By Andrew Mitchell
A fool and his money are easily parted, but these days an honest man doesn’t stand much of a chance, either.
Like many people, I learned the value of a dollar the hard way. I made dollars, spent dollars, squandered dollars, borrowed dollars, paid more dollars on the dollars I’ve borrowed, and even managed to save a few dollars here and there. Now that I’m finally at a juncture in my life where I can finally appreciate a dollar’s true value, the same dollar is suddenly worth a lot less.
Costs of living that used to increase incrementally have been growing in leaps and bounds in recent months as the economy sinks into a potentially long and difficult recession. Nationally, the core inflation rate was up to 2.2 per cent for the year in May, far more than we typically see in an entire year. In fact, the previous 12 months’ inflation was a low 1.5 per cent. Record fuel prices are the main culprit, but gas isn’t the only expense that is going up these days.
Here’s a short list of increased costs that myself and most other Whistler residents are facing: rising property taxes and fees, rising utility costs (both gas and hydro), a new provincial carbon tax on top of record fuel costs, rising food costs, rising mortgage rates, and higher interest rates on loans and debt.
My strata fees are also significantly higher this year, largely because of the increased cost of snow clearing these past two winters. I know of others that are paying higher rents, partly because of the increased demand prompted by the local construction boom, and partly because homeowners have to charge more to recover their own costs.
Virtually all of the necessities of life are going up with the exception of a few commodities like electronics and clothing that are actually helping to keep inflation down.
For people that are able to save — and personal savings rates are at their lowest point in Canada since savings peaked in 1982, with Canadians now saving less than 1.2 per cent of their earnings compared to 11.2 per cent 26 years ago — the interest rates are also lower. A high interest eSavings account at Royal Bank that paid 3.250 per cent less than a year ago is now paying 2.750 per cent today.
While Whistler’s costs of living are among the highest in the country, and recent increases are adding insults to our injuries, our collective situation is hardly unique. This economic crisis is global, with effects ranging from inflation to starvation being felt almost everywhere.
While most Canadians can weather price hikes for staples like wheat or rice, higher food costs are a disaster for billions of people in developing countries where people are already spending 80 per cent of their income or more on food. It’s being called the Global Food Crisis, and the United Nations is working to get developed countries to more than double their food aid programs this year.
Closer to home, the price of wheat, rice, corn, eggs and other raw foods have already increased by over 20 per cent in January 2008, compared to January of 2007 according to the Financial Post. The Ontario Association of Food Banks is also reporting that the price of the groceries they purchase for their clients has increased four per cent since November 2007.
Again, the price of gasoline — which has increased by over 60 per cent since 2003, and 30 per cent since January — is being blamed for the increases, padding the cost of food production, processing and shipping.
While many of the factors causing these cost of living increases are out of our hands and the result of global events, some increased costs are self-inflicted.
For example, the decision to raise municipal taxes and fees, due July 2 this year, could be considered optional — not in the sense that we could have done nothing, but optional because Council voted to raise taxes and fees instead of cutting costs to make up the projected shortfall. Given the impending Olympics, the real challenges facing tourism, and the amount of development on the books it was probably the right decision, but with all the other increases that families are facing these days there’s no question that it’s very bad timing.
Same goes for the provinces’ decision to impose a carbon tax on July 1 that will add 2.4 cents per litre of gasoline this year, and increase in increments to 7.24 cents a litre by 2012. Those increases are coming at a time when oil and gas prices are reaching new records every month.
Taken together, the costs of living have jumped considerably.
Case Study: Me
Take my situation. I don’t know how typical it is, but I’m married and have a five month old baby at home. I live in a Whistler Housing Authority (WHA) property. I’m currently the only member of the household working while my wife is on maternity leave until the end of the year. We don’t have daycare bills, yet, or any of the other costs that weigh on young families and lead a fairly low key existence.
This year my residential property tax bill increased $179.17 for a WHA property that was appraised at $325,000, after the provincial basic Home Owner Grant was applied.
That includes a 5.5 per cent municipal tax increase, a new $100 composter fee, and an increase of $85 over the previous year for sewer and water.
The extra $180 charge may not seem like much, but keep in mind that the 5.5 per cent rise in municipal taxes was offset by a 3.9 per cent reduction in the provincial tax rate that kept the increase down to 1.5 per cent when all was said and done. Adding four per cent to my tax bill would have pushed my tax burden to more than $200.
Also keep in mind that most homes in Whistler are worth far more than mine — not WHA homes, where I’m probably about average, but market homes where many of Whistler’s longest standing residents live can be worth anywhere from three to six times as much. That doesn’t translate to three to six times higher taxes once mil rates are applied, but it does translate to much higher taxes.
For all of those increases, it’s also worth noting that Whistler’s average property tax rates are still lower than Vancouver compared to the value of homes — the result of having so many second homeowners and other sources of tax revenue to boost municipal finances, and fewer social programs to fund.
It’s also worth noting that the municipal tax revenues needed to increase by 14.5 per cent, primarily to cover rising operational costs and roughly $2 million less in tax revenue that the municipality will collect in July as a result of a change in the way that many of Whistler’s condo hotels are taxed. The municipality froze department budgets this year to keep taxes down, and deferred some projects to keep the increase low this year, but next year will be a different story and future increases above inflation are very likely at this point. One day we will also benefit from a larger share of the hotel tax that could bring in $5 million or more annually to the municipal coffers, but Olympic-related developments have a claim on that money for the next five years.
Property taxes aren’t the only way that homes cost money.
This August my monthly strata fees will increase by $15 a month or $180 a year, while I’m also required to pay an additional one-time payment of $303 to cover the additional costs of snow clearing this past winter — which as a ski bum I don’t mind paying. But that’s another $480 going out the door this year.
Luckily my mortgage is locked in for the next three years at 5.5 per cent, but a look at rates on CanadaMortgage.com turned up five-year rates between 5.65 and 7.15 per cent. Short Term mortgages, six months to a year, start at about 7.1 per cent and top out at 9.24 per cent.
Depending on how much you borrowed and when, your next mortgage rate could be one per cent or more higher than the rate you’re currently paying. Putting that into perspective, every percentage increase means another $1,000 a year in interest on every $100,000 you owe, on top of what you paid before. If you owe $200,000 on a mortgage, that’s another $167 a month in interest.
According to the latest Canadian Housing and Mortgage Corp. figures, the average Canadian family spends about 37 per cent of income on mortgages. The budgeting rule of thumb used to be that you should never spend more than 30 per cent or a third of your income on food to leave enough room in the budget for other costs, but that went out the window years ago. Despite rising interest rates and real estate costs, Canadian mortgage debt is set to top the $1 trillion mark for the first time in 2009.
The worry is that a sudden drop in housing prices or sudden increase in mortgage rates could result in disaster for both the banking industry and homeowners, similar to the subprime mess that’s unraveling in the U.S.
So, to recap the basic cost of home ownership, taxes and strata, increased by $660 this year compared to last year, or by an additional $55 a month.
The increases don’t end there.
Starting on July 1, Terasen Gas will be charging 16 per cent more for propane in Whistler, reflecting global fuel prices. It’s less than the 22 per cent they applied for, and an increase was already on the way to cover the switch from propane to natural gas, but it wasn’t an expense I was expecting until 2009.
My annual gas bills add up to around $480 a year, although we didn’t use as much this past winter and I’ve been working to weather proof my home a bit better. However, if my consumption remains the same a 16 per cent increase is equal to about $77 more a year.
B.C. Hydro also increased its rates, which are still among the lowest in the country, by 6.56 per cent on Apr. 1. A second increase of 8.21 per cent will be phased in on Apr. 1, 2009. B.C. Hydro estimates that it will tack on about $12 per month to the average hydro bill.
By registering at the B.C. Hydro website and looking at my own account history, I’ve figured out that I spent about $150.77 every two months on hydro last year. Based on those numbers the first hydro increase will cost me an additional $9.89 every two months, or just under $60 a year, while the 2009 increase will tack on another $12.37 every two months, or $74.22.
In other words, by this time next April I’ll have spent an additional $60 on hydro. By the same time the following year I’ll have spent an additional $135.
Adding that to the running tally, we’re now up to about $797 a year or $66.41 a month in increases.
If the increases ended there most of us would shrug — $66 is the cost of a lunch and beers for two once a month, a month of digital cable with HDTV, a tank of gas, three to five hours’ work.
But it doesn’t end there, with shelter and warmth. We all have other costs of living, and they’re going up as well.
Next to housing, the second-biggest expense for most Canadians is the cost of owning a car. My wife an I own a very fuel efficient Ford Focus station wagon, which we specifically picked because it was on the top-10 list for fuel economy by the U.S. Environmental Protection Agency and there was room for two bikes in the back.
Gas prices have increased about 62 per cent in Canada since 2003, padding the cost of ownership by about $800 a year for the average family. However, the most significant increases have come in the past six months.
The average price of a barrel of oil almost doubled from July of 2006, when it was $69.97 U.S. to an average of $117.40 U.S. in May 2008.
Pump prices went up 17 per cent in Canada from May 2007 to April 2008, according to the Canadian Taxpayers Federation, and didn’t exactly bottom out in April.
The low gas price this year was $1.06 in January, according to Natural Resources Canada, but last week the price had increased to $1.46 in Whistler.
It’s tough to budget for gas — it all depends on whether we make a lot of trips to the city or visit other parts of the province. In the last three months of 2007 our gas bills averaged $121.12 a months, while the average in the last three months (April, May, June) was $172.74. It’s hard to say how much of that has to do with the $0.40 price increase since January and how much has to do with our driving habits, but by discounting a few fill-ups that were made on special trips I can conservatively estimate that our fuel bill is up around $35 a month or $420 a year. With those special trips it could easily be another $50 a month or $600 a year in added expenses.
While car ownership costs are about 10 times higher than taking transit when you factor in depreciation, the alternative also costs more these days with Whistler and Valley Express rates increasing on June. 1 to recoup higher diesel and operating costs. A single adult fare increased 50 cents to $2, while the 30 day pass went up just $5.
Next to transportation, our next biggest expenses is groceries. Again, it’s hard to say how much is spent because some trips to Costco pick up enough staples for several months while other months we go to the grocery store every other day. In December we spent another $150 on specialty foods for entertaining that we would never buy in a typical month.
Still, considering that I plan to pig out again this Christmas, I estimate that our household grocery bill is now around $510 a month and climbing, up from about $460 a year ago. And while there is a wide selection of data out there to choose from, all indications are that prices are expected to continue to rise.
A recent report by the U.S. Department of Agriculture listed the following increases from May 2007 to May 2008 — eggs are up 28.32 per cent, milk is up 15.37 per cent, beans are up 64.29 per cent, corn is up 46.7 per cent, lentils are up 147.73 per cent, rice is up 50 per cent, soybeans are up 72.75 per cent and wheat is up 80.33 per cent, to name just a few common staples. Keep in mind that the measurements were made at bulk buying rates, either purchased by the bushel or by the hundredweight.
Some of those costs are being absorbed at different levels by distributors and grocery stores, or were offset by the higher Canadian dollar. Some fruits and vegetables are actually cheaper now than they were last year.
That kept food inflation to just 1.9 per cent in May 2008 compared to May 2007, but a bigger increase is expected this year once fuel prices are fully reflected in crop prices. It should also be noted that Canada is an anomaly, with the U.S. reporting food price inflation around four per cent for the same period.
For my family, the estimated increase from $460 a month to $510 a month represents an increased cost of $600 this past year. That’s about nine times higher, percentage wise, than the 1.9 per cent food inflation estimated by Statistics Canada, and almost three times the four per cent increase measured by the Ontario Association of Food Banks.
That could mean one of two things — Whistler prices have increased more than the national average, or that I’m spending more on groceries than before. Since we’ve made a conscious effort to eat out less for lunch and dinner (we budget for $100 a month, and only go slightly over) it’s likely the result of buying more groceries.
For the purposes of this article, where I’m trying to figure out how much my costs have increased, I’ll pretend my costs increased by inflation, which they didn’t, and that costs will remain static this year, which they won’t. By that measure I estimate that my household is going to spend an additional $116.28 this year on food.
The grand total, with housing, utilities, transportation and food:
Property Tax — $180
Strata Fees — $480
Propane — $77
Hydro — $60 (this year, $135 next)
Gas — $420
Food — $116 (actually about $600)
Total: $1,333 a year, or $111 a month With the food increase, it’s more like $1933 a month, or $161 a month.
While that may not seem like a lot, keep in mind that our costs were already high before all of these increases kicked in when you include our mortgage, car insurance, house and life insurance, phone, internet, cable, cell phone, bike upkeep, snow gear, and après ski festivities. That $111 a month comes out of whatever is left after all these things are bought and paid for, which was never very much to begin with.
For me that means no new bike this year, as well as no new computer, no eating out, and no expensive vacation to Hawaii. My wife and I have temporarily stopped investing in her RRSP (I still invest in mind), and in a separate investment fund that was supposed to force us to save. Soon we’ll also start a Registered Education Savings Plan for our daughter, and we’ll have to contribute about $2,000 a year to qualify for the maximum Canada Education Savings Grant of $7,200.
The bad news is that the price increases are not over. Experts are now predicting $200 a barrel of oil this year, and gas prices over $2 a litre — possibly by the end of the year. Most of out food prices are up because of speculation, and don’t reflect the increase in fuel prices. Future property tax increases may be on the way. B.C. Hydro fees are going up again next year, and the price of propane/natural gas will go up with the price of food.
The good news is that people are being forced to change their lifestyles to accommodate the higher prices, and many of those changes are for the better. More people are riding their bikes to work and taking transit. People are moving back into the city from the suburbs, and finding they enjoy life more without the long commute. People are paying more attention to what they eat, and where their food comes from. Some people are quitting smoking to save money, while families are doing away with the second car.
The higher price of means products made of wood and steel could become hot commodities again, which is good for Canada’s resource economy, while the higher cost of shipping items overseas could also be a boon to our long suffering manufacturing industries.
The high price of fuel also makes the alternatives like wind, solar and hydrogen more realistic, and spurring more investment in renewable energy for homes and vehicles. In the southern U.S., the price of solar energy per kilowatt can already match the price of coal.
And there are always to cut from our budget. My parents didn’t get cable until I was in high school, they didn’t have internet connections or cell phones to pay for. My wife and I already give each other the things we need as birthday, Christmas and anniversary gifts, and are becoming experts at finding things to do on the cheap.
The increased cost of propane and hydro has prompted me to make our home even more energy efficient and draft proof. The increased cost of gas means more long walks and bike rides. The increased cost of food nudges us all to look locally for produce, which means buying more from Pemberton, while gradually weaning people off diets that are overly dependent on meat.
Maybe some of us will cut cable, and spend our time reading, doing art projects, or writing the next great Canadian novel. At the very least all of us will come away with a better appreciation of our own finances, become educated consumers, and learn to distinguish between our needs and wants.
A fool and his money…
Home is where the money goes
Whistlerites spend most of
their income on shelter
By Claire Piech
“What we pay for our daily
needs – transportation, food and recreation – are definitely in
line with other resort communities. It is really the housing that is out of
whack with other places.”
-Dan Wilson, Whistler 2020
Meet the Reynolds, a
fictional family of four who will have a hard time paying their accommodation
bills this month.
Together, Ms. and Mr.
Reynolds bring in an annual income of $87,500, which is the median income household
income for Whistler residents receiving two salaries, according to the Resort
Municipality of Whistler (RMOW).
Unfortunately for the
Reynolds, the price to rent their three-bedroom townhouse has gone up
dramatically over the past three years, making it harder to afford the basic
cost of shelter. In 2005, the average price to rent a three bedroom,
unrestricted home in Whistler was $2,329, according to statistics collected by
the Whistler Housing Authority (WHA). In 2008, that number rose by almost 20 per
cent to $2,780.
Using these numbers, the
Reynolds will spend approximately 38 per cent of their income on rental costs
Such a high percentage goes
against the dogma of personal finances, which states that a family should never
spend more than 30 per cent of their income on housing. And while the Reynolds
are a make-believe family created for the purposes of this article, the numbers
describing their situation are real: The average family in Whistler spends a
disproportionate amount of their income on shelter costs.
According to a survey
conducted by Vancouver-based Mustel group earlier this year, approximately 43
per cent of permanent residents in Whistler spend more than 30 per cent of
their income on housing, compared to 22 per cent in 2006. And 48 per cent of
seasonal workers spend more than 30 percent of their income on housing,
compared to 41 per cent in 2006.
“The portion of people that
are spending more than 30 per cent of their gross income on housing has gone up
over the last year,” said Dan Wilson, monitoring coordinator for Whistler 2020,
adding that housing is the average Whistlerite’s greatest expense.
Wilson said the main reason
people spend so much on housing is that there are more people trying to live in
Whistler than there are beds available. This has lead to a shift in the supply
and demand curve.
“Generally housing prices are
set by supply and demand, and how much people are willing to pay for housing,”
“And the demand has probably
been increasing. When you look at, for example, the number of rental listings
in the paper, it has dropped dramatically in the last couple of years.”
classified section confirms Wilson’s observation.
During the last week of June 2006, a total of 20 columns in the classified
section were dedicated to long-term rentals. In 2007, that number dropped to 11
columns. And last week, there were only five columns.
In other words, the number of
places available for rent in Whistler in June has decreased by a whopping 75
per cent over the past two years.
This has translated into
higher rental prices.
Marla Zucht from the WHA said
the average price to rent a studio apartment on Whistler’s unrestricted rental
market has increased by 27 per cent since 2002. Two bedroom homes have
increased by 16 per cent, three bedroom homes by 22 per cent, and single family
houses by 19 per cent.
(Strangely, one-bedroom homes
have actually decreased in price by four per cent since 2002.)
Okay, so with an unpromising
rental market, what is a family like our fictional Reynolds supposed to do?
Should they buy a home?
The affordability situation
does not look that much greener on the homeowner side of the equation. It is
not secret that the price to buy is high in this resort town. According to Pat
Kelly from Whistler Real Estate Company Ltd. (WREC), the medium selling price
of a home in Whistler has rested around $1.25 million for the past five years.
The Reynolds could put their
name down on the WHA’s resident restricted waitlist. With WHA homes tied to the
rate of inflation, this wholly owned subsidiary of the RMOW is the best bet for
long-term locals looking to own a home in Whistler. But even with the WHA’s
promising path to ownership, Kelly adds that there are several other costs a
prospective buyer needs to consider when looking at real estate — namely
their mortgage interest rate, yearly property taxes, heating and lighting
costs, housing insurances prices and the ongoing cost of maintenance.
“Property taxes have gone up
dramatically over the past five year period,” explained Kelly.
“People who are paying for
some of the more expensive properties in town, they are paying between $12,000
to $15,000 in property taxes. For a similar house size in West Vancouver, that
might be $3,000 to $4,000.”
And property taxes went up
again this year. On May 5, council approved a property tax rate increase of 5.5
per cent to mitigate an RMOW budget shortfall. That tax rate means an average
residence, assessed at $750,000, faced an increase of $82 this year. And an
average single-family home, assessed at $1.3 million, was impacted by $128.
Michele Comeau Thompson,
manager of communications for the RMOW, said that according to the municipal
Resident Property Assistance Program, the average property tax (municipal
property taxes plus provincial school taxes) for residents this year in
Whistler was $2,159.
For an average Whistler
family like the Reynolds, approximately 2.5 per cent of their household income
would go towards property taxes if they were to own. (Though Comeau Thompson
warned it is difficult to nail down exact percentages like this since property
taxes are not based on income.)
Utility fees also went up
this year by $161. And with rising costs of heat and maintenance costs, the
general price of owning a home in Whistler is not getting more affordable any
“I think for the local
resident, the cost of housing here is higher than in other communities, but
that is because other communities have more choices,” said Kelly.
“The direction that we’ve
taken to be a sustainable community means that the housing choices for entry
level and lower income groups are not available. And it is a battle that we’ve
been fighting for 25 year. How do you provide housing for someone who is making
$40,000 a year? Right now, the cost of building that housing would be
definitely exceed the affordable for someone making $40,000.”
Kelly added that in a city
like Vancouver, most people who earn a $30,000-per-year salary commute from
places like Richmond or Langley were land is cheaper. Alternatively, Whistler
has a mandate to house 75 per cent of its employees in municipal borders.
The silver lining to the
whole housing issue is that groups like the WHA, the Whistler 2020 community
tasks forces, and the Whistler Chamber of Commerce are working hard to find
innovative ways to provide cheaper housing to the workers of Whistler.
Hopefully their creativity can come up with more affordable shelter solutions
quick. The Reynolds, and many other locals, may very well be counting on it to
continue living in Whistler.
Getting around — the price of mobility
Gas prices have an impact on
commuters and transit
By Jesse Ferreras
is heading for a perfect storm when it comes to the cost of commuting, and the
Sea to Sky Corridor is no exception.
are two factors at play. One is the rising cost of gas, which according to
gasbuddy.com is a significant rise over the trends seen in 2006 and 2007 when
people were already complaining about fuel rates.
other is a controversial carbon tax that took effect in British Columbia
starting July 1. Introduced in February’s provincial budget, the tax is meant
to encourage people to make more “environmentally responsible” choices by
reducing their dependence on fossil fuels and the resulting emissions.
took a look at different-sized cars to see what kind
of an impact the rising gas prices will have on people’s finances.
door number one, take a 2004 Ford Focus SE Wagon. A popular four-door family
station wagon, it has plenty of room to store the bikes, or skis or snowboards,
depending on the time of year, and it was among the top-rated cars for fuel
efficiency when it was released. It’s a perfect vehicle for the active Whistler
family that needs to get around.
consider something else. The lowest price that gas hit in 2008 was $1.036 per
litre – and that was on Jan. 22, according to Natural Resources Canada.
tank for a Ford Focus SE Wagon is 13.2 gallons, or almost 40 litres. To fill
the thing all the way up on the cheapest day of the year would have been about
$51.50. Depending on how much you drive, that can add up to over $150 in a
month if you have to fill it up three times. And that’s just the cheapest rate
forward to June 27, 2008. Gas prices are reaching some of their highest levels
in years, according to gasbuddy.com. The price of gas at a Petro-Canada station
in Squamish was $1.429 per litre. Taking this into account, the price of a full
tank of gas on the Focus jumps to more than $70. If you fill it up three times
this month and the price stays steady, you’re at upwards of $200 a month.
this is only for a small car. Lots of people in Whistler need bigger vehicles
to lug around their skiing equipment and various other things, whether it’s
construction tools, a snowmobile, or luggage for a weekend trip. A Ford Focus
cannot nearly haul the gear that a sport utility vehicle could.
door number two, take a Cadillac Escalade. It’s among the bigger SUV models,
but nevertheless makes a good case study for the exorbitant strains on finances
that gas prices can create.
put it simply, the fuel tank of an Escalade is almost double the size of a Ford
Focus – 26 gallons, according to the Cadillac website. At current gas
prices, you could be paying up to $140 to fill that tank just one time.
Multiply that by the number of times you’ll need to fill it in a month and…
well, you do the math.
these prices were rendered moot as of Tuesday, July 1.
B.C. carbon tax has applied a levy of $10 per tonne of associated carbon
emissions, a rate that will rise by $5 each year for five years before hitting
$30 per tonne by 2012. The provincial government estimates that the tax will
apply 2.41 cents to each litre of gasoline now, reaching 7.24 cents per litre
the tax were applied this week, it would bring the gas price to more than $1.43
per litre. If the base fuel price were the same four years from now, it would
be about $1.56 per litre, according to the government’s own estimates. On a
26-gallon (98 litre) tank, that’s an additional $12.75 per fill-up.
critics of the carbon tax suggest that the tax is ill-advised, given the huge
impact already being felt in rural areas of the province. They argue that the
skyrocketing cost of gas is already encouraging people to use less gas, and that
the carbon tax is unnecessary given the fact that it is revenue neutral and
will be offset by other tax cuts instead of being used to build a renewable
course driving isn’t the only option. There’s always the Whistler and Valley
Express Transit System, a service funded jointly by the Resort Municipality of
Whistler and BC Transit.
a $50 monthly pass, use it exclusively for all your transport needs, and you
could shave a good $150 off your monthly gas expenses. You can also claim it on
your tax return, provided you keep the pass itself and the receipt.
course, relying solely on public transit requires you to weigh some important
factors, namely cost against convenience. And the WAVE system can certainly
leave something to be desired for commuters living far outside the Whistler
Squamish residents for example. Those who work in Whistler only have four times
a day each way to get to and from work in Whistler on public transit. In the
morning you need to catch the Squamish commuter at either 6:15 a.m. or 6:35
a.m. if you’re leaving from the Squamish Chieftain centre. It’s also $5 per
home at the end of the day leaves you with two options on the transit commuter:
4:40 p.m. or 5:10 p.m. from the Gondola Transit Exchange. Bad idea, it would
seem, to stay late for overtime unless you’re willing to take a Greyhound, an
option that’s almost $10 each way.
Transit did not return a call for commentary on whether its fares would be
increasing with the carbon tax. A spokesman for the B.C. Ministry of Finance
said that all businesses and organizations using fossil fuels would be subject
to it, and that includes B.C. Transit.
matter what your choice of motorized travel, the price to do it is certainly
federal Conservatives are trying to make it look like things will be even more
expensive, gas-wise, if the Liberals are elected into government. For British
Columbians, that’s nothing to worry about — the Liberal “Green Shift”
plan has already said it will not put a tax on fuel at the pump.
that doesn’t alleviate the financial concerns of travel for people in this
province. British Columbia has already had its green shift, and just this week
we’re starting to feel it.
Finding your financial balance
By Holly Fraughton
It’s all about the lifestyle, right? At least in a community
like Whistler, where some of the world’s finest skiing, snowboarding, biking
and more is right at our fingertips, recreation is kind of a big deal.
According to the Whistler 2020 task force on Residential
Affordability, recreation is actually the second highest expense in this town,
topped only by housing, and followed by food.
Wait, we spend more on recreation than FOOD? Wow. I guess
it’s possible that those numbers are slightly skewed by some of the more
expensive sports, like snowmobiling and downhill mountain biking, but I know
from firsthand experience — as someone who moved to this community just
one year ago — that almost every seasonal sport has a hefty price-tag
associated with it. While our ski and recreation centre passes are slightly
less expensive than in Banff or Vancouver thanks to things like the Whistler
Blackcomb Spirit Pass, and activities are affordable in large part thanks to
volunteer-run groups, Whistler’s 2006 Affordability Study shows that equipment
costs are slightly higher. It’s pretty easy to drop a cool $1,500 to get kitted
out in a new snowboard set-up, or on a shiny new cross country mountain bike
(not to mention the downhill monstrosities that actually cost more than my
car). Of course, there are ways to get around paying top dollar for your goods,
like buying your equipment at the end of the season, not the beginning, or
checking out online deals. But all in all, the smartest way to go about buying
your gear is pretty old-fashioned: save for it.
Julie Jaggernath is the director of education for the Credit
Counseling Society, a non-profit organization that covers Western Canada. They
see people from all walks of life in different states of financial disrepair
and try to help them get out of debt and manage their money more effectively.
“Paycheques don’t come with instructions,” Jaggernath points
Young people in particular tend to have a sense of
entitlement and lack of foresight when it comes to managing their money. They
usually expect to have the same standard of living as they grew up with, and
often resort to using credit or financing to get it.
“Credit is so easy to get, and young people now, sort of
into their 30s, they’ve seen historically low interest rates. They’ve never
lived with rates at 15 per cent, and credit rates at 20 per cent.”
And contrary to popular belief, your banker is not your
“They have sales mandates – they’re in the business to
make money,” Jaggernath explains.
So it’s up to you to educate yourself on finances and
control your money.
Budgets are an “absolutely crucial” part of your overall
financial health, said Jaggernath.
Last year, the Credit Counseling Society advised over 17,000
Western Canadians through workshops, face-to-face discussions, and telephone
appointments. But “very few” of these people had budgets.
“A lot of people will jot their spending down, or keep
receipts, but that’s evidence of good shopping,” Jaggernath said with a laugh,
If you don’t have a clue about how to properly budget (and
don’t feel bad, apparently you’re in the majority), visit
to find out where to
get started. Basically, Jaggernath says you should start out by figuring out
how much money you have coming in, and where it all goes.
With the costs of the necessities — food, shelter, and
transportation — increasing across the board, the first casualty of any
budget is, logically, your “extras,” like eating out, impulse buys, gym
memberships, and other optional expenses.
“For instance, in your community, you have really high
housing costs. We have housing costs in the Lower Mainland, but you guys have
crazy housing costs, and we’re seeing budgets coming through where 70 per cent
of people’s gross income is going towards housing costs,” she says, “In your
community, that could be even higher, and when the bank qualifies you only on
40 per cent where the heck does daycare and fun fit in?”
But Jaggernath says there are ways to manage your finances,
even with increasing cost of the basics, so that you don’t have to totally
eliminate the “extras” in your life.
She encourages people to get creative to help cut down on
expenses; do things like organize a carpool to buy groceries down in Squamish
once a month. And take a hard look at your expenses to figure out if they fall
under the “need” or the “want” category. If you aren’t really sure, Jaggernath
recommends cutting it out for a month as a true test of necessity.
For big annual expenses like an adult ski pass, which,
according to the 2006 Whistler Affordability Study will run you about $1,639,
she recommends setting a bit of money aside from each paycheque, rather than
putting it on a credit card.
Which brings me to the big financial no-no’s: credit cards,
payday loans, and extending overdrafts.
“People don’t realize if they don’t pay their credit card
off every month in full, they don’t have an interest-free grace period, and
$5,000 on a credit card will take you 28 years to pay off (making the minimum
payment),” Jaggernath points out, adding that payday loan places prey on people
– they charge up to 59.99 per cent interest, while the maximum legal
amount is 60 per cent.
“And that’s where the budget becomes even more important, so
you’re not short $500 on the rent and then need to utilize an expensive way of
That old “out of sight, out of mind adage” can come in handy
when it comes to saving money. An automatic split payroll deposit through your
employer can be a less painful way of setting aside cash, and if you put your
savings account under an “other” account, you won’t be tempted to access it
through debit when you spy that perfect – but entirely unnecessary
– pair of shoes.
The high cost of doing business
By Paul Carlucci
The phrase “end of an era” has become common parlance, what with rising food costs, labour shortages and oil prices breaking records so often it hardly constitutes news. All of us are facing an economic paradigm shift, and, when it comes to affordability, the business community is absorbing this shift at least the same rate as any other corner of society.
“We’ve tried to create a better place to work,” says Joey
Gibbons, who, under the umbrella of the Gibbons Hospitality Group operates
three businesses in Whistler. “We’ve introduced this past year, for all of our
staff that don’t make all the tips — for instance people in our kitchens
or people just starting out — what we’ve done to is offer them free meals,
whether their working or not, a healthy meal. We offer a family dinner every
week. We offer financing with their ski passes. We’re signing up for the
Phoenix housing project. We signed up substantially for that. We feel people
come to Whistler for an experience, and as long as they have a place to hang
their hat and eat, then we can give them that experience.”
In a booming economy with competitive job options, wages
factor in significantly to a business’ operating costs. Take the situation with
Behind the Grind Café, where owner Chris Quinlan has seen his labour costs jump
25 per cent since last year.
“You need a higher quality person, and you have to get more productivity out of them,” he says. “Last year, we looked at our menu, and we made some adjustments in our pricing, and the prices are more in line with food costs. And we have to pay our people enough so they can afford to live here. The hourly rates are part of it, but we also provide ski passes and we have apartments in the Phoenix project. At the end of the day, it’s a good hit.”
Kennedy Raine, who owns the Great Glass Elevator Candy Shop, has seen her labour costs jump 10 to 15 per cent. Like Gibbons, she tries to supplement wages with ski passes. If she has an employee uninterested in skiing, she offers a “wellness benefit,” which might take the form of a gym membership.
Property taxes are another aggravating factor. With the implementation of Whistler’s most recent budget, business owners can expect to pay just over $7 for every $1,000 of assessed value.
“I guess the biggest thing that’s out of my control is rent, and that is related to property taxes because they’re included in the rent,” says Raine. “Absolutely, if property taxes go up, then my monthly rent goes up. If the landlord raises their rent to a prohibitive level, that would be a thing to make me close the doors.”
The municipality has said that business taxes here are lower than other B.C. communities. Maybe so, wrote Chamber of Commerce President Louise Lundy in an email to Pique Newsmagazine , but Whistler’s municipal spending is atypically high, and that might prove unsustainable for the community in the long run.
“For the first time,” she wrote, “the Whistler Chamber will work closely on (a Resort Municipality of Whistler) budget committee to ensure input from the business community to the budgeting process in future – a huge step forward. The goal is not to divert tax payments from the business community to the residents, but to control the overall need for higher tax revenues.”
According to Lundy, the Chamber’s role is “to provide support, resources and tools to the business community.”
Ask Quinlan, who sits on the Chamber’s board of directors, and he’ll tell you the institution is invaluable when it comes to help in navigating the new economy.
“They provide some awesome training for business owners, everything from book keeping to dealing with your employees,” says Quinlan. “The chamber spearheaded the Phoenix project, and if that wasn’t happening there’s three hundred beds that would not be available. Without those beds we wouldn’t be able to provide the service expected of us throughout the Olympics.”
The specifics of business taxes this year are unique to every business, but council fixed the commercial rate at no more than 3.6 times the residential rates. Previously the rate was 3.38 times the residential rate, which in 2006 was ranked 112 th out of 161 communities.