Property values across British Columbia jumped up by 23 per cent according to this year's assessment rolls. Growth is spread throughout the province: Vernon, Kelowna, Fort St. John, Courtenay, Sidney, Victoria and Vancouver. For most British Columbians their home is their primary asset and news of an increase in value should be cause for celebration! But not so fast.

Homeowners know all too well what increased property values mean for their annual municipal tax bill, it increases too! The probable increase is due to a flawed local taxing system.

While assessments are being mailed out, municipal politicians are wringing their hands and writing out their budget wish lists for the coming year. After the price tag has been finalized your local council then calculates what the tax rate needs to be in order to pay for it all. Then dear homeowner, you get your municipal property tax bill in the mail. It's safe to say that as a rule, the price tag for municipal wish lists, continues to grow and hence, so does your tax bill.

With such a backward tax system in place, it is not surprising that total municipal revenues in British Columbia increased 44 per cent between 2001and 2004! The largest drivers of the increase: property taxation revenues, transfers from other levels of government and the latest squeeze, developer contributions (monies collected from commercial and residential property developers).

Municipal coffers are ballooning, while at the same time property owners, not realizing any net gains in income, are being hit with higher and higher property taxes.

After conducting an exhaustive review of average residential property assessments and tax rates for 60 municipalities in the province, the Canadian Taxpayers Federation (CTF) found total property tax bills increased in every region between 7 to 67 per cent in the last five years alone. The solution: the CTF proposes a cap on property tax bills, limiting annual increases to the rate of the consumer price index.

A property tax cap would provide homeowners the much needed certainty and predictability of annual tax bills. Furthermore, it would provide municipalities with a stable revenue stream.

As other levels of government have improved financial reporting, transparency and accountability, municipalities have escaped the grasp of reform. It's time for local governments to improve their budgeting and tighten their fiscal belts.

Local governments should be required to allow for meaningful consultation with the public before adopting their annual financial plan. All too often, the current process has operated as a rubber stamp, not allowing the public time to consider proposed budgets. Ratepayers must also be assured that they are getting value for their tax dollars, therefore the CTF is recommending that the purview of the Auditor General be extended to municipal services.


The CTF has launched a petition for a property tax cap, available on our website at www.taxpayer.com. Also, property owners are urged to take a copy of the CTF report, "The Property Tax Bite," on our website, to their local council meeting when the upcoming budget is debated.

It's time to end the uncertainty and reign in the discretion of local governments and adopt a cap on property tax bills.