Can Surrey use provincial funding to lower a property tax hike?

Will the City of Surrey be able to use provincial infrastructure funding to lower its property tax hike?

Surrey City Hall of the City of Surrey. (Moriyama & Teshima Architects)

The City of Surrey is the largest recipient of the Government of British Columbia’s new, one-time Growing Communities Fund.

Of the total $1 billion being allocated to all 188 municipal governments and regional districts across the province, Surrey’s municipal government will receive $90 million, which is based on both its historical population growth and real population.

Earlier this week in a Surrey City Council meeting, Mayor Brenda Locke announced a proposal to potentially use the new provincial funding to offset at least a portion of the average 17.5% property tax hike that residents and businesses face in 2023.

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It was stated that the funding would target the police-related shortfall portion of the property tax, which would reduce it from 9.5% to 4.5% to send the total 2023 municipal property tax increase to 12.5%. During the meeting, City Council also directed City staff to revamp the budget to limit the increase to no more than 12.5%.

But when the provincial government announced the grant program on February 23, and then the allocated amounts to each local government on March 3, it was made clear that the funds are intended to help support the costs of growing pains in communities, such as the need to improve community and recreational centres, parks, roads, utilities, and other facilities and infrastructure.

As the $1 billion grant is being funded by the provincial government’s unexpected multi-billion dollar budget surplus for the 2022/2023 fiscal year, it must allocate the funds quickly — before the end of the fiscal year, which comes to a close at the end of this month.

For this reason, the grant is not project-based, requiring time-consuming provincial review and approval, but rather it gives local governments the freedom to spend it as they see fit — but within limits, based on the province’s provided guidelines for the funds.

“The Ministry is in the process of reaching out to all 188 local governments regarding the terms and conditions of the fund. Local governments will be able to make local decisions on how they use the funds within the categories set out by the grant criteria and will be required to report on their spending. The Ministry can also provide ongoing advice to local governments on their use of this fund,” reads a statement by the BC Ministry of Municipal Affairs to Daily Hive Urbanized.

It was also noted that all local governments will be given the same terms and conditions on how to use their grant funding — there will be no special exceptions on a case-to-case basis.

When asked whether the terms and conditions specify the funding should only be used on capital projects (new and improved facilities and infrastructure) as opposed to operating costs (such as policing-related operating costs), the Ministry was unable to directly specify but reiterated the intent of the grant.

“Local governments are required to report on their spending on an annual basis. Local governments are accountable to the people within their communities and the intention of the grant is to support infrastructure and amenity projects that will help communities deal with increased demands due to population growth,” reads the statement.

Daily Hive Urbanized also asked for further clarification from the City of Surrey on the use of its funds. The City’s provided statement made no mention of policing-related offsets, and instead, they only said “the entire $90 million will be utilized for the City’s Capital Program, for example, Cloverdale Ice Rink, Bear Creek Improvements, and other capital projects.”

The City’s proposed 2023 operating budget as it stands depends on winding down Surrey Police Services and keeping the Surrey RCMP. But this still requires final approval from the provincial government, which could decide over the coming weeks on whether the municipal government’s about-turn can proceed — based on whether Surrey’s policing needs are adequately met and do not have province-wide implications.

City staff will present a revised 2023 operating budget to City Council for consideration on April 3.

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