Update: Mayor Ken Sim touted the approval Tuesday of a 3.9 per cent property tax hike as “good news” after he and his ABC Vancouver colleagues were unanimous in their support for balancing the city’s $2.36-billion operating budget.
The increase — with one per cent of the 3.9 per cent to cover infrastructure costs — is much lower than the 7.28 per cent and 10.7 per cent hikes in the first two years of Sim’s administration.
The city’s communications department issued a news release after the council vote that said the 3.9 per cent increase coupled with an 18.2 per cent hike in utility fees will result in the following average annual increases for 2025:
• $54 for a condo or strata unit (assessed at $806,000), with an additional $78 increase in utilities fees.
• $149 for a single-family home (assessed at $2,209,000), with an additional $386 increase in utilities fees.
• $286 for a business property (assessed at $1,268,000), with an additional $377 increase in utilities fees.
“If you're a resident of the City of Vancouver or if you own a business in the City of Vancouver, if you support our team members, if you believe in fiscal responsibility, today is a great day,” Sim told reporters. “We've had a plan in place when we were elected. We wanted to bring fiscal responsibility back to the City of Vancouver.”
'Optimizing resources, enhancing efficiencies'
How Sim and his team achieved such savings to reduce a higher tax hike — the city’s finance staff initially estimated it at seven per cent in May — was the result of a combination of actions, according to a separate news release from the mayor’s office.
“This year’s savings were achieved by optimizing resources, enhancing efficiencies and refocusing on core services,” the release said. “Additional contributions came from increased dividends by optimizing the Property Endowment Fund — a key recommendation from the mayor’s budget task force.”
Glacier Media requested a line-by-line accounting of how the savings and efficiencies were achieved, but that information was not available at deadline. City staff said there were $26.3 million in “cost savings and revenue opportunities” to reach the 3.9 per cent.
The Vancouver Police Department had requested a $434-million budget, but council decided to fund closer to $425 million, which includes a permanent body worn camera program that will see more than the current 100 officers using the technology.
Police Chief Adam Palmer’s request for an additional $1.4 million to enhance the $1.1-million budget for protests will also be met. Palmer told reporters he was “happy” with the budget his department will operate with in 2025.
“It allows us to address the critical areas that we wanted to,” the chief said. “We feel supported. Speaking on behalf of the VPD and our members, we're very happy with the current mayor and council, and we’ve felt supported ever since [the October 2022 election].”
The approval of the budget didn’t come without opposition, as Green Party councillors Adriane Carr and Pete Fry abstained on voting for items in the police budget, including the body worn camera program.
“Councillor Fry and myself voted against the body worn cameras motion earlier this year, and we did so because there was a lot of public concern around how they could possibly be misused,” Carr said. “I'm not saying we shouldn't have the police fully equipped…but I have some questions around whether body worn cameras is the answer.”
The city’s approved 2025 capital budget is $880 million.
The story below was posted Tuesday morning, prior to council’s vote on the budget.
ABC Vancouver city councillor Mike Klassen says he and his party colleagues intend to set the 2025 property tax hike at no more than 3.9 per cent — an increase considerably less than the 7.28 per cent approved this year and the 10.7 per cent in 2023.
Klassen, Mayor Ken Sim and the eight other members of council, including Green Party councillors Pete Fry and Adriane Carr, will meet at city hall Tuesday to the finalize the city’s $2.36-billion operating budget.
ABC has a super majority on council, so the 3.9 per cent hike is likely to pass.
“A lot of credit goes to our staff, who've really leaned into this and worked very closely with our team to make these changes,” said Klassen in an interview Monday. “Nobody’s getting laid off and city services are being maintained.”
City staff had earlier said a seven per cent tax hike was needed to balance the 2025 budget. That was before a Sim-driven council motion in May requested a draft budget be balanced with no more than a 5.5 per cent hike.
Now Klassen says the number crunching done with staff, which includes acting on recommendations from the mayor’s budget task force, indicates council can balance the budget with a 2.9 per cent hike.
Another one per cent would be directed at the city’s $500-million infrastructure deficit for a total hike of 3.9 per cent. The last time a tax hike was this low in Vancouver was when Kennedy Stewart’s administration increased taxes by 3.87 per cent in its first year.
Klassen estimated that approximately $15 million in savings and efficiencies had been achieved since council received an update on the budget in May from the city’s finance team.
Property Endowment Fund
Better management of the city’s Property Endowment Fund, optimizing city services by decreasing duplication in departments and refocusing on the city’s core services were examples Klassen cited to reach the 3.9 per cent.
City staff had earlier pointed to a hike in fees to cover cost increases, expanding services in on-street parking, street furniture contracts and a parking revenue strategy to help bring down the proposed tax hike.
Identifying incremental revenue through sponsorships, advertising, naming rights and donations were other areas that led to savings and efficiencies, according to the draft budget report.
What’s unclear though is how council will handle the Vancouver Police Department’s operating budget request, which is $434 million — roughly $10 million more than the city’s finance staff said was acceptable.
The VPD’s request — which is technically made by the Vancouver Police Board — includes $6 million to implement a permanent body worn camera program and an additional $1.4 million to cover the policing tab to handle the increasing number of protests in Vancouver; the department’s current protest budget is $1.1 million.
“There definitely have been some areas of the police board budget that we've asked them to either forego, or we're either not funding, or we're asking them to come in with lower numbers to get to the 3.9,” Klassen said.
“[Police Chief Adam Palmer] has been very much included in all of these conversations and recognizes the need to try and make sure that we are increasing at a responsible rate, but also making sure that public safety is at the top of our priority list.”
'Slash bloated budgets'
A coalition of housing experts, academics, builders, businesses and property tax appeal professionals issued a news release Monday showing how taxes are “clobbering” taxpayers year after year with hikes.
A chart indicated taxes in Vancouver will have cumulatively reached 46.95 per cent since 2019, if council were to adopt a 5.5 per cent hike Tuesday.
“Two years after the ABC government’s bold promise to slash bloated budgets, Vancouver businesses — already struggling under the weight of a brutal three-to-one tax ratio compared to homeowners — are left wondering: where’s that 'sharp pencil' they were promised?” the release said.
In April, a group of small business leaders argued unsuccessfully at city hall to have council reduce a portion of the property tax load that businesses will pay this year and shift it to homeowners’ bills.
Council was unanimous in rejecting the leaders’ pleas and based it on an independent review of the city’s tax policy by Ernst & Young, which concluded there was “no compelling evidence” to shift a bigger portion of tax to residential property owners.
The leaders were asking for a two per cent shift over four years. Residential property owners currently pay 57.1 per cent of the tax share, and non-residential 42.9 per cent.
'We don't think it's the right time for that'
Paul Sullivan of Ryan LLC, who leads the Business Tax Alliance, a partnership with B.C. business improvement associations, supplied a handout to council that compared property tax rates in municipalities.
Sullivan was one of the people quoted in Monday’s news release from the coalition.
“If you draw a line through most of those municipalities, you're sitting at about $300 per capita, and Vancouver's sitting there at $500 per capita,” Sullivan told council in April. "And under your watch, that gap is rapidly changing. You ought to be alarmed by this.”
Sullivan pointed out the tax base has grown with the increase in new homes.
“In the past 10 years, we have grown 600 new commercial properties and 25,000 new residential properties — that's a growth rate of 42 to one,” he said. “In the past five years, it's gotten substantially worse. We've had a total of 68 new properties in commercial and 12,000 residential. That's 184 to one.”
Glacier Media read part of the coalition’s release to Klassen.
“We're not prepared to make that tax shift at this time,” he said.
“We don't think it's the right time for that, and we've been pretty clear with Paul [Sullivan] about that. But I would say that from what we've heard just in back channelling with the Board of Trade and the BIA partnership, these kinds of numbers [the 3.9 per cent] are going to make them feel like that we're on the right track.”
Taxpayers will also face increases in utility fees, with overall utility rates expected to increase by 18 per cent in 2025 and an average of five per cent annually from 2026 through 2029.
Tuesday’s council meeting begins at 9:30 a.m.
