A new provincial tax will appear as a separate line on local property tax bills in 2019, as council meeting as committee-of-the-whole set the budget guidelines for 2019.
Councillors approved the guidelines after receiving a report that projected a property tax increase of nearly five per cent because of rising labour costs and the pending introduction of a new provincial health tax — the Employer Health Tax (EHT) — designed to replace Medical Service Premiums (MSPs).
The figure loomed in the background as council discussed the guidelines that will shape future budget discussions.
This framing happened two months earlier than usual as municipality braces itself for the effects of the EHT. Its introduction will require Saanich to raise an additional $1.78 million dollars and Saanich’s decision to single out the EHT on property tax bills appears as an attempt by Saanich to separate itself from the tax.
“How we display it to the public will be important,” said Coun. Susan Brice. Coun. Karen Harper agreed. “It’s important to recognize that this is a download from the province, and it is important for the tax bill to recognize this,” she said.
Mayor Richard Atwell agreed with the recommendation, but repeated earlier demands that Saanich state its opposition to the EHT. “I still feel this council needs to take a position,” he said. This tax will impact all residents, and it is not clear whether the new tax will actually improve provincial health care, said Atwell, in describing the elimination of the MSP premiums as a political promise.
But council, despite not-so-subtle urging from staff, flinched at identifying any specific services areas suitable for reduction and elimination. It instead asked staff to develop reductions scenarios of 0.5 per cent and one per cent for all departments.
Coun. Colin Plant acknowledged that this approach has historically failed in the past and suggested that council may once again fail to follow through. “We may or may not act on it,” he said. But councillors at the very least will have a list of shared cuts in front of them, he said.
Atwell questioned this approach. Council, he said, needs to set priorities. To govern is to choose, he suggested.
Council also scheduled a meeting with the Saanich police board to discuss next year’s police budget. Councillors, however, voted against a motion from Harper to limit the overall future tax increase to the Consumer Price Index (CPI) plus 0.5 per cent. Based on available figures, it would have limited the 2019 property tax increase to 2.4 per cent.
Harper said the many Saanich residents live on fixed incomes and the municipality should be prepared to do the same, a point that drew support from Atwell.
Coun. Judy Brownoff said the proposed cap is not realistic because a limit of 2.4 per cent would not leave room for other crucial commitments including capital projects, she said.
The public had earlier heard from Paul Thorkelsson, chief administrative officer, that Saanich could simply meet that cap by neglecting its capital infrastructure. “I would suggest to council this is somewhat problematic,” he said.
He also drew attention to the capacity gaps that have emerged following a decade of operational restraint. Contrary to prevailing public expectations, Saanich has no “fat” to cut, he said.
Monday’s debate around the guidelines lasted almost two hours, and featured several sharp exchanges.