Municipal spending in Metro Vancouver balloons despite government calls for more revenue

VANCOUVER—With municipal elections coming this fall, a new study from the Fraser Institute, an independent, non-partisan Canadian public policy think-tank, finds that municipal spending in Metro Vancouver ballooned over the last decade, despite cries of poverty from government officials.

The study, The State of Municipal Finances in Metro Vancouver, spotlights the overall financial state of Metro Vancouver’s 21 municipalities, home to 2.4 million people.

“In city halls from Vancouver to Coquitlam, government officials often claim to be revenue-starved, but in reality, overall municipal revenues are growing quite rapidly. The real problem at the municipal level is poor control of spending,” said Charles Lammam, study co-author and resident scholar in economic policy at the Fraser Institute.

For example, from 2002 to 2012 (the latest year of available data), total municipal spending in Metro Vancouver increased from $1.9 billion to $3.3 billion—a 74.2 per cent increase. During that same 10-year period, total municipal revenue grew from $2.5 billion to $4.6 billion—an 86.2 per cent growth rate that exceeds the 74.2 per cent spending rate.

“If Metro Vancouver municipalities feel like they’re experiencing a fiscal squeeze, it’s certainly not from a lack of revenue. Since 2002, municipal governments in Metro Vancouver have been on a spending spree,” Lammam said.

So how bad is the spending problem?

Total municipal spending in Metro Vancouver has outpaced several reasonable benchmarks. For starters, it’s grown much faster than both the B.C. and federal government’s spending over a comparable period.

Per person municipal spending in Metro Vancouver also outpaced the combined rate of population growth and inflation (the increase in overall prices). Specifically, per person municipal spending grew from $1,088 in 2002 to $1,384 in 2012 (all in 2012 dollars). This represents 27.1 per cent growth in spending over and above population growth and inflation combined.

The study also breaks down spending increases by categories of spending.

For example, on a per-person basis, the three largest spending increases were: solid waste and utilities (42.6 per cent), parks, recreation, and culture (38.6 per cent), and general government administration and services (35.3 per cent).

“Because large increases in municipal spending may not translate into more or higher quality services across Metro Vancouver, it’s perfectly reasonable for residents to question the value of government spending increases,” Lammam said.

Media Contacts:

Charles Lammam