There’s a moral to this story. Much of what is being done now could be done for less money and better. It’s a lesson which is constantly repeated in the private sector, where the motivations are different: do it better and less expensively and you get a competitive advantage. Fail and eventually you go out of business.
Cities, of course, rarely go out of business.
That brings me to Vision Vancouver’s endless tax hikes. In the last five years, Vancouver’s taxes have risen at any average rate of 2.3%, or more than twice the rate of inflation. This year - and I will have more to say about this year below - property taxes will rise by 4.24% against an inflation rate in British Columbia of 2%. This is a remarkable record of failure to manage public expenditures.
But it’s worse than that.
First, for a city that cries so loudly and often about the problem of housing affordability it is nothing short of embarrassing that the one thing it could do to alleviate that problem across the board, namely restrain tax increases, it cannot bring itself to do. The result is that for those who are homeowners, whether they be people who scrimped and saved three decades ago to buy a detached house, paying mortgage rates of as high as 20%, or a young couple who bought a condo a couple of years ago because they had cobbled together just enough money for a down payment, all face the prospect of increasing costs of home ownership because of property tax increases. Increases at rates twice as fast as the price increases in any other aspect of their lives. Is this because of some rapacious capitalist plot, or the evil spectre of foreign buyers turning residential housing into safety deposit boxes for overseas money? No. The people I’m talking about already do own houses. There are tens and tens of thousands of them. And every year, the city government that claims to care about affordability makes home ownership less affordable.
Second, Vision Vancouver has now found a very clever trick that has managed to distract everyone’s attention from this serious problem.
Last year, at more or less the last minute in the City’s annual budget process, the Vision council decided to tack on an extra half a percentage point to its already excessive tax increase. The stated purpose for the extra money was to help address the fentanyl crisis. Now no one could question the urgency of the need to do something to respond to the fentanyl crisis. But here’s what happened. First, no one questioned whether there might be some place in the City’s $1.3 billion budget where funds were being spent for a purpose that was less vitally important than the fentanyl crisis. Some initiative that could be reduced in scope or even eliminated in order to help address this emergent crisis. No, the decision was made to add 0.5% to property taxes to pay for this new initiative. Why do you think Vision made this decision? You might think it’s because they were really concerned about the fentanyl crisis. Well, perhaps they were. But I think the reason they did it they way they did it was to distract attention from the fact that they were raising property taxes by twice the rate of inflation.
The trick worked, by the way. When you go back and read the headlines in the media accounts of last year’s budget process, you’ll find headlines like this: “City increases taxes by 0.5% to address fentanyl crisis.” Um, actually, the City raised property taxes by 3.9%.
So I credit Vision with one thing. When they find a political trick that works once, they’ll use it again. And so it is hardly surprising that this year they trotted out another version of this neat trick. On the very eve of passing this year’s budget, Vision Councillor Raymond Louie introduced a motion asking that the proposed tax increase of 3.9% (already twice the rate of inflation in BC) be increased by a further one third of a percentage point to pay for a number of important initiatives.
Were we fooled again? Of course we were! Instead of having a really good debate over the important question of how to protect property owners from yet one more excessive tax increase we had instead a thoroughly entertaining political scuffle about the process by which these initiatives were added at the last minute, rather than introduced earlier. By the way, here are the initiatives that apparently no one had ever thought of before the day of the budget debate in City Council:
• $1.1 million for a tactical response team to review city-wide zoning regulations and establishing a renter protection manager.
• $550,000 to support a bid for Chinatown to be named a UNESCO heritage site and support for "Chinatown Historic Discrimination programming."
• $500,000 for additional social grants not in the original budget.
• $300,000 to "reduce the amount of time to achieve permit approvals.”
Okay, we have to pause for a minute and scratch our heads at the prospect that nowhere in the machinery of a City government that now has a budget of $1.4 billion is there a single poor soul who is not so overburdened by the pressure of the daily grind of delaying building permit approvals that he or she could not turn his hand to the business of asking the UN if they’d like to declare Chinatown a UNESCO heritage site.
No, this was a stunt alright. A repeat visit of last year’s trick.
Were we fooled again? The discourse ought to be about how the City undermines housing affordability with tax increases. That’s a hard conversation, about hard choices, the kind of choices governments make when they take fiscal discipline seriously. But instead the discourse is about the politics of last minute budget manoevers.
So this brings me back to the Elon Musk story. I was thinking of that story as I was listening to Councillor Louie endure the persistent questioning of CBC’s Steven Quinn one afternoon last week. In Councillor Louie’s mind, every activity of the City requires staff, and if you want to add or increase activities, you have to increase staff. It’s a simple equation. It’s another version of an old familiar story, that the answer for any problem in government is always more. More money. More staff. If you want to support a bid to Chinatown to be named a UNESCO heritage site, you need to hire more people to do it.
We need a different approach. We need an approach that is founded on this principle: Do it differently, get better results, and do it for less money.
An approach that is relentlessly unforgiving about public priorities, that funds only those which make it to the top of the list of necessity, and drops those that are simply yesterday’s hangers on.
According to a May 2017 Fraser Institute study, it takes three times longer to obtain a building permit in Vancouver than in neighbouring Burnaby. What if we had a city council who cared enough about housing affordability, who cared enough about the burden of taxation, to say this to its planning staff:
“You must change the way you do business. You must reduce the time it takes to approve building permits. Not so that we can do it as quickly as Burnaby. We will do it three times faster than Burnaby. And with better results. And for less money. Now go away and make it so.”
Remember the cardinal rule. We always get the government we deserve. Two years in a row, Vancouver has covered up its lack of fiscal discipline with clever last minute distractions that are intended to hide the real problem Are we fooled? Next November we might find out.