Each year cities determine the cost of municipal services (police, fire, parks, roads, etc.). Usually, it’s a few percentage points higher than the previous year’s budget, accounting for cost increases such as inflation, contractual obligations, insurance, fuel, increased service demands and increased regulation or downloading responsibilities from senior governments. City Council review and debate every line item trying to keep taxes as low as possible and still maintain services.

Council also has to factor in the cost to maintain and replace our city's aging infrastructure. While aging infrastructure is an issue for every municipality, our population history, the city's geographic expansion, and the infrastructure that came with physical growth created conditions that are unique to Prince George. The average installation date for the infrastructure we currently use every day is 1982. This means city infrastructure is, on average, more than 40 years old. It's important that we fund the replacement and maintenance of our aging infrastructure before it fails and causes potential service outages, sinkholes, or other hazards.

Only 70% of taxes billed to property owners are for services provided by the City of Prince George. The City collects the remaining 30% on behalf of other authorities including:

• Provincial government (for school taxes)
• Fraser-Fort George Regional Hospital
• Regional District of Fraser-Fort George
• Regional 911 service
• BC Assessment
• Municipal Finance Authority

2024 general operating expenses in millions are:

• Protective services: $61.3
• Transportation: $25.8
• Recreation and culture: $24.7
• General government: $22.7
• Debt: $12.9
• Public transit: $7.8
• Misc. fiscal: $6.1
• Environment and public health: $3.6
• Planning and development: $2.2

Services such as water, sanitary sewer, and residential garbage collection are billed separately from property taxes. User fees (collected through utility bills) support the operating costs of these services as well as the replacement of aging infrastructure.

A property’s assessed value determines its share of taxes. The assessments provided by BC Assessment each January indicate how much Prince George property values increased or decreased from the year before. Municipalities are not involved in determining assessments.

Once BC Assessment finalizes those values, the city’s finance department can calculate the tax rate needed to raise exactly the specified revenue needed for the budget. The tax rate (often called the “mill rate"), when multiplied by the total value of all the property in that class across the city, will equal the total revenue needed to be collected from that class of property (residential, commercial, industrial, etc.).

Properties whose value has increased or decreased more than other typical properties of the same type will experience a tax rate that differs from the average. For example, if a city institutes a 3% tax increase; and if your property value increases by the same as the average, then you'll face the 3% increase on your tax bill. Most properties will face assessment increases either higher or lower than the average. If an assessment increase is LESS than average your taxes would likely go down. And if your property value went up by MORE than the average, your taxes (or your “share” of the city’s costs) would likely increase.

Increases in property values don’t result in an increase in revenue for the city. Property values don’t tell cities how much tax they will bring in, they only determine how the tax bill will be split up among residents.

One of the more widespread claims floating around on social media is that Prince George residents pay more in property taxes compared to other B.C. municipalities on houses of comparable value.

But that's not true.

The size, location, and type of home purchasable in Prince George is different from what that same amount of money can buy in Kamloops, Kelowna, and Nanaimo. The best way to compare property tax rates in our city to those in other cities is to first find out what the average home price is in each community and then compare taxes on those homes.

For example, if you take a $500,000 home in Prince George and set it down in Kelowna, the value of that home would likely be reassessed immediately to $1,000,000. However, the 2021 residential tax rate in Kelowna is exactly half that of Prince George. As a result, this home would pay the same amount of tax in either city using the assessed values.

The reverse is true as well. In 2020, the cheapest houses were in Cache Creek where they averaged $150,000. Property owners still paid $2,061 in taxes, which is comparable to the provincial average.

Here's the bottom line

The tax rate per $1,000 of assessed value is just as important as the individual property value. Comparing tax rates between cities is not a fair comparison without also considering the average home price.

Comparative home values and municipal taxes