Budget Thoughts
Esquimalt is about to start its annual budget process. Council will see staff’s first draft at the Council meeting on Monday, January 12. Esquimalt traditionally begins its budget process a bit later than many other municipalities, largely because we receive a substantial portion of our revenue from the federal government through the Payment-in-Lieu-of-Taxes (PILT) program related to CFB Esquimalt.
Over the past six months, staff have also been presenting information to Council about various Township departments, and a consistent theme has emerged: several teams are feeling stretched, with heavier workloads and lower staffing ratios than comparable departments in nearby municipalities. This pressure appears to be felt most acutely in Development Services and Engineering / Public Works.
And yet, when you look at the comparison tables published each year, Esquimalt’s total tax rates sit more or less in the middle of the pack — not the lowest, but far from the highest.
So what gives? What are we spending money on that others aren’t? What historical or recent decisions have shaped the fiscal reality we’re dealing with today? And why, given that we receive substantial PILT contributions from the federal government (unlike other CRD municipalities), do our taxes still feel comparable — or even high — to residents?
I did this analysis primarily for myself, but I figured residents might be interested as well. First and foremost, this work is entirely my own and does not reflect the views of Council, the Township, or other councillors. It’s based on publicly available data, pulled from a number of different sources — and I’ve learned firsthand how difficult this kind of comparison work can be. Municipalities report things slightly differently, categorize expenses in different ways, and sometimes report net versus gross figures inconsistently.
I’m certain I’ve made errors along the way, and any mistakes are entirely mine. That said, I’m reasonably confident in the directional conclusions and broader themes that emerge from the data.
Overall Tax Levels
One important starting point is that Esquimalt includes several services within property taxes that other municipalities fund through separate (and mandatory) user fees — things like sewer, garbage collection, and stormwater utilities. In Esquimalt, property taxes pay for all of these. In many other CRD municipalities, residents receive separate bills.
The main exception is water, which — for historical reasons — is provided by the City of Victoria.
The graph below shows total property taxes plus mandatory fees for a representative home across the CRD. Esquimalt sits somewhat above the regional average, but not dramatically so.
Of the roughly $6,022 shown for Esquimalt, only $3,675 represents municipal taxes. The remainder goes to regional services (CRD), provincial school taxes, BC Assessment, and other non-municipal items. Of that $3,675 in municipal taxes, the 2025 budget allocates spending as follows:
It’s also worth noting that the capital program — which often attracts the most public attention (bike lanes, the public safety building, road renewal, sidewalk improvements) — is funded entirely through transfers to reserves (about 9%) and debt servicing (about 4%, primarily for the Public Safety Building). Together, this represents roughly $6.8 million. I’ll dig more deeply into capital spending in a future post.
Our revenue sources for 2025 are shown below:
So how do we compare?
It turns out that comparing municipal budgets is surprisingly difficult. There are subtle but important differences in how expenditures are categorized, whether figures are reported gross or net, and how services are structured. For example, West Shore and Peninsula municipalities often operate shared recreation facilities through different legal or financial arrangements, which complicates apples-to-apples comparisons.
Again, the analysis below is my own, based on publicly available data, and any errors are entirely mine. I’ve used 2023 figures, as these are the most recent standardized data available through the Province’s municipal statistics framework. I’ve also reviewed individual municipalities’ 2023 Financial Plans to try to resolve some net-versus-gross reporting differences.
I chose to compare Esquimalt with five municipalities: Central Saanich, Colwood, Oak Bay, Saanich, and Victoria. The first three are similar in population size. Colwood has experienced development patterns comparable to Esquimalt over the past decade. Saanich and Victoria, while much larger, provide a useful reference point for potential efficiencies that come with scale.
For our three largest areas of spending, the comparison in 2023 looks like this:
What’s interesting is that when you look at the difference between the average value for municipality, and multiply it by Esquimalt’s population, the increased cost of three departments above the average largely line up with what we receive in PILT.
As many residents will already know, Esquimalt spends significantly more on policing than most neighbouring municipalities — second only to Victoria. This is not a new issue. Esquimalt is the only municipality contributing toward the cost of policing downtown Victoria, and this has been a challenge for successive Councils over the past 20+ years.
Colwood’s lower policing costs reflect the reality that RCMP policing is considerably less expensive for smaller communities than maintaining a municipal force.
What stood out to me, however, is that Esquimalt also spends considerably more per capita on fire services. My understanding is that this reflects our decision — made decades ago — to operate a fully career, full-service fire department with 100% full-time staffing. In contrast, municipalities like Colwood and Central Saanich use hybrid models that combine full-time and on-call firefighters.
Given provincial requirements, the BC Fire Act, and collective agreements, this isn’t a model that can easily be unwound — nor, in my view, is it necessarily something we’d want to undo. That said, increasing provincial requirements around staffing ratios, inspections, and reporting will continue to put upward pressure on Esquimalt’s budget.
Recreation is another interesting case. The figures above represent net costs — that is, the portion funded by property taxes after user fees and other revenues are accounted for. Esquimalt clearly spends more per capita on recreation than comparable municipalities, but we also operate extensive facilities with long opening hours and strong programming.
An open question for me is whether we should be looking more closely at cost recovery — particularly given that a significant number of users come from Victoria and elsewhere. This is not a simple issue. Raising fees risks discouraging use and, paradoxically, reducing revenue, since the majority of recreation costs are fixed. Still, it’s a conversation I think is worth having, and one I’ve been raising at Council.
Other departments — particularly Development Services and Engineering / Public Works — are much harder to compare directly. Reporting practices vary widely, especially when it comes to building permit fees, development-related charges, and work that is ultimately reimbursed by developers.
Because personnel costs make up the bulk of expenses in these departments, I chose to look instead at staffing levels:
To me, this reinforces what we’ve been hearing from staff: Esquimalt appears to operate relatively efficiently in Corporate Services, Planning, and Engineering / Public Works compared to other municipalities. There is some ambiguity here, particularly where municipalities contract work out differently, and where infrastructure age plays a role. Communities like Colwood and Central Saanich are earlier in their infrastructure lifecycle, while places like Oak Bay face more extensive renewal and replacement needs.
For both planning/development and engineering/public works, I think it’s important to look at the revenue side as well. Are our development-related fees comparable to those in other municipalities? Are they covering an appropriate share of the costs associated with reviewing and approving new development?
This is separate from earlier Council decisions not to pursue Development Cost Charges and to be relatively restrained in using Community Amenity Contributions. I’ve been pushing to reopen that discussion, and my understanding is that Council will at least have an initial conversation on this in the coming weeks.
Where this leaves us
As we head into budget deliberations, there are no easy answers. Based on what we’ve seen in other municipalities this fall, I expect staff’s first draft budget — which we’ll see next week — to propose a significant increase.
Many of the underlying drivers are largely outside Council’s control: police wages, provincially mandated requirements, and rising construction and operating costs, to name just a few. That doesn’t mean Council has no choices, but it does mean the room to manoeuvre is often narrower than it appears from the outside.
As always, I’m very interested in hearing residents’ perspectives. The best way to reach me is by email at duncan.cavens@esquimalt.ca. I’m also happy to meet with anyone, anywhere — just reach out and we’ll find a time.