Opinion: The growth of the City of Vancouver's bureaucracy is out of control

Feb 24 2022, 12:23 am

This is a three-part Daily Hive Urbanized series on the State of Vancouver’s municipal political landscape ahead of the October 2022 civic election.

Part 1 provides an overview of the potential outcome of the upcoming civic election, based on the current makeup of major parties and candidates. Part 2 (this article) compares the scope, mandate, and workforce size of the City of Vancouver and its bureaucracy with other major Canadian cities, while Part 3 highlights the need for the City of Vancouver to achieve a better balance with its core basic responsibilities of a municipal government.

Vancouver City Council’s member motions are not the only driver for the City of Vancouver’s bureaucracy’s staggering growth in size and costs.

The growth of the municipal government’s bureaucracy at a rate beyond population and economic growth began long before this current city council.

Daily Hive Urbanized has compiled annual financial statements by the City of Vancouver to show the growth in the size and remuneration of municipal employees over the past decade:

  • Staff paid over $75,000:
    • 2011: about 1,770 people
    • 2015: about 2,360 people
    • 2019: about 2,990 people
    • 2020: about 3,010 people
  • Staff paid over $100,000:
    • 2011: about 450 people
    • 2015: about 1,320 people
    • 2019: about 1,480 people
    • 2020: about 1,440 people
  • Annual total employee remuneration:
    • 2011: $399 million
    • 2015: $473 million
    • 2019: $550 million
    • 2020: $531 million
  • Annual total employee remuneration over $75,000:
    • 2011: $166 million
    • 2015: $257 million
    • 2019: $314 million
    • 2020: $309 million
  • Annual total employee remuneration under $75,000:
    • 2011: $233 million
    • 2015: $216 million
    • 2019: $236 million
    • 2020: $222 million

Over the span of a decade, the number of city employees paid over $75,000 increased by over 1,200 people. The number of city employees making over $100,000 more than tripled to 1,440 people during the same period. A slice of the remuneration increases can be attributed to inflation, established pay scales and union contracts, public sector overtime, and, ironically, the need to be a competitive employer to retain employees due to — at least partially — self-inflicted housing affordability issues.

But office-based desk jobs have particularly grown; the frequency and length of city staff reports and planning exercises over the past decade have grown from adding more factors, variables, layers, and lenses for comprehensive analysis, consideration, and consultation. This mantra has been extended across the entire city enterprise.

Much of this growth is also the result of the municipal government taking on the exponentially expanded function of a think tank, specifically advocacy and research on social and climate policy — a scope that is far beyond what is practiced by the typical municipal government, or even what is proportional to the size of this particular city.

Vancouver is the most populated city within its namesake region, but it is also by far the smallest core city of any of Canada’s major urban regions:

  • City of Vancouver: 25% — 660,000 of 2.64 million regional residents
  • City of Calgary: 89% — 1.31 million of 1.48 million regional residents
  • City of Edmonton: 71% — 1.01 million of 1.42 million regional residents
  • City of Ottawa: 68% — 1.02 million of 1.49 million regional residents
  • City of Toronto: 45% — 2.8 million of 6.2 million regional residents
  • City of Montreal: 41% — 1.76 million of 4.3 million regional residents

For the same reasons, Vancouver also carries by far the smallest population of regional jobs, with 33% of Metro Vancouver’s 1.4 million jobs situated within City of Vancouver boundaries. Unlike other major Canadian regions, Metro Vancouver’s employment base is comparatively more distributed across the region, which plays a major factor in the required level of municipal services provided, and is indicative of revenue potential.

For instance, a total of 830,000 jobs can be found within the borders of Calgary, while 1.5 million jobs are situated within Toronto’s jurisdiction — roughly two times and four times more than Vancouver’s labour market, respectively.

Metro Vancouver may be Canada’s third-largest urban region for population, but its core city, Vancouver, is only the eighth-most populated city in the country — wedged between the Toronto suburban cities of Mississauga and Brampton. And Vancouver’s growth, compared to its suburban neighbours, such as Surrey, is stagnating.

A tiny city with a big roar

Geographic size is another factor for the size of the municipal government. Generally, smaller geographical areas push down operating costs, and higher population densities in compact areas increase efficiency through economies of scale in the use of infrastructure and the operating of services. Apart from Vancouver, all of the other core cities of Canada’s major region regions carry higher operating cost pressures from the exponentially larger geographic size of their jurisdictions:

  • City of Vancouver: 115 sq km
  • City of Calgary: 821 sq km
  • City of Edmonton: 766 sq km
  • City of Ottawa: 2,790 sq km
  • City of Toronto: 630 sq km
  • City of Montreal: 431 sq km

And these were the 2021 operating budgets of the municipal governments, with very roughly adjusted figures taking away enormous agencies, departments, and responsibilities that do not exist under the City of Vancouver. It should be emphasized that the adjusted figures provide a closer equivalent comparison between the cities:

  • City of Vancouver: $1.6 billion
  • City of Calgary: $4.7 billion (roughly adjusted: $3.3 billion)
  • City of Edmonton: $3.39 billion (roughly adjusted: $2.9 billion)
  • City of Ottawa: $3.9 billion (roughly adjusted: $2.8 billion)
  • City of Toronto: $14 billion (roughly adjusted: $8 billion)

These figures do not include the capital budgets of new construction. Some examples of major operating costs that are removed in the aforementioned adjusted comparisons include public transit (TransLink operates Vancouver’s public transit system, while the public transit systems for Calgary, Edmonton, Ottawa, and Toronto are all under their respective municipal governments), and water supply treatment and wastewater treatment (Vancouver’s water/sewage treatment infrastructure is the responsibility of Metro Vancouver Regional District).

The City of Toronto’s adjusted comparison also removes major operating costs such as Toronto Public Health, Toronto Paramedic Services, and Children’s Services, which are not comparable to the City of Vancouver as their equivalents are all areas under the direct responsibility of the BC government.

Perhaps an even more telling picture of the City of Vancouver’s financial state is its runaway year-over-year growth in its annual operating budget. Here is a breakdown of how the City of Vancouver’s annual operating budget has grown over the past decade, and how the municipality expects it to grow over the coming years:

  • 2012: $1.14 billion
  • 2013: $1.15 billion
  • 2014: $1.18 billion
  • 2015: $1.22 billion
  • 2016: $1.26 billion
  • 2017: $1.32 billion
  • 2018: $1.41 billion
  • 2019: $1.52 billion
  • 2020: $1.62 billion
  • 2021: $1.6 billion
  • 2022: $1.75 billion (approved)
  • 2023: $1.88 billion (forecasted)
  • 2024: $1.99 billion (forecasted)
  • 2025: $2.12 billion (forecasted)
  • 2026: $2.25 billion (forecasted)

Over the past decade, between 2012 and 2012, the City of Vancouver’s annual operating budget has risen by over $600 million or more than 50%.

Between the 2021 and 2022 fiscal years, there will be a year-over-year increase of $150 million or about 9%. Over the next four years from 2022 to 2026, the operating budget is forecast to grow by about $500 million or roughly 25%. Much of the cost escalation to come is from organic growth in existing structural costs, not necessarily from introducing new and improved services.

In late 2021, city staff told city council an average property tax increase of 9% to 10% in 2023 and an annual average of 7% for the five-year period from 2022 to 2026 are needed to help cover growing costs. This follows property tax increases of 3.9% in 2017, 4.2% in 2018, 4.9% in 2019, 7% in 2020, 5% in 2021, and 6.35% in 2022, along with various utility fee hikes.

City of Vancouver workforce compared

So, how many people do some of these cities employ with their far larger responsibilities?

It is challenging to compare Vancouver with the leviathan of Toronto. But the City of Calgary, for example, had more than 12,500 employees in May 2021, including approximately 3,000 public transit workers. About 28% of full-time staff make $50,000 to $75,000 annually, 30% make $75,000 to $100,000 annually, and 33% make more than $100,000 annually.

Over 12,000 employees work for the City of Edmonton, including about 3,400 maintenance and operational crew persons, and over 2,100 public transit workers.

There were 8,074 unionized and administration staff in the City of Vancouver, according to 2019 workforce statistics.

As of November 2020, the city management reported Vancouver had a municipal workforce of 8,663 staff, but this does not even include the Vancouver Police Department and Vancouver Public Library.

For comparison’s sake, in 2021, the City of Surrey had 4,515 employees, including 2,125 full-time staff and 2,390 part-time staff. Surrey’s land area of 316 sq km is home to 568,000 residents and 304,000 jobs (as previously noted, Vancouver’s land area of 115 sq km is home to 660,000 residents and about 460,000 jobs).

There are not only too many City of Vancouver staff, but too many pet projects; it is highly problematic when there is a persistent tendency for departments to work in silos and take on ephemeral roles (the explosive growth of the social planning department), as opposed to focusing on efficiently running the municipal government.

The City of Vancouver is perhaps a textbook example in Canada of what happens when public sector organizations are allowed to grow uninhibited. All organizations, whether it be the public or private sectors, aim to expand their scope and mandate, but public-sector bureaucracies tend to be less efficient as a result of the lack of any competition incentive.

Generally, newly elected officials, especially those without prior government experience, often do not have the know-how and prowess to control and manage layered bureaucracies, which design the precise details of the laws and are responsible for enforcement. In turn, unelected bureaucrats are known to overpower accountable elected officials and the general public by adding excessively complicated and inconsistent norms and systems.

In Vancouver’s municipal politics, it appears that city council is increasingly playing within the confines of a “choose your own adventure game,” but the bureaucracy will, much more often than not, pre-determine the outcomes and narratives.

That is not to say there has not been an attempt by the current city council for a changing of the guard.

Vancouver saw a change of city manager — the head of the bureaucracy — in early 2021, who announced his resignation in late 2020, and that was followed by the sudden departure of the city’s chief urban planner in March 2021. Both exits are said to be driven by city council, according to former city staff.

The departure of the chief urban planner came just weeks after city staff returned to city council with a list of accumulated 70 proposals — entailing the potential for thousands of rental homes — that had been effectively put on limbo, put on a shelve without any further action. City council has since directed city staff to send all proposals for its final consideration.

In late 2021, the city also saw the departure of a key bureaucrat who oversaw the planning process for the Vancouver Plan, which has seen much delay and limited progress, partially due to the pandemic but also because of the seemingly infinite and complex layers of considerations — far more complicated than the recent official community plans (OCPs) by neighbouring municipalities. Up until the pandemic, the city set aside a staggering budget of $18 million for the Vancouver Plan process and dedicated as many as 35 staff towards the exercise — yet the Vancouver Plan work basically excludes almost half the city and the areas where the greatest new densities can be expected, as the future of much of the city is already largely determined by recent or current neighbourhood plans (West End, Cambie Corridor, Marpole, Grandview-Woodland, and soon Broadway).

All the while, over the years, some city council members have expressed a desire to hold back major city-building decisions until after the Vancouver Plan is finalized. But this is now expected to happen after the election.

Also late last year, there was the departure of another key bureaucrat responsible for managing the city’s real estate, including the $6 billion property endowment fund. This follows the Fall 2021 controversy over the approach for determining the future of False Creek South, one of the city’s most valuable property endowment fund assets.

Furthermore, over two years ago, city council initiated a process to establish an Auditor General that would provide heightened accountability and transparency over the municipal government’s operations, and identify cost efficiencies in the bureaucracy. In August 2021, city council appointed Mike Macdonell to fill the new role of Auditor General of Vancouver, who will work with his own team, independent of city bureaucracy. Prior to last year, Vancouver was the only major Canadian city without an Auditor General for independent oversight.

This article directly continues in Part 3, which highlights how the City of Vancouver’s scope creep into federal and provincial responsibilities and other areas is taking away from its basic core municipal responsibilities. Taking into account the size of Vancouver’s population, economy, and overall tax base, this is not a financially sustainable path.

Kenneth ChanKenneth Chan

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