Runaway Train: A Closer Look at the Exceptional Growth in B.C. Municipal Spending
Highlights
British Columbians face serious affordability challenges. A prominent contributor to declining affordability in B.C. over the past decade or more has been exceptionally high property tax inflation. This is a direct consequence of runaway growth in municipal operating expenses, which are principally funded by property taxes.
Property taxes on owner-occupied housing in the B.C. consumer price index (CPI) increased by a staggering 94% from January 2010 to July 2025. This was more than double the rate of overall CPI inflation (42%), and nearly double the rate of property tax inflation nationally (54%). These figures would be even higher if they included the indirect impact on consumer prices from property tax hikes on businesses and landlords.
Our analysis of the latest available decade of municipal operating spending data for 2013-23 shows that nearly four out of five B.C. municipalities grew real (i.e., inflation-adjusted) spending faster than municipal population growth, often significantly so. This is true across every region.
Over 2013–23, “excess spending” (i.e., the additional amount municipalities spent beyond what would normally be expected if spending had kept pace with municipal population growth and inflation) totalled nearly $3.8 billion (in real 2023 dollars), or $831 per capita. In other words, municipalities spent significantly more than what rising costs and a larger population alone can explain.
Municipalities are still spending most of their operating budgets on “core” responsibilities like policing, sanitation, parks, staffing, and transit. Yet spending has risen much faster than demographics or inflation can explain. Unless there has been a commensurate improvement in core service quality, the data may indicate they are being delivered less efficiently.
Spending on “non-core” responsibilities including health, housing and social services has skyrocketed – despite these being areas of provincial responsibility. This raises questions about whether there has been an implicit downloading of responsibilities by the province, a decision by municipal leaders to broaden their mandate, or an inefficient duplication of activities between provincial and local governments. Perhaps municipalities have become less efficient at delivering core services because they are distracted by scope creep.
In B.C.’s largest regional district, Metro Vancouver, nominal operating spending soared by 71% over 2013-23, far outpacing regional population growth and inflation. Total “excess spending” in Metro Vancouver over 2013-23 – above what regional population growth and inflation would justify – was about $275 million, or $100 per capita (note, this is in addition to the “excess spending” by municipalities). The increase was concentrated in core service areas, which may indicate dwindling efficiency. There was also a significant increase in spending on “other services and adjustments”, a vaguely defined category that doubled its budget share and grew by over 200% in real terms. For a regional government lacking transparency and democratic accountability, these patterns are concerning.
To prevent further deterioration in affordability, we recommend tying municipal spending growth to population and inflation, restoring independent provincial oversight, linking spending to service outcomes, and reviewing both municipal mandates and Metro Vancouver’s governance to improve accountability and efficiency.