The budget process is not finished, but most of the big decisions have been made.
The main one, how much residents are going to pay in taxes, has been set at a 6.75 per cent increase over last year.
While that would seem to be a lot, under normal circumstances over the past 20 years, it is almost precisely reflective of Canada’s inflation rate. While some economists predict the country’s economy will steady back to about three per cent inflation by the end of 2023, it was up as high as eight per cent a year ago, and according to the International Monetary Fund, the global rate of inflation will be in the 6.6 range. Canada’s stable institution-based economy should fare better than that, but it is not going to be business as usual at rates prior to the pandemic.
The Village of Burns Lake’s budget, said director of finance Pamela Anderson, was built on the estimated inflation rate, plus paying off some special bills.
“For this budget that we’ve presented, to balance the budget with no cuts, we are looking at a 7.73 per cent increase. The majority of that is a four per cent inflationary increase we are expecting for 2023,” Anderson said. She also explained that a commitment for some recreation expenditures had been made, and there was also the need to restock the town’s reserve fund, which got tapped into last year, precisely proving the need to have it on hand.
Only nominal increases in any particular department were expected, other than water rates slated to jump about 20 per cent. It was generally speaking a stay-the-course budget, with the caveat of there being the jump in inflation not just in Canada but internationally.
While some municipalities are voting in double-digit budgets, Surrey’s proposed to be a whopping 17 per cent, mayor and council in Burns Lake expressed strong reluctance to go that route.
Mayor Henry Wiebe said, “Last year we went seven per cent because we hadn’t raised taxes the previous couple of years, and we had to make up for lost time. We wouldn’t want to do that again.”
The other consideration for each year’s budget is how to distribute the tax bill in the general categories of residential, commercial and industrial. Burns Lake is berreft of heavy industry within town borders, and only a smattering of light industry interests to draw tax from. That leaves commercial and especially residential to pay the lion’s share of the town bills.
This somewhat unique tax profile requires aggressive grant-seeking by village staff in order to obtain money from other levels of government, or finding agencies like Northern Development Initiatives Trust or foundations, to pay some of the bills.
Under provincial legislation, mayor and council was told, the amount the municipality can tax the companies that deliver utilities is capped. Wiebe suggested “we go to the max every year, because once you’re behind you can never catch up” on those line items.
Councillor Charlie Rensby agreed, saying “I very much agree with increasing the rates to utility companies. Much of us having to increase the taxes has to do with them increasing their rates, so that circle goes around.”
The 6.75 per cent increase is also greatly lower than the rate-jump in assessed property value. While residents across the province were fearful that B.C.’s overall spike in land values was going to directly correlate with the tax bill they were about to get handed, Burns Lake’s tax bill isn’t even half of the property value increase in this region.
Calculations are still being made. The budget is not precisely finished yet, and council could change its mind about the balance struck so far between keeping services in place and needing income from residents. The fiscal year end is approaching and the passing of the draft budget and tax rate is a decision in principle with still more deliberations in the weeks ahead.