TransLink to hike property taxes and fares for "urgent service expansion"

TransLink to increase property taxes and fares for "urgent service expansion"

Construction next to a transit hub. (TransLink)

There will be an increase on the TransLink portion of the property tax paid by Metro Vancouver property owners in 2024.

According to the public transit authority, combined with forthcoming higher fare hikes, this is a necessary “one-year” increase to the property tax as a “stopgap” measure to fund “urgent service expansion” to reduce growing overcrowding and bus pass-ups.

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TransLink asserts the 2024 property tax rate increase will resemble an uptick of $37.00 for the median residential property, which represents about 1% of the total average property tax bill.

Other portions of the total property tax are levied by individual municipal governments, Metro Vancouver Regional District, BC Assessment, BC Municipal Finance Authority, and BC School Tax.

The 2024 property tax increase of TransLink would also translate to a $10.00 increase for properties in the quintile with an assessed value of $448,000, a $24.00 increase for properties in the quintile with an assessed value of $723,000, a $37.00 increase for properties in the quintile with an assessed value of $1.203 million, $62.00 for properties in the quintile with an assessed value of $1.744 million, and $91.00 for properties in the top 20% of assessed value.

Although TransLink’s property tax represents a small fraction of the total property tax paid by property owners, it accounts for the public transit authority’s second largest operating revenue stream.

In 2023, TransLink saw $463.1 million of property tax revenue — up from $437.9 million in 2022. This is just behind 2023’s public transit fare revenue total of $493 million, which is up from $395 million in 2022 following continued strong ridership recovery.

The other major sources of revenue are gas taxes (dropping from $424.5 million in 2022 to $390.5 million in 2023), and parking taxes (increasing from $75 million in 2022 to $83.8 million in 2023).

Although ridership has seen a strong recovery, fare revenues continue to be significantly down from pre-pandemic levels due in major part to passengers buying cheaper single-use fares for the fewer trips they take due to semi-remote office work, as opposed to more expensive monthly passes. As of early 2024, ridership has recovered to over 90% of pre-pandemic 2019 volumes.

Gas tax revenues were down primarily due to a refund of previous gas tax overpayments in the first quarter of 2023 and lower gas volumes, which were partially offset by higher diesel volumes. There is also a long-term downward trajectory in gas tax revenues due to the improved fuel economy of new vehicles, and the accelerating transition towards battery-electric vehicles.

As well, since 2020, TransLink has enacted Development Cost Charges (DCCs) on new residential, commercial, and industrial developments, calculated on a per square footage basis. However, DCCs fell from $25.2 million in 2022 to $17.3 million in 2023 due to “less expenditures on eligible projects” last year.

TransLink states it is directing the 2024 property tax increase and 2025 and 2026’s higher annual fare increases to support urgent service expansion, with the rollout of the new service improvements starting in September 2024 through 2025. This includes improved frequencies and capacities on 60 bus routes (25% of the total number of bus routes), one new bus route serving Surrey, 11 bus routes with extended service hours into the evening, more bus priority measures to speed up buses and improve reliability, higher frequencies on SkyTrain Canada Line, earlier SeaBus sailings, and adding more cars to West Coast Express trains as demand returns.

The average 2024 fare increase beginning July 1 will be relatively low at 2.3%, which continues the same annual rate of increase since 2021, but there will be elevated fare hikes of 4% in 2025 and 3% in 2026 to support the urgent service expansion, before the arrival of potential additional funding from the provincial and federal governments.

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