Local government finance

All local governments in B.C. operate within a legislative framework that governs their administration and finances including financial planning, reporting, revenues (taxes and fees), liabilities, capital financing, development financing, and property acquisition and disposition.

The Ministry of Municipal Affairs supports local governments with their legislated financial responsibilities in order to promote the long-term sustainability of the local government system, this includes:

  • Providing advice on all aspects of local government finance
  • Promoting sound financial management in local government
  • Providing a complete, reliable and consistent source of data on local governments in B.C.
  • Promoting good financial and reporting practices
  • Reviewing and approving long-term borrowing and development cost charge bylaws

Financial reporting

The purpose of financial reporting is to ensure the transparency and accountability of the local government system.

Through the annual budgeting process, local governments are accountable to their citizens and businesses for how they plan to provide necessary public services and projects in a cost-effective manner, and how they intend to raise the funds to pay for those services and projects. The budgeting process helps local governments in determining their tax rates for the year.

Requisition and taxation

Property taxation is the main source of revenue for local governments. This revenue helps defray the costs of local government services such as general administration, planning, water, sewer, transportation, drainage, garbage collection, libraries, protective services, and parks & recreation.

Regional districts do not have the authority to directly tax property owners, instead they requisition their annual tax requirements through participating municipalities and the Provincial Surveyor of Taxes, who collected taxes on behalf of regional districts.

Fees and charges

Local governments may impose fees and charges for the provision of services, use of property, exercise of regulatory authority, or for obtaining copies of local government records. Fees and charges are established by bylaw.

Investment of local government funds​

Cash resources (reserves, surplus and current funds) are essential to maintain municipal and regional district operations. Municipalities and regional districts must balance investment risk against potential investment returns within the requirements of the Community Charter, while still meeting the daily cash flow demands of the local government.

Borrowing and liabilities

Under provincial statute, local governments may incur various forms of liabilities. These liabilities may vary depending on the type of liability (borrowing versus leasing), purpose of liability (capital versus operational), the duration of liability (current-year versus short-term versus long-term), and source of the funds (external lender versus internal funds).

Development financing

Growth and new development create demand from local governments for new or expanded infrastructure and services. To address this demand, local governments have a range of finance tools available to acquire and construct new capital assets, these include development cost charges (DCCs), latecomer agreements, parkland acquisition fees, and development works agreements.

Local government latecomer agreements

Latecomer agreements are development finance agreements between municipalities or regional districts and land or property developers. These agreements specify off-site infrastructure necessary for development to proceed.

Local government parkland acquisition fees​

In addition to revenue from other charges and property taxation, local governments can finance parkland acquisition using: development cost charges; contribution, or dedication, of parkland; and cash-in-lieu upon subdivision. Funds from development cost charges and cash-in-lieu must be deposited to reserve funds for the purpose of acquisition of parkland.​

Municipal development works agreements​​

A development works agreement is an agreement, made by bylaw, between a municipality and a developer setting out which of them will provide, construct, alter or expand infrastructure related to a development.

Local government statistics

The Ministry of Municipal Affairs collects financial data from local governments in B.C. through annual financial reporting. The data is reviewed, compiled and made available to the public.

All local governments in B.C. must submit financial statements and tax rate information by May 15 each year.

Grants and transfers

Local governments may receive funding from several sources, including the B.C. government and the Government of Canada.

Asset acquisition and disposal

Municipalities and regional districts have the authority to both acquire and dispose of property, including land, buildings, infrastructure, vehicles, and equipment. In some cases, this broad authority is subject to specific legislative restrictions.

Improvement district finance

Improvement district boards of trustees are responsible for ensuring that their improvement districts meet the financial obligations necessary to provide service to property owners.

The board is authorized to levy taxes, tolls and other charges, to invest money, to borrow and to expend money.