Operating expenses of B.C. cities far outpaces population growth and inflation: report | Daily Hive

Operating expenses of B.C. municipal governments far outpaces population growth and inflation: report

Vancouver City Hall. (JHVEPhoto/Shutterstock)

Municipal operating spending across British Columbia nearly doubled over a 14-year period, growing substantially faster than both population and inflation, according to a new report from the Business Council of British Columbia (BCBC).

The business organization estimates that B.C. municipal governments accumulated about $6.5 billion in spending beyond a benchmark tied to population growth and inflation between 2010 and 2024. That amounts to approximately $1,280 for every resident covered by the analysis.

Across the 153 municipal governments examined, total operating spending rose from approximately $6.3 billion in 2010 to $12.3 billion in 2024 — an increase of 94 per cent. Over the same period, their combined population grew by 28 per cent and inflation reached approximately 36 per cent.

Had spending increased only to reflect the larger population and higher cost of delivering the same services, the report calculates that it would have grown by about 75 per cent — approximately 19 per cent less than the actual increase.

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“It’s reasonable to ask whether local governments are delivering those services as efficiently as they could”

The report uses the term “excess spending” for the difference between the actual operating expenses and that population/inflation benchmark. The calculation does not, by itself, determine whether the additional spending was wasteful or unnecessary, as municipal governments could have expanded services, improved service quality, or faced specific local costs beyond general inflation.

However, BCBC argues that taxpayers should receive clearer evidence that those additional expenses resulted in better services.

“Population growth and inflation naturally increase the cost of delivering municipal services,” said Jairo Yunis, BCBC’s director of policy and a co-author of the report.

“The concern is that, in most municipalities, spending has consistently grown well beyond those pressures. Unless residents are receiving significantly better services, it’s reasonable to ask whether local governments are delivering those services as efficiently as they could.”

The study found that inflation-adjusted operating spending grew faster than population in 135 of the 153 municipal governments examined, representing 88 per cent of the total. In 84 municipal governments, the annual gap between real spending growth and population growth was at least one per cent.

BCBC notes that the pace of spending above its benchmark has also accelerated during each municipal election cycle.

Average annual “excess spending” grew from approximately $128 million — or $31 per resident — during the 2011 to 2014 cycle to $432 million during the 2014 to 2018 period. It then reached $560 million annually from 2018 to 2022 and $800 million — or $163 per resident — during the first two years of the current 2022 to 2026 term.

Business Council of British Columbia

Public safety services — including policing, fire departments, and bylaw enforcement — accounted for the largest dollar amount above the benchmark, at approximately $2.7 billion between 2010 and 2024.

Parks, recreation, and culture followed at about $1.2 billion, while development services accounted for $830 million. Transportation and public transit accounted for $710 million, sewer services $704 million, and health, social services, and housing $423 million.

Those figures reflect the size of each spending category, rather than only its percentage growth. On a per-person basis and after adjusting for inflation, spending on health, social services, and housing recorded the fastest increase, rising by 74 per cent. Development services grew by 39 per cent, sewer services by 19 per cent, public safety services by 18 per cent, and general government by 15 per cent.

BCBC noted that health, housing, and social programs generally fall under the jurisdiction of the provincial government. It said the municipal spending increases in these areas could indicate that responsibilities have been informally downloaded by the provincial government — that local governments have voluntarily widened their role or that services are being duplicated by different levels of government.

A previous City of Vancouver staff report also shows that earlier this decade, the largest municipal government in B.C. has absorbed a considerable degree of costs that are typically the responsibility of the provincial and federal governments. Much of these extra costs relate to Vancouver — particularly the Downtown Eastside — being the epicentre of Canada’s homelessness, mental health, and addictions crisis.

More recently, the City of Surrey launched a new initiative that creates municipally-supported community medical clinics to supplement provincially-operated healthcare services, driven by how provincial healthcare services have not kept up with Surrey’s rapid population growth. The first two locations are expected to open in Fall 2026.

“Property tax increases that continue to outpace inflation and nearly every other province in Canada”

BCBC’s report connects the growth in municipal operating expenditures with rapidly increasing property tax bills. It found that property taxes and other special charges on owner-occupied housing in B.C. increased by 110 per cent between January 2010 and May 2026, compared with 62 per cent nationally and overall B.C. inflation of 46 per cent.

During the current municipal term to date, the increase reached 37 per cent in B.C., compared with 22 per cent nationally, 21 per cent in Ontario, 20 per cent in Alberta, and 14 per cent in Quebec.

“Last year we warned that municipal spending was beginning to resemble a runaway train, ” said David Williams, the vice president of economics for BCBC.

“This year’s report shows the train hasn’t slowed down. Instead, it’s speeding up, and British Columbians are paying the price through property tax increases that continue to outpace inflation and nearly every other province in Canada. ”

Business Council of British Columbia

Individual Metro Vancouver municipal governments showed varying results.

Between 2010 and 2024, the City of Vancouver’s inflation-adjusted operating spending grew by an annual average of 2.2 per cent, compared with population growth of 1.4 per cent. The City of Surrey recorded annual real spending growth of four per cent and population growth of 2.8 per cent, while the City of Burnaby saw annual real spending growth of 3.2 per cent and population growth of 1.9 per cent.

The City of Richmond recorded real spending growth of 2.4 per cent annually, compared with population growth of 1.6 per cent. The City of Coquitlam’s figures were 2.9 per cent and 2.2 per cent, respectively.

The report separately analyzed Metro Vancouver Regional District, which effectively serves as the regional government and provides major regional services — such as bulk drinking water, sewage treatment, and garbage disposal — for the jurisdictions of 21 municipal governments in the Metro Vancouver region.

Its annual operating spending increased from approximately $455 million in 2010 to nearly $896 million in 2024, representing a 97 per cent increase. Metro Vancouver’s regional population increased by 31 per cent over the same period, while inflation reached 36 per cent.

BCBC calculated approximately $172 million in cumulative regional district spending above its benchmark. However, almost all of that total was recorded during the final three years: $32 million in 2022, $61 million in 2023, and $81 million in 2024. Sewer services were the regional district’s largest contributor to spending above the benchmark at $222 million.

Those increases were partly offset by water utilities spending that was $386 million below the benchmark, and garbage and recycling spending that was $123 million below it.

Business Council of British Columbia

According to the regional district, regional district services (such as regional parks, air quality management, and regional planning) cost Metro Vancouver households about $81 per year, while utilities account for the other 90 per cent of what residents pay for all services offered by the regional district. This year, households across the region will pay an average of $897 annually for all services and utilities provided by the regional district.

BCBC recommends that municipalities generally limit operating budget growth to inflation and population increases, unless elected officials can publicly link higher spending to measurable improvements or specific local pressures.

It also calls on the provincial government to expand the mandate of the B.C. Auditor General to cover municipal governments and regional districts, or revive the former Auditor General for Local Government. In 2021, the City of Vancouver created its own independent municipal Auditor General.

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