Wednesday, August 7, 2019

Local governments responsible for majority of infrastructure in BC, yet receive least revenue

Recently, the provincial government released its 2018-19 public accounts. This document is the annual financial report for the provincial government. The provincial government also collects financial information for regional districts and municipalities in our province. It has recently made this draft information available online for 2018.

The following pie chart shows the amount of revenue that the provincial government collected in 2018-19, and the total collected by regional districts and municipalities in our province in 2018.

This revenue also includes grants and transfers between governments. For example, the provincial government receives funding from the federal government, and local governments receive funding from both the federal and provincial governments.

As you can see, the provincial government receives the lion’s share of revenue in BC. This is not surprising.

While the provincial government provides important services to people such as health care, education, and social assistance, it is local governments (municipalities and regional districts) that operate services that require significant infrastructure such as water, sewer, roads, and parks.

The following chart shows that local governments are responsible for the majority of physical infrastructure in our province.

So why does this matter? There was a large investment in infrastructure that occurred in the mid-twentieth century. Most of this infrastructure is now coming due for replacement in the next decade or so. Given the limited amount of revenue that local governments collect, and the amount of infrastructure that needs to be renewed, we need to start talking about a New Deal for local governments in our province.

Either the federal and provincial governments have to increase their commitments to transfers and grants for local governments to fund infrastructure renewal, or the provincial government will need to enable new funding options such as expanding local government’s ability to collect developer charges, or new revenue steams such as a half-penny sales tax for local government.

I did not include the federal government in these charts as I do not have a breakdown of revenue collected from British Columbia by the feds, nor infrastructure directly owned by the feds in BC. I can say that the federal government owns less infrastructure in BC than the provincial government.

As a note, local government infrastructure value also includes land. These charts are interactive.

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