Why is the draft tax rate for 2023 higher than in past years?

    Across the province, municipalities are faced with some tough budgets this year, because the inflation that is facing all of our residents at the grocery store is also impacting City operations as well as labour costs.  

     This year, inflation has caught up with us. The City has approved just over a 4% increase total over the past 7 years, but this has limited our ability to maintain and operate City services and infrastructure; however, we’ve been able to tackle some major infrastructure needs while limiting the impacts of capital spending on residents. This was possible through dividends from Legacy Inc. This year, the dividends Legacy is paying for capital projects offset a further potential tax increase by 14%; and utility rates by 76%

     The CPI is nearly 7% across Canada for this year, and inflation is higher in the north due to remoteness factors that impact goods and services costs, and the materials/products the City needs have seen much higher (50%+) increases. The increase proposed based on internal factors (9%), is quite similar to neighbouring municipalities, as all of us are facing inflationary pressure this year. Seven percent of the 9% that is proposed from internal requirements is due to the City’s renegotiation of three of our major union contracts this year. 

     On top of that general pressure facing all of our neighbours – we have some external costs that have led to a larger proposed increase  This year, there are a number of factors impacting the budget that are out of our control. 4.3% of the increase is due to a reduced PILT payment from the Port alone. Additionally, the tax caps continue to present a challenging budget environment. This year the caps result in a loss of $2million in potential revenue, which would have allowed us to offset the increase this year by 10%. No caps would also have given us more flexibility to invest in renewal in past years – as this program has now been in place for almost 20 years. We also have a contractual Increase related to RCMP of 1.35% - which is outside of our control.

    This is just the presentation of the draft budget with staff recommendations related to maintaining our existing service levels. From here, Council will need to look at whether the community can manage the increase, or whether we need to look at difficult cuts to service.

    The City just received $65 Million from the Province, where is that going?

    Notwithstanding the $65 million in Provincial funding we have received, there is still a significant tax increase proposed when the City; however, those funds are being directed entirely towards ‘one time’ capital spending specifically for replacing water infrastructure that’s at risk of critical failure. The funds are not allowed to be used to offset operating costs.

    We have to emphasize, this is an amazing contribution that will help us address our infrastructure deficit. Without this funding, the City would be looking to fund necessary repairs with loans, with the repayment costs translating to even higher utility fees in the future. The proposed tax increase is what is needed to cover off a deficit in our operating budgets this year to keep our services at the same level.  This grant is specifically for water distribution infrastructure, so can’t be used to reduce our operating costs.


    How can residents provide feedback on the Draft Budget?

    We encourage the community to let us know your priorities by using our budget simulation tool (available through this Rupert Talks page by scrolling down) and to attend our two formal feedback sessions on April 11th and 24th at 7 pm in Council Chambers. You can also email your feedback to finance@princerupert.ca 

    How is the City working to improve the sustainability of revenues?

    One of our main strategic goals for the past few years and continuing with our latest strategic plan has been to advocate for sustained revenues from other sources – this includes through Resource Benefits Alliance, addressing of the tax caps/Port Payment in Lieu of Taxes certainty, as well as redeveloping Watson Island to offset capital expenses. All of these are continued priorities that we are working to gain traction on, and will continue to pursue with other levels of government. 

    There’s been approvals in last year’s budget for vehicles like a Fire Truck, Dump Truck and Garbage truck. They were not purchased in 2022, and are in the 2023 Budget again. What happened to the money allocated for these purchases in the 2022 Budget?

    The City has experienced several delivery delays in vehicles purchased in 2022 that were not, or will not be delivered until 2023. Money allocated in 2022 is being carried forward from the previous year into 2023, and will be paid for these vehicles after they are delivered. The money wasn’t spent in 2022, but rather is requested to be spent this year.

    Why can’t the City implement a gas tax like they have in Vancouver to fund road repairs?

     The City does not have the legislative ability to collect taxes on gas sold within our municipal boundary. The City of Vancouver is the only community in BC with this authority, because unlike all other municipalities that are governed by something called the “Community Charter”, Vancouver has its own “Vancouver Charter” that gives them some special privileges – including the ability to levy this special form of taxation. Unfortunately, it’s not within our authority to implement that kind of tax without a legislative change to the Community Charter, and that would need to come from the Province.

    We have $65 Million and $4.8 Million for water infrastructure – why are those numbers showing up as a cost to the taxypayers of Prince Rupert in the budget?

    To be clear, these funds are grants – and so both amounts listed above have no cost to City taxpayers. The $65 Million is allocated specifically towards 26 km of priority areas for watermain replacement. Even when projects are grant funded, they are laid out in the City’s budget documents to ensure that we are accurately showing the community the revenue coming in, and expenses going out in the City’s budget. Within the section of our Budget Document that identifies capital expenses for the year, there is a short table in each section that notes where funding for a project comes from – which will identify whether it’s funded by grants, dividends, accruals (savings), reserves, or taxation. Spending must also be approved by Council before it is final.

    There is an additional amount showing for borrowing to repair infrastructure – why can’t the City use the funds provided for the Province, instead of borrowing?

    In order to receive Provincial funding, the City must also commit to funding a portion of the infrastructure replacement work.  In 2023, the City is proposing to borrow $4.75 Million in order to complete the design works necessary to initiate this major undertaking of water infrastructure replacement. In addition, in future we anticipate additional borrowing in order to replace associated sewer infrastructure so all underground assets are renewed at once.

    There is $750,000 allocated towards annual waterline repairs. Why can’t the City use the $65 Million to cover that expense?

    The money provided to the City for watermain repairs is only for the 26 km of priority areas. The $750,000 noted above refers to the City’s annual operating budget (paid for within our existing utility fees) for repairs of the water system in the community as a whole. This must be budgeted to ensure that the City can still conduct day-to-day repairs in all sections of the community.

    Why is the City using land for wastewater treatment?

    The lands selected for the City’s wastewater treatment, which will start with a section of currently unused property in behind Omenica Avenue, are those areas that have low potential for future development. With the proposed wetland wastewater treatment system, the areas selected are existing marshy locations that are unfavourable for development, and can be maintained as green spaces. If this initial project is successful, the City will pursue this type of wetland system in multiple other marshy areas of the community.

    It should be noted that the alternative option for wastewater treatment would cost up to $100 Million more to implement, and result in multiple concrete treatment facilities on the waterfront. Given the limited availability of waterfront access for the community, existing greenfield locations that are otherwise undesirable for development were preferred. Additional information on this project is here: https://www.municipalworld.com/feature-story/prince-rupert-wastewater-pilot/