Taxes may seem simple and straightforward, but as far as Area B taxes go, they are commonly misunderstood. The Cowichan Valley Regional District (CVRD) is a complex government structure that arguably does not serve our local needs as well as it could, but I will leave that discussion for another day. I will cover the basics and should you wish more information, I would suggest the CVRD website be your next stop. Your “property taxes” are actually made up of multiple taxes, of which, the Area Directors can only influence (need a majority) the CVRD line item. The other taxes such as Fire Protection (Shawnigan Improvement District), Hospital, Education, Parcel, and Rural Tax are set out and managed by other jurisdictions.
The CVRD provides mandated and community requested services. If you have never been a developer or built a house you may not know this, but the CVRD has many departments including: planning, building inspection, legislative services (create bylaws, runs transparent meetings, etc), engineering services (approves and manages water-systems), finance, emergency services (responsible for 911 towers and response) and Environmental services (creating the plans for the Province, flood plain mapping, water quality testing, water quantity testing, etc.) just to name a few. Many of these services are paid for by everyone in the region. Sub-regional services such as Kerry Park Recreation and South Cowichan Liquid Waste Management are paid for by the Areas that are covered by the services in question. Local services such as Community Parks and the Community Centre are entirely payed for by Area B. Furthermore, you are only taxed for a service if you receive it (e.g. if you are connected to the Beach Estates Sewer.) Many of the regional services we may not actually notice locally, but they are mandated by the Province and must be part of our planning and legislation.
Assessments of a properties value are made by BC Assessment (which is managed provincially) every year and are based on sales in the local area. In Shawnigan Lake (Area B), assessments are generally much higher than anywhere else in the CVRD because we are closer to Victoria (among other things.) Since the average assessed value is higher, we do end up paying a higher percentage for a given service if it is regional or subregional. This is because the allocation of taxes is based on assessed value and are not “flat-rate” (e.g. by population.) Despite this, we still only have one vote at the table (that’s me).
On your property taxes you will also see a separate tax called Rural Tax, which is charged to unincorporated areas. The same rate is charged throughout the Province (with the exception of the Peace River Regional District) to all properties in a given property class. This means exactly what you think it means; every residential property in an unincorporated area pays this tax based on that individual properties assessed value, which means that if the assessed value is 3 times the value of a similar property in say northern BC, then that property pays 3 times the taxes. This Rural Tax is a general tax that goes into the Province’s general revenue. The Province determines how much revenue they need to raise for the year and sets the provincial rate in order to raise that amount of revenue. Because it goes into general revenue, it is impossible to say exactly how it will be allocated, but it does cover things like roads and the RCMP.
So why did our taxes go up so much this year? (1) there was a large increase in assessed values in Area B. In the 2022 tax budget the average home in Area B was $916,164 and the corresponding CVRD portion of the tax would be $1698.57. Area B CVRD Taxes increased on average by 7% but because the increase/total of our assessments were disproportionately higher we pay a larger portion for Regional Items than other areas. We also end up paying a larger portion of the Rural Taxes when compared to other properties in unincorporated areas all over BC! (2) The Provincial Government reduced taxes for forestry lands. In Area B we have lots of Forestry land so that reduction in tax revenue is being made up for by us, the local residents.
I have tried to reduce/limit spending as much as possible during my term, especially when it comes to services that are paid for exclusively by Area B (these have the largest impact.) I have been able to fund many of our local projects with grants and other sources of revenue (like gas taxes, which are federal and can only be spent in a certain way.) As a community we could decide to reduce our local parks budget or other items close to home like the community centre, but this would not be a popular choice, since these are the things that the community values most.
As always I'm available for a conversation, Sierra Acton.
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