City of Surrey proposes property tax hike of 17.5% in 2023

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

Residents and businesses in Surrey could be hit with the most significant property tax increase in memory in 2023.

Just before 2:30 pm on Saturday over the Family Day long weekend, the City of Surrey published a report outlining its proposal for considering a municipal property tax hike of 17.5% this year.

This would go towards substantially increased costs in multiple areas of the operating budget, including fulfilling specific civic election commitments by Mayor Brenda Locke and Surrey City Council to reverse course on fully growing the new municipal police force.

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Of the 17.5%, more than half or 9.5% would be dedicated to covering the policing operating budget shortfall of $116.6 million — equivalent to about $219 more in property taxes for the average single-family home. This portion of the property tax increase would offset the policing operating budget shortfall over three years through 2025.

The municipal government states part of the policing budget shortfall comes from the provincial government’s delay on providing the final approval needed to support the City’s decision to abolish Surrey Police Services (SPS) and retain the Surrey RCMP. The provincial government missed the City’s requested deadline of January 31 due to a desire for more information, and the target date for such a decision has since been moved to the end of March.

The largest proposed budget line item associated with winding down the SPS is $82 million in severance. To date, SPS has grown to a workforce size of about 400 officers and civilian staff, which represents about over $200 million in costs, including sunk costs, based on the SPS’ account.

According to the City’s calculation, maintaining the Surrey RCMP will cost an estimated $235 million less in combined total annual operating costs over five years compared to retaining and fulling transitioning to the SPS.

Last month, SPS Chief Constable Lipinski disputed Mayor Locke’s preliminary estimated figures, suggesting at the time the major property tax increase that had been hinted is unnecessary.

“As previously stated by SPS, a number of financial assumptions were used in the City’s Plan to Retain the RCMP as the Police of Jurisdiction in Surrey in order to arrive at an inflated cost ($235 million) of the transition over the next five years,” asserted Chief Lipinski.

“These assumptions included a nine-month pause in the transition which has not been previously contemplated by any party, and an assertion that the transition would take another five years, which is also inconsistent with previous discussions with the three levels of government. It is also unclear why a municipality would ask its residents to pay for costs that would be incurred over a five-year period, in just one year.”

Another 7% of the property tax hike would fund various general costs, including covering cost inflation impacts to all areas of City operations, as well as hiring an additional 25 police officers, 20 firefighters, and 10 bylaw officers in 2023. This is equivalent to about $161 more in property taxes for the average single-family home.

The third property tax hike is 1% for the Roads and Traffic Levy to help support ongoing operations, maintenance, and improvements of transportation infrastructure. This is an additional $23 in property taxes for the average single-family home.

All three components of the 17.5% property tax hike in 2023 have a combined real total value of about $403, which would bring the annual property tax for the average assessed single-family home in Surrey to $3,000 — placing Surrey in the middle for property taxes amongst Metro Vancouver’s municipal governments.

In a statement this afternoon, Mayor Locke blamed former Mayor Doug McCallum and the previous City Council for “how much this misguided experiment to change policing in Surrey is costing Surrey residents and businesses.”

Over the last four years, under McCallum and the previous City Council, the official annual property tax increase rate was held at 2.9%. But this does not include the impact of the decision to triple the flat-rate Capital Parcel Tax from $100 to $300 annually starting in 2021, which alone amounted to the equivalent of a 10% property tax hike.

“The money wasted by the policing transition, combined with the so-called 2.9% property tax rate for four years implemented by the previous Council, means we are now having to play catch up on core City services, such as the hiring of firefighters and bylaw officers. Surrey can ill afford to continue with the police transition and we are starting to set our finances straight with this budget,” continued Locke.

The municipal government is seeking public input on the proposed capital and operating budgets and associated tax hikes over the coming weeks, ahead of City Council’s review and decision on March 6.

Meanwhile at the City of Vancouver, as of late 2022, a 5% property tax hike is being explored for 2023, but it remains to be seen whether this figure will hold. Vancouver’s municipal government is currently conducting public consultation on the 2023 operating budget, and a decision will also be made by its City Council next month.

It should be noted that both the proposed Surrey and Vancouver municipal property tax increases do not account for other potential property tax hikes from other sources that makeup the total property tax, including Metro Vancouver Regional District, TransLink, the provincial government’s school tax, BC Assessment, and the Municipal Finance Authority.

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