This represents only $131,234,876 worth of the property tax exemptions provided by the City of Vancouver in 2008
You read the headline correctly, the City of Vancouver will forgo a little over $180 million dollars in property taxes this year, says a brief report to be debated at Council tomorrow. By now we all know that Vancouver residential taxpayers are facing the highest tax increase in the region. Even a small portion of this lost revenue could have helped to offset the 8% tax hike.
The report titled 2008 Property Tax Exemptions is coming before Council tomorrow for debate and ratification. It won't get the same media attention as the budget report, but it should. That's because it provides a very interesting analysis of forgone property tax revenue.
Before you jump to the conclusion that some of these exemptions are going to provide tax breaks for big banks or corporations, think again. The report indicates that government agencies actually make up the lion's share of the exemptions. Other groups benefiting from tax exemptions include charitable organizations, educational institutions, hospital and health authorities, churches and something called "pollution control". The following is a list of property tax exemptions by total value:
- Federal and Crown agencies $9,712,800*
- Provincial and Crown agencies $21,603,928*
- Consular properties $113,749
- Metro Vancouver $898,550
- Translink $26,436,788
- Charitable organizations 2,881,579
- Educational institutions $36,774,999 (this includes $3,478,393 for private schools)
- Hospital and Health authorities $14,209,194
- BC Cancer Agency $1,647,617
- Churches $1,206,773
- Pollution control $23,478
- City of Vancouver owned property $66,226,504*
Oddly enough, the report states "there is no financial impact" related to this report. I think what staff should have said is the report itself doesn't have a financial impact, but the lost revenue does.
It should be noted this list of forgone revenue doesn't even include the tens of millions of dollars the City will lose over coming years in relation to the 12 parcels of land they plan to provide the Province for social housing.
While no one will argue that homelessness is not worth eliminating, however, the "solutions" have normally been paid for by provincial and federal government coffers. This is especially important when you consider that Vancouver taxpayers shoulder a greater financial burden compared to other municipalities when it comes to social housing.
For the sake of argument, just imagine the City of Vancouver didn't own so much land and they decided to sell some of it off. Not only would they get the revenue from the property sale, but that figure of $66 million in tax exemptions for City-owned land would begin to drop resulting in more net revenue to the City.
I'm not advocating to sell off land held in the Property Endowment Fund, or other City-owned properties for that matter. Rather, I'm just pointing out that the City is losing out on a lot of revenue because it has made a policy decision to own a lot of land in the City.
So what could the City of Vancouver do with $181 million in additional revenue this year if there were no property tax exemptions? Well, every $5 million dollars in revenue to the City means a 1% reduction in property taxes for everyone. I'll leave you to do the math.
*It should be noted that the federal and provincial governments provide the City of Vancouver with over $20 million dollar for payments-in-lieu of taxes. The federal and provincial exemptions are considered as statutory. The City of Vancouver also collects about $11 million dollars worth of payment-in-lieu from tax exempt leased property.