As a new council is about to begin its work at Saanich’s Municipal Hall, they will face a list of financial File photo

New Saanich council faces long list of financial issues

Issues include Employer Health Tax, labour costs and unknowns like final Regina Park costs

If politics is about choices, Saanich’s new council will face no shortage of difficult financial dilemmas, soon after they take the oath of office.

A 2017 report found Saanich faces the prospect of raising property taxes by almost five per cent in 2019 to help cover the cost of a new provincial tax and labour agreements among other circumstances.

RELATED: Saanich taxpayers facing prospect of 5% tax hike in 2019

Key among is the Employer Health Tax (EHT) scheduled to come into effect Jan. 1, 2019, forcing Saanich to raise an additional $1.78 million to cover it.

“This equates to 1.3 per cent [property] tax increase, 0.4 per cent water rate increase and 0.2 per cent sewer rate increase,” said Valla Tinney, Saanich’s director of finance, in a presentation earlier this year. “In future years, the impact will be tied to collective agreement increases.”

Saanich is raising water and sewer rates to exclusively cover costs for staff who work in its utilities.

The EHT offsets revenues lost by the pending elimination of Medical Services Premiums (MSPs) effective January 1, 2020, with the province “double-dipping” in 2019 by charging individuals MSPs and employers the new tax according to key based on their payroll size.

The tax rate will start at 0.98 per cent for annual payrolls in excess of $500,000 and will gradually increase to 1.95 per cent for B.C. payrolls in excess of $1,500,000 per year.

Saanich has about 1,600 employees, including fire and police officers, with a payroll of $89.348 million based on 2017 figures, and was already contributing to the MSPs of employees.

Efforts to convince the provincial government of changes to the tax failed as the provincial government quietly tabled the legislation at the same time it tabled its more controversial speculation and home vacancy tax.

RELATED: Carole James avoids questions on B.C.’s payroll tax (with video)

The actual effects remain unknown, but a Union of British Columbia Municipalities (UBCM) report says warns local governments will feel a “significant” impact on their finances as the new tax creates a menu of politically unappetizing choices.

If Saanich were to absorb the increase by reducing operating budgets, it would have to cut at least 15 positions, leading to a corresponding cut in service levels. Saanich could also reverse past efforts to put aside away funding for future infrastructure replacements, according to the report.

Comments from chief administrative officer Paul Thorkelsson suggests Saanich would find it difficult to absorb the increase without raising taxes. “Saanich cannot manage a property tax increase [of 1.3 per cent] from this additional expense through simple ‘belt tightening,’” he said. “We would have to amputate a limb.”

RELATED: Report predicts health tax will bleed Saanich’s coffers

This rhetoric prompted a response from Grumpy Taxpayer$, a local citizens group, which accused Saanich of pushing an alarmist message. “There’s no need to cut off a limb, but simply a willingness to go on a diet,” said board member Bruce Kennedy.

Other known cost drivers include a hike of 2 per cent under Saanich’s agreement with employees represented by the Canadian Union of Public Employees (CUPE) and a hike of 2.5 per cent for employees represented by the International Association of Firefighters.

RELATED: Final cost for Saanich homeless camp approaches $1 million

Financial unknowns, meanwhile, include the cost of the homeless camp in Regina Park, which may lead to higher taxes.

Councillors will also eventually face a question that directly impacts them: should they raise their own remuneration rates to compensate the federal government’s decision to tax non-accountable allowances of certain municipal officers for work-related expenses as income?

RELATED: Council salaries a taxing issue for Saanich

These expenses have historically made up one-third of council’s total remuneration, and some municipal organizations including the Capital Regional District (CRD) have already raised remuneration rates to compensate officers.

Saanich’s old council deferred that question to the new one.


Like us on Facebook and follow us on Twitter

wolfgang.depner@saanichnews.com

Just Posted

CRD warns commuters of traffic interruptions planned for Interurban Road

Wastewater treatment project construction expected to affect traffic for one week

Grease fire in Saanich prompts reminder to have proper fire extinguisher on hand

One woman was involved in the incident and treated on-scene for smoke inhalation

The Salvation Army rings in Christmas Kettle Campaign in Victoria

Goal is to raise $250,000 this year for Vancouver Island residents needing support

Lau’Welnew Tribal school students rock Mary Winspear Centre

Thursday’s Rock the Salish Sea show starts at 7 p.m.

VicPD warns local businesses of new scam

A man posing as a homeowner has been requesting painting services to try to get banking information

POLL: Do you plan on making any purchases on Black Friday?

We’ve all seen the images. Shoppers rioting outside of a store in… Continue reading

B.C. man gets 23 years for murder of Belgian tourist near Boston Bar

Sean McKenzie pleaded guilty to second-degree murder of 28-year-old Amelie Christelle Sakkalis

‘Very disrespectful’: B.C. first responder irked by motorists recording collisions on cellphones

Central Cariboo Search and Rescue deputy chief challenges motorists to break the habit

Daily cannabis linked to reduction in opioid use: B.C. researchres

Researchers looked at a group of 1,152 people in Vancouver who reported substance use and chronic pain

Island student lobbies school board for dress code consistency

Jaylene Kuo contacted school trustees after seeing dress guidelines at brother’s school

Bids down, costs up on Highway 1, B.C. independent contractors say

Rally protests NDP government’s union-only public construction

Members of little people community applaud change to drop ‘midget’ term

‘It’s not about sensitivity,’ says Allan Redford, the president of the Little People of Canada

Little progress in preventing sudden infant deaths since last report: BC Coroner

Coroners panel studied 141 sleep-related sudden infant deaths between 2013 and 2018

Most Read