Council approves 2021 Operating and Capital Budgets
Vancouver City Council has approved a $1.6 billion operating budget for 2021 that is lower than our original planned budget for 2020, and reflects a property tax increase of 5%.
The approved budget allows for regular operations to continue, including additional costs and some operating adjustments due to the pandemic, addresses critical risks and service gaps, and covers our annual inflationary fixed cost increases. As the approved 2021 Budget is lower than the 2020 Budget by $19 million or roughly 1%, some planned initiatives will need to be deferred and service levels for the public will be also impacted.
Average property tax for 2021
The 5% tax increase results in the following average property tax increase amounts for 2021 (based on median property values in each category) after adjusting for the impact of the Council-directed tax shift of .5% property tax share from non-residential to residential classes:
- $146 for a single-family home (assessed at $1.6 million)
- $64 for a condo or strata unit (assessed at $688,000)
- $166 for a business property (assessed at $1 million)
- $104 for a residential property overall (assessed at $1.1 million).
The actual tax bill for each property owner will be different than the above average amounts, and will depend on the assessed value of the property, as well as the relative assessed value of that property to others in the same class. These estimates also reflect the City of Vancouver portion of taxes only – a property owner’s tax bill also includes utility fees, Provincial school taxes, and taxes levied by other taxing authorities including Translink, Metro Vancouver, BC Assessment, and the Municipal Finance Authority.
Impact of COVID-19 on finances
The COVID-19 pandemic had a significant impact on our finances in 2020 including a projected $85 million in reduced revenue at year end, $13 million in additional costs for the emergency response to support the community, and increased costs for regular operations during the pandemic such as personal protective equipment for frontline workers. We expect to draw down our revenue stabilization reserve by approximately $34 million to temporarily offset the 2020 budget shortfall.
Our revenues are not anticipated to return to pre-2020 levels next year, and draws on the stabilization reserve will again be required in 2021.