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General News · 5th December 2023
Maureen Bader
Most communities in Canada face a housing shortage. The question is: what to do about it? Should we empower government to throw more tax dollars at the problem or break down the barriers created by government that prevent more affordable housing construction? This is the question facing residents of the Strathcona Regional District (SRD) today, and we have an opportunity to make a difference by voting in the alternative approval process (AAP) at the SRD.

What’s going on? Well, the SRD board wants to set up a couple of new programs to throw money at the housing shortage in the area. One, Bylaw 512, creates a new housing bureaucracy at the cost – to start – of $750,000 per year. This bureaucracy would do a couple of things, such as provide housing directly, figure out ways to access more federal tax dollars to hand out for construction, and give money away to third parties such as housing societies.

In Bylaw 515, the SRD wants to borrow up to $10 million to spend on housing projects.

What could possibly go wrong?

Well, the recent conflict of interest scandal at BC Housing is one example of the problems created by government giveaway programs. BC Housing is a provincial crown corporation tasked with handing out $2.1 billion per year for subsided housing. In 2022, the CEO of BC Housing, Shayne Ramsay resigned when an auditor’s report expressed concerns about a conflict of interest between Ramsay and BC Housing’s largest funding recipient, Atira Women’s Resource Society. The auditors found examples where Ramsay pressured staff to benefit Atira – it received about $90 million between 2020 and 2023 with very little oversight. Why might Ramsay do that? Well, the CEO of Atira, Janice Abbott, is Ramsay’s wife.

Favoritism happens at every level of government. For example, a chair of a federal foundation empowered to give away millions of tax dollars to “green” tech projects, Annette Verschuren, gave $217,000 to her own firm. Human nature is what it is.

But could it get any worse? Yes it could.

The SRD board wants to borrow $10 million to fund the housing giveaway bonanza. When the original borrowing plan was at a ‘modest’ $6 million, the estimated annual interest charge would be $373,000 per year. We weren’t given an update when the board, putting on its Santa Claus hat, raised that to $10 million.

Is local government indebtedness a good idea for local taxpayers? Well, in 2020, SRD taxpayers funded debt interest cost to the tune of about $500,000 per year. By 2025, according to the SRD’s 2023-2027 Financial Plan, debt interest cost will rise to $3.6 million. If Bylaw 515 passes, that would rise to almost $4 million per year. Of course, that’s at current interest rates. If interest rates skyrocket to rein in inflation like they did in the 1980’s when the US prime rate went to 20.5 percent, that amount could be significantly higher.

We already have an example of how costs can escalate. The largest single debt interest charge forecast in the current budget plan for 2025 is for the Strathcona Gardens, at about $2.3 million. But in the previous 2021-25 budget plan, the Garden’s interest charge was estimated at $844,253 in 2025. The burden of government is like a fungus – it just grows and grows.

The SRD collected about $15.6 million in tax revenue in fiscal 2023. If that stays the same in 2025, debt interest charges alone will consume about one-quarter of the budget. Taxpayers could be paying millions to the province’s Municipal Financing Authority instead of building homes.

Instead of leaving our children and grandchildren with a legacy of debt and higher taxes, politicians should work to reduce regulations that keep the cost of construction high. Another area for reform is zoning. For example, the Town of Squamish recently passed a zoning bylaw change allowing for buildings that are six storeys or less. This means faster construction of more units to increase the housing supply while lowering costs.

Government solutions created to solve problems created by government result in bigger government and more problems. The SRD’s solution to the housing shortage is unlikely to solve the housing shortage and could create conflicts of interest and worse, a debt spiral. Funding the debt means less spending on core infrastructure and tax hikes that squeeze ordinary people and could force some from their homes.

You have the ability to stop this impending debacle. You can make your views known by participating in the AAP process. Go to the SRD offices at 990 Cedar St. in Campbell River or download this form and mail it in.