An Unfair, Unnecessary And Improper Business Subsidy

By Mike Archer. There is no city in BC that has put so much of the cost of economic growth and development onto existing residential taxpayers as Abbotsford.

There is no city in BC that has made it cheaper to do business or more expensive to be a residential property owner.

And yet housing starts, building permits and economic growth continue to decline and social costs (health care, social services, HIV, Hep C, addiction, teen drug use) continue to rise.

During the last ten years we have shifted the burden of Development Cost Charges (DCCs) onto existing residents, something the legislation was never intended to allow for, and we have forced residential taxpayers to subsidize massive projects like the Abbotsford Entertainment and Sports Centre (AESC) and two federal highway overpasses for the benefit of the business community.

Those benefits have failed to materialize and for some reason the City seems to believe it is OK to have homeowners pay for their bad planning, poor decision-making and blundering and inexplicable inability to listen to reason from people who know whereof they speak.

While the provision of tax funds to private organizations is illegal, the City of Abbotsford has seemed at times bound and determined to find ways of either skirting the law or its intent and hoping no one has the money to sue them for their actions.

Abbotsford’s municipal staff now seem intent on funneling as many residential tax dollars through to the business community as they can by means of hidden subsidies like preferential water rates and relaxed implementation provisions.

As revealed on Abbotsford Today Monday, in documents released by Lynn Perrin, City staff have proposed that the City should defer the application of higher water rates to commercial and industrial property owners because, in part, it might create problems with their budgets.

Homeowners apparently don’t have budgets.

This after a three-year phase in of the rates which has allowed the commercial and industrial sectors to be effectively subsidised by homeowners.

Councillor Henry Braun managed to have the staff report sent back to staff seeking additional information but the fix appears to be in.

Let’s look at some figures:

The sum total of the 96 Tier-2 customers (10,001 – 100,000 m3) and five Tier-3 customers (100,001 equals 101 businesses, or 2.7% of the total.  However, those 101 businesses contribute roughly 37% of the sewer volume.

Sherril Guthrie is correct … we should be told who the businesses are, who their principals are and what, if any, relationships they may have with the City of Abbotsford, it’s powerful committee system or any of it’s politicians.

Increasing the rates of commercial and industrial customer to equal the residential rate should not be a hardship on those businesses (they can deduct the costs on their taxes anyway), nor should implementation be delayed putting additional pressure on residential homeowners to pay an unfair portion of the burden they played no part in creating.

Bear in mind – there has been no increase in service levels, water quality or any justification given for doubling the water rates of Abbotsford homeowners other than the fact the City wants/needs the money.

With a negative balance in our DCC reserves and the treasury bleeding funds directly from taxpayers to rich business owners like the Calgary Flames and their local ownership group, just how much is the average homeowner supposed to take?

As Councillor Henry Braun has argued before, what should really happen is that the sewer rates for residents should come down, while those of the ICI/Ag sector should go up.

Furthermore, the current sewer rates paid by commercial and industrial customer are below what it costs the City on a m3 basis and should be brought into line, if for no other reason that businesses do not need or deserve sewer costs which are subsidised by the Abbotsford taxpayer.

There is no reason should the ICI/Ag sector should get an additional seven months, on top of a three-year phase in plan, something residential customers didn’t get, in order to pay their fare share of Abbotsford water and sewer bills.

In its desperation to deal with plummeting housing starts, building permits which are at a standstill and economic growth which appears to have come to an end, the City has a desperate need for cash as, in law, no city is allowed to operate at a deficit.

A total of $41 million disappeared from Abbotsford’s DCC fund between 2006 and 2012 as the costs of Plan A, which were predicted by opponents and vigorously denied by proponents like senior city staff and politicians like Bruce Beck and John Smith, have become a serious cause of concern.

It seems almost incomprehensible that the City, facing such daunting financial challenges, should be prepared to further increase water rates on residential homeowners while subsidising those of business even more.

We are taking money from residential taxpayers and using it to subsidise commercial and industrial taxpayers at so many levels in Abbotsford it is beginning to look like this is simply how municipal governance works here.

With no end game in sight, such a conclusion is becoming more and more difficult to avoid.