC Municipal Spending Watch ranks 152 municipalities based on 2004-2014 inflation-adjusted operating spending growth and the most recent spending levels per capita in 2014. There are a series of recommendations in the 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 5 out of the 152 municipalities (3 per cent) examined in BC kept operating spending in line with inflation and population growth over the past decade. None of the 20 largest municipalities made the list.
  • BC’s population grew by 12 per cent from 2004 to 2014. Over the same period, operating expenditures adjusted for inflation ballooned by 48 per cent – four times faster than population growth.
  • In BC, the excess spending above population growth and inflation over the past ten years represents $8.6 billion dollars. This means is a BC family of four could have saved on average $7,445 in municipal taxes had municipalities kept their spending on a more sustainable path.
  • In 2004, BC residents spent on average $889 dollars for the operations of their local government (total municipal operating spending divided by total BC population). In 2014, that dollar amount increased to $1,178 per person when adjusted to inflation, representing a 33 per cent increase in operating spending per capita in BC.
  • BC’s major centres, Vancouver and Victoria, both increased their operating spending by 23 per cent from 2004 – 2014 after adjusting for inflation and population growth.

To see how all municipalities stack up, see the report. Detailed information for the 20 largest municipalities in BC can be found in the Major Municipality 2004-2014 Spending Backgrounder.

November 21, 2016

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Topics in this Article: Local Government

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