Staff in North Cowichan have informed council that it will be difficult to keep the increase to property taxes in 2022 below seven per cent.
That’s significantly higher than the 1.4 per cent tax increase that was implemented in 2020 due to the financial uncertainty that was created during the beginning of the COVID-19 pandemic, and the 2.5 per cent increase in 2021, but council decided at its meeting on July 21 to direct staff to continue with a recovery budget for 2022 that would see a steady tax rate increase over the next few years in North Cowichan’s five-year plan.
That will see a gradual return to sustainable capital programs after the pandemic, and would give the municipality the ability to maintain current service levels.
The director of financial services Talitha Soldera also said North Cowichan is facing added expenses in 2022, including financing costs of the new approximately $48-million RCMP detachment, changes to the RCMP contract and inflationary increases.
She said council’s decision to continue with a recovery budget in 2022 could result in a tax increase of between 5.3 per cent and 7.8 per cent.
“But we don’t know what to expect in 2022,” Soldera said.
“Will the economy return to what it was before the pandemic, or will it continue to be impacted? Also, these budget projections do not include any new operating or capital costs, and discussions about staffing service levels and staffing priorities will occur during the department business plans review in November.”
Coun. Christopher Justice wondered how such a significant tax increase would impact many homeowners in North Cowichan who are facing financial difficulties.
CAO Ted Swabey said that, on top of having to deal with the ongoing downloading of financial responsibilities from senior levels of government to local governments, North Cowichan is currently providing some expensive services that it isn’t required to do, and these services cost a lot of money and take up a lot of staff time.
He said he thinks North Cowichan’s environmental program is great, but it’s expensive, and taxpayers are also on the hook for about $1.5 million a year for the running of the Cowichan Aquatic Centre.
“Taking on services like these are part of the reason why we’re seeing increases in taxes, and I don’t see an end to that,” Swabey said.
“We don’t have many sources of revenue, and we’re also losing another $1 million a year that we would normally get from our forests. I’m not saying that [not logging in the municipal forest reserve] is the wrong thing to do, but that’s the reality. So here we are and I think it will be difficult to keep the tax increase below seven per cent next year.”
But Swabey said councils don’t just take on these extra programs and services on a whim, but do it because they were elected and have a mandate, and the community has made it clear it expects certain things from council members.
“So the burgeoning of local government taxes is connected to services that are being provided outside of the core services,” Swabey said.
“But, compared to federal and provincial taxes, what the community receives from local government taxes is far more tangible.”
Mayor Al Siebring acknowledged that there are some taxpayers in North Cowichan who feel the financial impacts of increased tax rates more than others.
“That’s [council’s] challenge, not staff’s, so we must budget accordingly,” he said.