Whereas local governments across British Columbia face challenges in securing stable funding for essential services; And whereas a consistent and reliable source of funding is crucial for the effective functioning of local governments; And whereas alternative funding mechanisms, such as a municipal sales tax or alternative tax be directly allocated to BC local governments, can contribute to financial stability and local autonomy: Therefore be it resolved that UBCM advocate to the Province for the exploration and implementation of alternative funding options, including, for example, a municipal sales tax, to ensure stable and predictable funding for local governments in British Columbia, with a specific focus on directing funds directly for local government budgeting; And be it further resolved that UBCM engage in discussions with relevant provincial authorities to develop and implement a sustainable funding model that addresses the unique needs and challenges faced by local governments, promoting financial resilience and supporting the delivery of essential services.
Ministry of Finance The Province understands the challenges of securing stable, sufficient funding for essential services delivered by local governments. In this time of economic uncertainty, working together across levels of government to build a strong, resilient BC economy is a high priority for this government. The Province continues to work with UBCM under the Memorandum of Understanding MOU signed in 2022 to review the local government finance system, understand the underlying factors and key cost drivers that are creating challenges, and seek solutions that present mutual benefit. The staff-level Working Group for this MOU is committed and engaged in working together with UBCM to develop approaches that increase local government financial resiliency. Sales taxes are most effective when they have a broad base so they can apply to more goods at a lower rate. A municipal sales tax is not currently being considered, as it would create an unequal playing field across municipalities that implemented it differently, as well as create an additional burden for governments and businesses to collect, remit, and administer. Taxpayers can also avoid regionally-imposed sales taxes, diverting spending to lower- or no-tax jurisdictions. Sales taxes are generally considered regressive, as people with lower incomes end up spending a greater proportion of their resources on taxes compared with people who have higher incomes.