UBCM is working with the provincial government to monitor the impacts of BC’s evolving economy on local government finance. The initiative is part of the work being undertaken by the Local Government Finance Review Working Group, which has been tasked with studying the cost pressures and risks facing local governments. The Working Group has developed a set of key indicators that show how BC’s economic shift from a manufacturing to an online, service-based economy affects the property tax base and revenues and is sharing this information with local governments.
The key indicators identified by the Working Group include:
- E-commerce sales as a share of retail sales
- Vacant office space
- Shifting worksite patterns
- Motor vehicle fuel sales
- Business & light industry assessment values
- Property tax revenue from business & light industry
- Major industry assessment value and property tax
The Working Group is sharing its dashboard of indicators for 2024 which provides information on trends in each of these categories. The Working Group has also identified three key findings from its monitoring over the past year:
- Significant shifts in the balance between residential and commercial or industrial property values are not yet showing in the available data sets, although office vacancy rates are rising,
- E-commerce and working-from-home indicators may be anticipatory of future softening in the retail and office sectors. There has been a clear shift in these indicators since the pandemic.
- Traditional resource-based industries are providing a lower share of economic support to local governments through property tax revenues.
These findings are backed by trends such as the doubling of e-commerce since 2017; declining property tax value from commercial and light industry in most regions; and declining major industry tax revenue in all regions except for the northwest of BC.
For more information, visit the Local Government Financial Review Working Group webpage.
The Local Government Financial Review Working Group is tasked with developing a shared understanding of the issues raised and recommendations in UBCM’s 2021 report, Ensuring Local Government Financial Resiliency: Today’s Recovery and Tomorrow’s New Economy.
The Working Group is comprised of five staff-level members from the Province and five staff-level members from UBCM; it is co-chaired by one representative from UBCM and one from the Province. The Working Group is also supported by a UBCM Technical Finance Review Committee comprised of senior-level staff representatives from local governments around the province, who offer on-the-ground experience and perspectives.