The Municipality of North Cowichan is considering raising taxes by 2.31 per cent in 2021.
If council approves the increase at that percentage, the average household in North Cowichan would pay approximately $45 more in property taxes than in 2020.
Mayor Al Siebring said council had instructed staff to keep any projected tax increase for 2021 as low as possible so that the financial implications on the taxpayers are kept to a minimum as the COVID-19 pandemic continues into a second year.
He said the $4.4 million the municipality received earlier this year from the province to help offset costs related to the ongoing pandemic through the COVID-19 Safe Restart Program for local governments has been instrumental in keeping the projected tax increase down to a minimum.
A tax increase as high as seven per cent in 2021 was considered possible last June.
“[The provincial funding] certainly helps a lot,” Siebring said.
“We’ve had to delay a number of projects last year [when council implemented a 1.4 per cent tax increase instead of the 4.4 per cent that was originally recommended as it tried to keep the increase low due to the pandemic], but potholes don’t fill themselves and these types of things still need to be done, so the government funding should still allow us to get stuff done while keeping the tax increase for the year low.”
But Siebring cautioned that the projected tax increase of 2.31 per cent in 2021 is not final, and council and staff have until May 15 to continue to tweak the budget.
He said council decided at a recent meeting to transfer the salary of the municipality’s parks and recreation director to general revenues out of the forest reserve fund, and that could see a small tax increase.
“But we’re still waiting on the final assessments for the year from the province, and growth may be larger than we anticipated, which could see a decrease in taxes as they would be spread out over more properties,” he said.
James Goodman, North Cowichan’s manager of budgets and infrastructure, said that in the municipality’s five-year financial plan, the tax increases over the next two years are projected to be almost double what they are expected to be in 2021, with plans for a 4.54 per cent increase in 2022 and a 4.81 increase in 2023, largely the result of the new $48-million RCMP detachment that is being constructed in the municipality.
North Cowichan is responsible for borrowing all the money to construct the facility, but the RCMP and the province will be paying back 60 per cent of costs at a later date.
Goodman said the projected tax increase in 2024 of 3.38 per cent would still be relatively high and could happen if the ongoing depletion of the proceeds from logging in the 5,000-hectare municipal forest reserve continues at its present rate.
North Cowichan had set aside $2.1 million from the profits of logging in the MFR in the forest reserve fund by 2019 but, with harvesting in the MFR currently on hold until the review is complete, the municipality has been drawing on the fund to cover the costs of day-to-day operations in the reserve, as well as the review itself.
Staff estimate that if North Cowichan continues to draw upon the forest reserve fund at the current rate, it will be completely used up by 2023.