Property Tax and Transit

Everywhere in BC, the provincial government pays for about half of the total cost to operate transit systems, expect in Metro Vancouver.

TransLink was created at the turn-of-the-century as the province was interesting in getting out of directly funding transit service in Metro Vancouver while the region was interested in get direct control of transit delivery. The original version of TransLink was setup to give the region both responsibility for the operation and funding of transit service. One of the details that needed to be worked out was a new funding arrangement.

In the rest of BC, property owners pay a hospital tax. As part of the new deal for transit in Metro Vancouver, the province agreed to eat the cost of the hospital tax in exchange for getting out of directly funding transit in the region. The region’s municipalities could then use this tax headroom to increase the amount of property tax to fund transit. The province would still contribute to transit projects, but it would be out of the business of paying for the day-to-day operations of transit in Metro Vancouver.

On the surface, it seemed like a win-win. The region would have more control of transit while the province would be able to reduce the amount of money it spent on transit in the region.

Skip forward to today; due to various changes in the TransLink governance model, the province basically controls transit in Metro Vancouver again, but the region pays for all the operating costs. More money is needed to pay for much needed transit expansion, but the province wants the region to pay for transit service expansion with property tax. The region's mayors say that this is unfair.

The province claims that there is still headroom in property tax from the eliminated hospital tax to pay for transit. Is this truly the case?

Coquitlam and Abbotsford are about the same size. In 2013, they both collected $188 million in property tax for local government services (this does not include school, regional district, transit, or hospital property tax.)

In 2013, Abbotsford property owners paid $5.3 million in hospital tax and $3.1 million out of local property tax for transit. This is a grand total of $8.4 million dollars.

Coquitlam property owners paid $12.9 million to TransLink in 2013. Comparing Abbotsford and Coquitlam, it would appear that there is no more headroom to pay for transit. In fact, the headroom was exceeded by $4.5 million.

Transit service frequent and reach is lower in Abbotsford than in Metro Vancouver. Comparing transit service in Metro Vancouver and Greater Victoria is more useful.

Transit in the Capital Regional District is managed by the Victoria Regional Transportation Commission. Transit governance in Victoria is different than the rest of the province. Transit in the Capital Regional District is funded by fares, property tax, and a regional gas tax, with the provincial government contributing about a third of the revenue. Property owners in the Capital Region still pay the hospital property tax.

The Township of Langley and Saanich are about the same size. In 2013, Saanich property owners paid $7.9 million in hospital tax and $7.4 million in transit property tax. This is a grand total of $15.3 million.

Township of Langley property owners paid about $12.5 million to TransLink in 2013. In comparing Saanich and the Township of Langley, there is about $2.8 million in headroom to pay for more transit.

Langford property owners contributed a combined total of $4.7 million for hospitals and transit while property owners in Port Moody contributed $3.1 million to transit in property tax in 2013.

It would appear that the province is correct that there is still some headroom to increase property tax to pay for transit in Metro Vancouver, though not enough to pay for all the transit service improvements needed.

Right now the mayors in Metro Vancouver have drawn a line in the sand, refusing to increase property tax beyond the rate of inflation to pay for needed transit improvement.

While another source of funding for transit will be required in Metro Vancouver, the region's mayors will likely need to agree to increase the property tax rate for TransLink. The province has basically said that it won’t give the region another funding source until property tax is increased to pay for transit, and it appears that there is still some headroom to increase the property tax to pay for transit in our region.