North Cowichan Considers Tax Increase to Address Infrastructure Needs

Residents of North Cowichan may soon face a tax increase designed to address the municipality’s aging infrastructure. During a council meeting held on November 19, 2023, municipal staff proposed a one per cent increase to the budget starting in 2026. This additional revenue would be earmarked for asset management, which includes building, maintaining, replacing, and repairing essential public infrastructure such as roads, water pipes, and recreational facilities.

The council opted to consider this tax increase within the budget process for 2027. Currently, North Cowichan is grappling with a significant backlog of maintenance, with an estimated $27.3 million in needed repairs to water and sewer mains alone. Municipal Chief Administrative Officer Ted Swabey has indicated that the total cost for upgrading all servicing systems to accommodate future development is projected to be around $359 million.

A report by Michelle Miller, the manager of asset management for North Cowichan, highlights the importance of tax revenues as a stable funding source for the municipality. The report suggests that, assuming a one per cent tax increase generates approximately $400,000 annually, implementing this increment each year could result in an estimated $57 million dedicated to asset renewal by 2041. Miller emphasized that “gradually allocating resources to asset management into a dedicated reserve fund through a moderate annual tax increase prevents reliance on debt or external funding during urgent situations.”

Councillor Christopher Justice expressed support for building reserves for asset management, suggesting that the process should begin in 2027. He noted that the municipality has already made strides to increase reserves for infrastructure replacement, including raising parcel taxes to support sewer and water systems and establishing a budget line for asset management for facilities. Justice stated, “We do need to address funding gaps, including those related to roads, and a one per cent tax increase starting in 2027 is, in my view, an appropriate approach.”

Councillor Chris Istace advocated for an immediate vote on including the one per cent tax increase for asset management in the 2027 budget process, to avoid further discussions next year. However, Mayor Rob Douglas raised concerns about the uncertainty surrounding the anticipated budget increase for 2027. He noted that the tax increase for 2026 is expected to be at least 9.26 per cent and expressed the need to collaborate with council members at that time to determine the feasibility of the proposed increase.

Swabey mentioned that staff might recommend a three per cent tax increase in 2027 to support asset management initiatives. Istace countered that a one per cent increase is merely a “softball little league cost” and suggested that the council may need to consider a tax increase of up to five per cent specifically for asset management in 2027. “The easy decision for council was for a one per cent tax increase at this time because anything else is irresponsible financially,” he asserted.

As North Cowichan navigates the complexities of funding infrastructure needs, the proposed tax increase remains a pivotal topic for discussion among council members, reflecting the pressing demands of aging public assets and the community’s future development goals.