A new provincial government report confirms the Canadian Taxpayers Federation’s (CTF) long-standing suspicion: municipal governments are overpaying their staff compared to both the province and the private sector. The 88-page report was prepared by Ernst & Young as part of the B.C. Government’s core review process.

The report’s major finding was especially welcomed by the CTF: “The [provincial] government should do what is necessary to bring municipal government compensation into alignment over time, including using financial levers if necessary” (p. 4).

“Most municipal councils are too scattered in their philosophy and prone to pressure by unions to hold the line on spending,” said CTF B.C. Director Jordan Bateman. “With as much as two-thirds of a city’s operating budget going to employee wages and benefits (p. 15), it’s no wonder property taxes have skyrocketed in so many communities across B.C.”

It’s not just managers who have dined out on property taxpayers – municipal union employees received 38 per cent hikes in pay from 2001 to 2012, twice the 19 per cent increase paid to B.C.’s core provincial employees. Inflation during the same period was 23 per cent, 15 points lower than the municipal union pay increase (p. 3).

Other report findings:

• The City of Vancouver pays the highest salaries to “strategic leadership” managers of any government or Crown corporation in B.C. – even higher than UBC and BC Hydro (p. 11).
• Municipalities are overpaying the provincial government for technical expertise (p. 13).
• Cities have a higher percentage of employees making $75,000 a year or more than in the province (p. 14).
• Some Crown Corporation boards “may not be adequately considering the interests of their shareholders [taxpayers] in setting compensation” (p. 16).
• Of 10 local governments surveyed, only one reported publicly on how they set compensation (p. 17).
• The municipal approach to collective bargaining is “highly fragmented and inefficient” (p. 20).

“Every municipal election candidate should read this report and articulate to voters how they would better manage labour costs,” said Bateman. “Instead of the usual platitudes and spending plans, let’s see some platforms with real ideas on how to save money for taxpayers.”

source: Canadian Taxpayers Federation