I am now commuting to work on the new Canada Line and like it very much.  It takes me pretty much door to door in air conditioned comfort with no waits and no hassle.

As I sit back, I try to remember to thank the Premier for the gifts he has bestowed.  I ski and so will also enjoy his generosity  in building the new fast highway to Whistler that will cut 20 minutes off that mad drive on Friday night and back home on Sunday.  As one of the lucky 10% who came out ahead on the tax cuts compared to all of the extra charges that were imposed in the name of user pay, like the Medicare premium increase, I am doing quite well thank you on this government.  Admittedly I have not added my few extra dollars to investment in the BC economy, what with the mess in the forest industry, power generation (I can’t get one of those valuable permits) and manufacturing, but I feel that I need to look after myself in these uncertain times.

Some people question the cost of these big, feel good mega projects.  The all in cost of  these two projects is close to $3 billion.  These are two of the two biggest mega-projects in BC history.  Some question whether enough people will actually benefit from these projects to justify them, particularly compared to the alternatives.

The Whistler highway clearly did not need to be so extravagant.  Almost half of the total expenditure could have been saved by concentrating on bottlenecks and safety improvements only, and three quarters of the time saved in driving the route would have been achieved. And if safety improvements had been the priority and photo radar had been continued on that highway alone, accidents causing fatal or major injury could be reduced by almost as much as the total spending on the new highway.  But restraint has not been the priority of the big spending BC government. The splash and awe of blowing away rock faces and tunneling through mountains was too seductive.  And of course the big contracts to friends in the construction industry. So my gratitude to the Premier is somewhat tempered by my fiscal conservative instincts.

How about the Canada Line?  Am I equally as stinting in my gratitude.  I will try to avoid thinking too much about the $400 million dollar windfall to the contractor because the government missed the fact that it ws needlessly paying for tunneling that was not required and never done.  So much for the efficiency and cost savings of P3’s.  Those who know about these things say a rapid rail alternative could have been build for almost half the price and a dedicated rapid bus route for even less.  Both of these would have left plentiful dollars for Translink to resolve its financial crisis.  There are problems with these alternatives however. Neither address the problem of street level interaction with surface vehicle traffic.  Underground is much better in dealing with traffic congestion in the downtown.  Some speed is lost and routing is a problem with both alternatives.   Further, merchants would not abide the loss of parking lanes required over major parts of the route, and it is doubtful if Cambie area residents would have let the boulevard be converted to train or bus lanes.  And research shows that something around 80% of residents of Greater Vancouver want Sky Trains, not buses or surface rail.  The people presumably should have some weight in the decision.

Overall if rapid transit is to be provided to the airport and Richmond the Canada Line was probably the best choice. Of course that is not much comfort to those further east, who were promised the Evergreen line ahead of the Richmond line by Translink, but who have the unfortunate habit of voting NDP.  The Evergreen line, much to their chagrin, is looking more and more like a distant mirage, as Translink runs out of money and the BC government says no help will be forthcoming.  Meanwhile those of us in the Cambie corridor (perhaps not counting the merchants whose business collapsed during construction) will enjoy our fast and comfortable ride.

July 2 marked the deadline to pay local property taxes and many homeowners are justified in asking, “Why are my taxes rising so steeply?”

Part of the answer is that local governments in British Columbia are among the least supported in Canada by provincial financing, and the amount of such support has dropped dramatically over the past ten years.

For example, the BC government provided about $5,325 million to municipal governments in 2007-2008, compared to about $8,850 million in 1997-1998. Over the same period, off-loading has been substantial and local government costs have increased markedly.

Taxpayers in Vancouver have been especially burdened. Notwithstanding unprecedented growth in the property tax base, residents experienced a tax increase of almost 8% in 2009,and there is little relief in sight.

Approximately a quarter ofthis increase was due to a shift of the tax load from businesses to residents, and city council has vowed to continue shifting the tax burden onto residential taxpayers. Furthermore, there is little likelihood of any reduction in cost pressures in the near future. Indeed with the Olympics in 2010, additional cost pressures are almost a certainty.

It is highly unlikely that residential taxpayers will be willing to accept tax increases in the 8%-10% range in coming years. The 2009 increase, at a time when inflation is below 2% and wages are generally frozen, failed to galvanize focused opposition. Arguably this was because of the unusual silence of the city’s business organizations, the usual lead voices in anti-tax campaigns. This silence was no doubt intended to reward the city for the tax shift from commercial to residential property, but it seems unlikely that it can be counted on to continue in the future.

The danger, of course, is that in the next budget cycle, tax resistance will blossom into a full-blown tax revolt in the face of rising costs. If so, councillors will find that further tax increases could very well be at the cost of their electoral survival. In an effort to bring tax increases in line with inflation, cuts in programs and services could become inevitable. The hopes and dreams of progressive citizens could be smashed by a revenue crunch that few saw coming.

There has been virtually no public discussion of this impending crisis in local government finance. The province, with its own financial crisis, has no inclination to reverse its abandonment of local government, and city councillors don’t see any point in stirring up voters and employees until they absolutely have to.

This is short-sighted. It is essential that a dialogue begin between taxpayers and their elected city councils. Tax increases on the same scale as those of 2009 will almost certainly be unacceptable. Other alternatives must be explored and pursued.

The real problem is that local governments have been starved of finances over the past decade. They have been forced to rely almost exclusively on one source of revenue – the property tax base – which includes the local property tax and property-based user charges. In British Columbia, these together make up about 85% of municipal revenue, the highest proportion in Canada.

The only alternative to ever growing charges on property is to expand the tax base of municipalities.The heavy reliance on property taxes is not sustainable if local services are to survive in the form we now know them. A tax revolt cannot be disavowed as simply a matter of speculation.

Sales taxes, including fuel taxes, are an option, much as is the case in many cities in the United States. One advantage of such taxes is the burden is extended to tourists and visitors who draw on local services but contribute little to their costs. New, reformed business taxes that are fairer than property taxes are another possibility. And there are several other possibilities.

But the important point is that we need to start talking about these matters. Cities in particular are vulnerable to a wrenching fiscal crisis if we do not turn our attention to these matters.

This article first appeared on ThinkCity.