Victoria’s mayor has a plan to ease the burden on cash-strapped seniors, but it’s a sign that municipalities are taking a bigger and bigger bite out of homeowners’ wallets.
Mayor Dean Fortin and Coun. Ben Isitt persuaded their fellow council members to ask the province to change the property-tax deferment program so it includes municipal utility fees, as well as municipal taxes.
The proposal is an acknowledgment that utility fees are rising to the point where they could affect the ability of seniors to stay in their homes.
The provincially funded property-tax deferment program allows homeowners who are over 55 or disabled to put off paying property taxes as long as they own and live in their homes.
The provincial government pays the taxes to the municipality and collects from the homeowner years or decades later. When the home is sold, the deferred taxes plus nominal interest are paid from the proceeds.
The deferment is available to Canadian citizens or permanent residents who have at least 25 per cent equity in their homes. The plan, established in 1974, allows seniors to stay in their homes longer, and in an era of rising property values, it can make a difference.
Last year, the program was used by 1,160 homeowners in the city of Victoria, a significant increase from the 377 in 2006. The numbers are likely to continue to rise.
Fortin maintains that switching the burden to utility fees from property taxes makes no difference because residents have to pay either way. He argues it can even work to the homeowner’s advantage.
“It also allows an individual to somewhat influence his own costs. I can cut down how much water I use or I can decrease the amount of water I put in a storm-drain system by doing some changes.”
Still, he recognizes that moving charges out of taxes (which can be deferred) to fees (which can’t) will hit low-income homeowners hard.
The idea of deferring fees as well as taxes is novel.
Alberta has a tax-deferment program, with almost identical rules. In other provinces, deferment programs are usually provided by individual cities. All these programs apply only to taxes, not fees.
Fees are going up everywhere. In Victoria, for instance, residents face a property tax increase of 3.25 per cent. On top of that, they will pay 3.4 per cent more for the sewage utility fee, $17 more for the water consumption fee, $3.85 more for the annual meter service charge and another $20 for backyard garbage pickup.
The water-consumption fee will go up even though residents are using less water, because the utility needs the money for continued upgrades.
Victoria’s planned stormwater utility will move another chunk of money out of property taxes and into a new fee. Residents will be able to reduce their fees by upgrading their properties to cut back on runoff, but it’s unlikely most seniors would be able to afford such work.
In addition, residents face a $37 charge for the first part of the Capital Regional District’s sewage-treatment project, with more to come when the project is finished.
The numbers aren’t huge, and some will vary by usage, but they are piling up in Victoria and other municipalities. At the same time, the provincial government has fallen in love with increasing its fees as a way to keep taxes down.
The situation is likely to get worse, as municipal infrastructure crumbles with age, and senior governments leave municipalities to pick up most of the tab.
Fortin’s and Isitt’s proposal is a welcome break for seniors, but it doesn’t fix the problem of the steadily increasing load of fees on all taxpayers.
