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Cap property tax rates

Author: Maureen Bader 2009/10/12

Ever wonder why property tax rates seem to go nowhere but up? It's because municipal governments first decide how much they are going to spend, then figure out how much property taxes have to go up by to cover off the spending spree.

The Canadian Taxpayers Federation met with the Minister of Community and Rural Development to deliver almost 2,000 petitions demanding legislation be passed at the provincial level to cap property tax rates and limit property tax increases to the rate of inflation.

The current property tax system is unpredictable and punishes homeowners. Every year, homeowners are left wondering how much their property tax bill will be. This is because of the backwards municipal budgeting process.

Municipalities get away with this because they create the myth of a trade-off between higher taxes and lower spending, but it is time to ask: why not deliver municipal services more cost-effectively?

An even better question would be: should a municipal government be providing that service at all?

Municipalities have to stop spending so much. Between 2002 and 2008, municipal spending in B.C. rose by almost 50 percent. Property tax revenue rose by 26 percent. The general price level rose by about 12 percent and B.C.'s population increased by about 8.5 percent during that period. Put into this perspective, a 36 percent increase in property tax revenue represents a tax grab that must be stopped.


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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