Lower Mainland mayors voice concern over proposed transit levy

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Lower Mainland mayors are expressing concern about the B.C. TransLink Minister's proposal to create a new provincial development tax that would be applied to construction around transit lines to help finance new subways, light lines or even rapid buses.

They say Minister Peter Fassbender's idea for a "transit-supporting levy," which he started describing publicly for the first time last week, is one worth discussing, but comes with many challenges.

The biggest one is that the mayors will resist any attempt from the province to take away a source of money for transit funding that the mayors see as theirs.

"Our concern, if they put in another tax, is that they would put that as their part of the funding when we've clearly identified that as revenue for our share [of transit funding]," said Greg Moore, the chair of Metro Vancouver and mayor of Port Coquitlam.

Only three months ago, the mayors joined together to ask the province to create a new transit-supporting tax for them, a development cost charge on all new construction that would be dedicated strictly for transit.

The TransLink mayors' council estimated that could bring in $50-million a year, at an approximate cost of $5,800 for each new unit built.

But the province has to pass legislation to permit mayors to collect that new kind of development charge. Currently, cities only have the right to impose development charges on new construction to pay for road, sewer and water.

Mr. Fassbender, talking about the levy last week, said his intention wasn't to raid the cities' piggy bank, but to have an open conversation about other kinds of "land-value capture." That's the term used when governments take a portion of the profit that a private owner gets when the land gains value through some action of government, such as a rezoning or a new amenity that makes the area more attractive.

However, Mr. Moore said the mayors don't see that revenue source as something to be shared with the province, when cities do the work of rezoning, and work with communities to add density.

In Surrey, Mayor Linda Hepner worried that any new tax on construction would work against everything her city is doing to entice developers to build around the current transit line.

"It's easy to [capture that land-value] lift in Vancouver. That is not so simple when you're building a city and trying to attract investment," said Ms. Hepner, whose council has put a lot of effort and money over the past decade into trying to create a new downtown around the Surrey Central and Gateway SkyTrain stations. "I'm out there encouraging investment along transit, so we need to make sure that number would work."

Unlike some other cities in the region, Surrey doesn't charge developers who obtain rezonings any extra charges for community amenities.

Vancouver collected $105-million in those kinds of charges in 2015. Richmond also receives contributions from developers for new community benefits if they get a density bonus on a proposed building.

Richmond Mayor Malcolm Brodie said he is worried the province is kicking off this kind of complex discussion at a time when local cities need some clear commitments on other issues.

Those include what the province will contribute to overall transit improvements when the federal government announces its program for a second phase of major transit funding some time in the next month.

The other grey area that mayors need resolved is whether the province will back its plan to move to a system of raising revenue for transit by charging drivers fees based on where and how far they drive on the Lower Mainland road network.

"What we need is some confirmation of the funding that is required for Phase 2," Mr. Brodie said. "And we need a commitment of support for mobility pricing."

Instead, he said, what the mayors are hearing is "we have to have more study on this."

In Vancouver, Mayor Gregor Robertson was on vacation in Whistler and couldn't be reached for a response.

But Councillor Geoff Meggs, who has attended one of the discussions Mr. Fassbender organized to broach the idea, also said that the province needs to focus on coming up with a clear answer on what financial support it will provide when the federal money is announced.

"The province keeps looking for ways to force the money out of the municipal level. But there is not a silver bullet to lift the burden off of regional taxpayers."