Lake Cowichan is No. 1 in the 2014 BC Municipal Spending Watch published this week by the Canadian Federation of Independent Business.
The small community is the best ranked municipality in B.C., up from fourth place last year.
The municipality has a 2012 per capita operating spending of $945 and is one of the few B.C. municipalities to have decreased its 2000 to 2012 real operating spending per capita, reducing it by three per cent.
North Cowichan was ranked sixth among B.C.'s largest municipalities, which makes it 39th across all the province's municipalities, up from 42nd last year. Among Vancouver Island municipalities, Duncan placed seventh (22nd overall, up from a rank of 60th last year) while Ladysmith was eighth on the Island and 28th overall (down from 24th last year).
The think tank is concerned that municipalities are looking at businesses as "cash cows", according to CFIB director Richard Truscott.
But he has sympathy for local politicos, admitting that a lot of challenges are facing municipalities, like failing infrastructure and a lack of cash to pay for repairs or upgrades.
"One of the biggest worrisome trends, however, is that, as municipalities grow, so does their appetite for more spending of the tax dollars."
Truscott said the concern, especially for small business, is that "one way municipalities have been able to pay for expanding their services and increasing their operating budgets is increasing taxes on business. Our members are certainly feeling the squeeze as well."
There's a push everywhere to try to keep costs down, especially on Vancouver Island, where there are a lot of seniors.
"The taxable community is maybe smaller than elsewhere.
And I know that the Island economy has not exactly been going gangbusters, either. That really doesn't help," he said.
Truscott said he was pleased to note that most local governments are open to "a conversation about the issue and what we might potentially do about it to better control spending and make sure the financial outlook for municipalities is on a sustainable path." Taxes and spending are front and centre out during the run up to the election as candidates jockey for positions on various councils and Truscott is welcoming it.
"Those are the meat and potatoes issues that small business owners want to talk about," he said.
The other part of municipal spending is taxes, he said, chastising local governments for passing the financial woes down to local business.
"That's really a short-sighted strategy to squeeze out a few more tax dollars in the short term but in the long haul you can either drive those businesses out of the municipality or into the ground." Looking at communities where there are a troubling amount of empty storefronts, Truscott said, "It's really sad. Bigger businesses have more resources to hold on through tough times. But for small businesses in highly competitive markets and on very thin profit margins, even a small economic downturn or new taxes could be the death knell."
The CFIB knows the problems often drop on municipalities from above.
"While municipalities are right to complain about downloading from federal and provincial governments, the final place that those additional costs get downloaded onto is our taxpayers, our small businesses and our communities. That's where the buck stops," he said.
Lake Cowichan Mayor Ross Forrest said he was delighted to learn of his town's top ranking position.
"It's from over a period of 12 years so it's a testament to not just this council that's been in for six years but the council leading up to that. The Town has obviously done a good job of controlling things.
"They do say statistics don't lie. And they have facts to substantiate this. I think it's very good," he said.
"Obviously our staff played a big role in this. We as a council work very well together with our staff to see these things through," Forrest said, adding the majority of that spade work has to be done by people who can get onto it on a daily basis.
A large part of the reason for the Lake Cowichan success is that they look for grants under every rock.
"We always try to not spend a dollar for a dollar when we are doing projects. If we can leverage other money from other sources, we always attempt to do that. It's the only way a small town with a small tax base can do things. We don't have industrial tax base in our town and it's difficult on a small residential tax base to pay for everything," Forrest said.