The uproar on coffee row over a proposed municipal reconciliation tax – the latest brainchild of city council in the last months of its mandate – is understandable.
Senior governments, also funded by our tax dollars, are already meeting reconciliation obligations to First Nations. If approved in the supplemental budget, the proposed reconciliation tax would signal a major change in tax policy in Victoria and the greatest change in municipal taxation in decades.
Any grant that’s funded by taxes must receive broad community discussion and support through a referendum during the fall municipal election. While characterized by the Victoria council as a grant, in fact what is proposed is a commitment of tax revenue for a specific purpose in perpetuity. Grants, on the other hand, require annual application to council.
The current tax proposal has 15 per cent of the new assessment revenue every year go to two sovereign nations, the Songhees and Esquimalt First Nations. It dramatically compounds, with 15 per cent of the new assessed revenue annually added to the amount transferred the previous year.
An analysis provided by the city of how the grant would grow at 15 per cent shows that if it had been created in 2002, the amount transferred would grow from $161,799 in 2002 to nearly $5 million in 2021. Over those 20 years, the city would have transferred a total of $40.73 million while bringing in $30.65 million in new assessed revenue, according to the city.
If after a few years effectively all of that money - and then some - is going to two sovereign First Nations then those funds will have to be replaced. Will those funds come from general revenue or services cuts or raising taxes?
In the past, council has allocated new assessed revenue to reducing annual tax increases, increasing capital investment, increasing funding to existing or creating city services, and creating new grants. So, where does that revenue come from now?
Our community is now facing very serious issues such as public safety, homelessness, a housing crisis, an opioid crisis, deteriorating infrastructure, rejuvenating the local economy, all during a pandemic. Ask yourself how successful council has been addressing those issues - rather than going off on another tangent - and if there are sufficient resources.
If an issue is controversial, requires a significant contribution of tax dollars, or is significant in scale or impact on the community, local governments should go to referendum, according to the province.
Stan Bartlett, vice-chair
Grumpy Taxpayer$ of Greater Victoria