Are business taxes in the City of Victoria excessive? At first glance, it might appear so. Tax-wise, it鈥檚 cheaper to set up shop in almost any other district of the capital region.
Only Colwood levies a higher rate, and then just by a hair. Otherwise, Victoria鈥檚 commercial scale is nearly double that of Oak Bay, 63 per cent more than Metchosin鈥檚, 61 per cent greater than Langford鈥檚.
In addition, a recent study of business tax revenues found Victoria collected the highest amount, per capita, of 10 major cities in B.C. Even 91原创, with its enormous commercial sector, took in 30 per cent less.
The issue demands attention, because we鈥檙e seeing growing numbers of boarded-up store fronts along major arteries like Government Street.
Victoria鈥檚 new mayor, Lisa Helps, pointed to this problem during her election campaign: 鈥淚 was talking with a downtown business owner yesterday evening. She, like many, is concerned about the increased number of vacancies downtown over the past few years.鈥�
In short, Victoria鈥檚 taxes might indeed be an obstacle to commercial development in the city core. But if so, who is responsible?
Some blame free-spending municipal politicians, and there is a degree of justice in that.
Across B.C., local government expenditures climbed 37 per cent between 2000 and 2011 (after allowing for inflation and population growth). Provincial ministries got by with only half that amount 鈥� 19 per cent.
However, there is another way to look at this. Over the past two decades, a succession of federal and provincial governments have offloaded far-reaching responsibilities onto municipalities.
In 1990, local governments across B.C. were expected to contribute one-third of the funding for capital projects. By 2012, their share had climbed to more than half, as senior governments backed out.
Likewise, the provincial government has dealt with deficit pressures by skimping on care for the mentally ill. That, too, has taken a toll. Municipal police budgets rose 134 per cent between 2001 and 2010. A good part of the increase went for incidents that were mental-health related.
Local governments have also been forced into huge expenditures for the renewal of sewage systems. The capital region upgrade will cost at least $780 million. 91原创 faces a price tag well over $1 billion.
It鈥檚 true there is a degree of cost-sharing for these projects. In Victoria, Ottawa and the province will each contribute roughly a third of the money needed. But the funding comes with arbitrary time limits that appear increasingly unrealistic.
Last, there is the matter of subsidized housing for the poor. That used to be almost exclusively a responsibility of senior governments.
But Ottawa has largely abandoned this task and the province has reduced its contribution. It isn鈥檛 difficult to do the political math here.
The burden of homelessness caused by these withdrawals falls most heavily on urban cores. And who gets the blame? Municipal politicians, who ignore such misery at their peril.
In short, Victoria鈥檚 business-tax rates owe much to a predatory campaign by senior governments to pass the buck. In effect, the duties of local, provincial and federal governments have become hopelessly entangled. Unduly high taxes are only one of the consequences.
What can be done? There is no legal recourse. Nothing in our statutes guarantees a living wage for local governments. Nor is there a clear enough demarcation of responsibilities to prevent offloading.
Municipalities are, by law, reliant on the grace and favour of provincial governments. They have no independent status to fall back on.
The solution, if there is one, must be political. There is no public interest in blurring lines of accountability.
Cash-strapped senior governments must stop treating our cities as a convenient dumping ground, or else their own credibility will suffer.
