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Editorial

CFIB redefines the S-word

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“Sustainability” has been linked to Whistler the way the Hockey Night in Canada theme song was linked to the CBC, although it probably hasn’t cost Whistler $500 every time it used the S-word.

But a report by the Canadian Federation of Independent Business on municipal spending in British Columbia from 2000 to 2006 has a different definition of “sustainability”. The report found that “…the overwhelming majority (of municipalities in B.C.) have increased spending at rates that well exceeds population and inflation growth, a trend that is unsustainable in the long run.”

Near the top of the CFIB list of offenders was the Resort Municipality of Whistler.

The CFIB study starts from the premise that growth in operating spending by local governments should just keep pace with population growth and inflation. But between 2000 and 2006 very few municipalities kept spending growth to that benchmark. British Columbia’s population and inflation growth was 20.1 per cent, while aggregate operating spending at the municipal level grew by 35.7 per cent. In other words, spending across the province was 1.8 times higher than population and inflation growth. The CFIB calls this the “fiscal responsibility gap”.

Whistler’s fiscal responsibility gap was 3.36.

The CFIB also measured municipal spending per capita, and singled out Whistler for special attention.

“The Resort Municipality of Whistler… managed to spend more per person than any other municipality in the province, and did so by a large margin. In 2006, per capita spending in Whistler was $5,042. Although this is partly due to significant spending on parks, recreation and culture, expenditures were high in all categories, and represents per capita spending that is $2,000 higher than any other municipality in the province.”

Now, the RMOW can justifiably argue that any formula that takes Whistler’s permanent population as a base point of measurement is fundamentally flawed. Population growth plus inflation may provide a sound baseline for measuring most municipalities but Whistler’s services and infrastructure have always been designed to meet the needs of 40,000 or 50,000 visitors as well as the local population of 10,000.

Likewise, tax dollars raised per capita ($3,890 in Whistler; Kitimat was second highest in the province at $1,446) is not particularly meaningful in Whistler, since the resort community was designed to have a large percentage of absentee property owners. In fact, over the 2000-2006 period the tax base may have grown faster — through the sale of new condo-hotel units to absentee owners — than the permanent population.

However, the increases in RMOW revenue and spending between 2000 and 2006 were significant. And they continue, with the 5.5 per cent tax increase and additional fees for composting and recycling added to this year’s tax notices.

It’s not that municipal revenues are going to fund things nobody wants — studies have shown public support for increasing spending on arts and culture and parks and recreation. And costs for policing and other services have been downloaded to Whistler and other municipalities. The Federation of Canadian Municipalities sent out a release last month that described how municipalities have seen their share of policing costs rise dramatically over the last 20 years, while municipal forces have had to take on more and more of the traditional federal enforcement roles.

“Even as property taxes skyrocket in municipalities across the country, local taxpayers are subsidizing federal police enforcement to the tune of more than $500 million a year,” according to a study by the FCM.

Municipalities have been calling for some system of revenue that makes them less reliant on property taxes — like the hotel tax Whistler lobbied for years to get.

As Union of B.C. Municipalities President Susie Gimse said in a release that went out the day after the CFIB study was published: “For some time UBCM has maintained that our current system of financing local governments, which involves a reliance on property taxes, is outdated. ‘There is only one taxpayer,’ said Gimse, ‘and when you have the federal and provincial governments lowering taxes and running surpluses, what do you think will happen at the local level?’”

But that doesn’t explain all of Whistler’s problems. For most of the last 20 years Whistler’s numbers — property values, visitors, construction starts, room nights — were increasing, some at exponential rates. And municipal spending kept pace.

The biggest, self-imposed brake on Whistler’s municipal revenues is the cap on development. Revenue from development is drying up — at the same time we want and expect more services. This is unsustainable.

Assuming we want to keep a cap on development, the answer would seem to lie in raising the year-round occupancy rate, in effect increasing Whistler’s population of residents and visitors. That is the plan, but it’s going to take some time for occupancy rates to close the fiscal responsibility gap.

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