2021 R07 – Provincial Tax Sharing and Local Fuel Tax
- Year: 2021
- AVICC Number: R07
- UBCM Number: EB20
- Courtenay
Whereas costs, regulations, and responsibilities for local governments are increasing at an unsustainable rate;
And whereas some traditionally provincial or federal funded responsibilities have shifted to local government:
Therefore be it resolved that UBCM ask the Province to work with local governments towards sharing:
• Sales Tax
• Liquor Tax
• Property Transfer Tax
And be it further resolved that the Province support and simplify the creation of local fuel taxes for local governments as an additional revenue stream.
- Year: 2021
- AVICC Number: R07
- Sponsor: Courtenay
- Resolution Type: Provincial
- Category: Taxation
- AVICC Decision: Endorsed
- AVICC Action: Forwarded to UBCM
- AVICC Response link
- UBCM Number: EB20
- UBCM Decision: Endorsed
- Provincial Response:Ministry of Finance The financial viability of local governments is of great importance to the Provincial Government. To achieve this, the Province provides local governments with broad revenue tools, including property value tax, parcel tax, user-fees, Development Cost Charges, agreements, and others. Additionally, through the pooled and Triple-A borrowing authority of the Municipal Finance Authority of British Columbia, municipalities have access to inexpensive long-term borrowing. These financial tools are further complemented by over 100 million annually in unconditional grant funding to local governments across British Columbia. Provincial sales tax which includes liquor and property transfer tax are paid into the consolidated revenue fund. Putting 100 per cent of these revenues directly into the consolidated revenue fund ensures that the government is best positioned to respond to constantly changing needs across BC, whether those have to do with the current COVID-19 crisis, wildfires or flooding, overdoses, housing, local infrastructure, and services, increasing pressures on the healthcare and education systems, climate change, or other priorities. In terms of the creation of local government fuel taxes, from a design perspective, uniformity and consistency in the tax system is valued by the citizens and businesses that pay and, in some cases, collect taxes. BCs fuel tax system applies uniformly across the province but, at present, also authorizes higher tax rates in two areas of the province that operate large transit systems: in the Metro Vancouver area, a dedicated tax raises revenue for TransLink and in Greater Victoria, a dedicated tax raises revenue for the local BC Transit system. The higher rates in these two regions support their large transit systems, but creating further inconsistency in fuel tax rates is not desirable. As well, the stringency of climate policies aimed at reducing fuel usage will increase over time, resulting in a what is expected to be a decline in fuel tax revenues. Therefore, fuel taxes may not provide a reliable source of revenue for local governments. Finally, at the 2021 UBCM Convention, the Premier committed the Province to an MOU with UBCM that would facilitate an open, honest conversations with local governments about their finance system, and how we can work together to better serve British Columbians. In support of that commitment, Municipal Affairs Minister Josie Osborne, Finance Minister Selina Robinson, and UBCM president Laurey-Anne Roodenburg signed a memorandum of understanding MOU on Local Government Financial Resiliency on January 26, 2022. This MOU will guide the Province and UBCM in a review of the local government finance system. This will include discussions about cost pressures local governments may be experiencing around attainable housing, community safety and climate change, and the impact of the new economy. These issues were identified in a UBCM membership-endorsed report titled Ensuring Local Governments Resiliency - Todays Recovery and Tomorrows New Economy that was published in August 2021. The report included 20 recommendations that focused on strengthening the municipal and regional district finance system.
- UBCM Response link
The AVICC acknowledges that we are grateful to live, work, and play on the traditional territories of theCoast Salish, Nuu-Chah-Nulth and Kwak-Waka’wakw Peoples