Does Vancouver need its own auditor general?

As one of the largest cities in B.C., and with yearly revenues of over $1 billion, does Vancouver need a financial watchdog?

Credit: Albert Law

Coun. Colleen Hardwick calls for financial oversight

B.C.’s biggest city is lacking when it comes to independent financial oversight, critics say

The City of Vancouver stands out for many reasons. Its temperate weather. Its staggering natural beauty. Its million-dollar house prices. But one unique quality is a head-scratcher: it’s the only large city in Canada without its own independent financial watchdog to report on the effective and efficient use of municipal funds. If Vancouver is the world-class metropolis it claims, with annual revenue as high as $1.9 billion in recent years, why is its financial accountability so provincial?

That may soon change as city councillors, the public and the provincial government find themselves asking what local accountability should look like for B.C.’s cities and towns. Whether it’s the province’s five-year review of the nascent office of the auditor general for local government, or Vancouver city council approving the first in-depth independent financial assessment in a decade, spending of tax dollars faces scrutiny.

“I’m encouraged that in other cities across Canada there has been a watchdog function built into local government, because we really do need that,” says Vancouver Coun. Colleen Hardwick. “I am concerned that there are insufficient checks and balances.” In mid-December, council passed Hardwick’s motion to appoint an independent Oversight Commission to conduct a baseline review of the city’s finances.

Vancouver’s financial equation has shifted dramatically over the past decade, largely thanks to revenue from real estate developers. From 2009 to 2019, the city’s operating budget swelled from $923 million to $1.5 billion. That 60-percent increase took place when the population was growing by about 1 percent a year.

A large portion of it came from developers paying community amenity contributions (CACs), which the city collects in exchange for rezoning to help build community centres and libraries and improve parks as density increases. (Vancouver also collects development cost levies, a flat fee per square foot on all new developments. These offset additional costs such as engineering infrastructure.)

But as development approvals outstripped Vancouver’s population growth and ran up against local resistance, the question had to be asked: was the City playing Robin Hood by green-lighting luxury condo towers to fill its coffers with developer contributions—or selling out citizens’ concerns to stay in the black?

Over the past several years, CACs have skewed heavily toward a handful of mega-developments. In 2014, two-thirds, or $157 million, came from the rezoning of Oakridge Centre for Westbank Corp. Then there’s the so-called Jenga tower in Coal Harbour, which faced much pushback due to its negative impact on view corridors. As part of their rezoning application, approved by city council last year, Bosa Properties and Kingswood Capital offered some $56 million in CACs.

“In recent years what I’ve noticed is that the City had got a little greedy, and it started looking at the whole development proposition from the point of view of what the community amenity contribution would be,” says Vancouver’s former co-director of planning Larry Beasley, now founding principal of Beasley & Associates, an urban planning and design firm. “When the City is motivated in its zoning by the community amenity contribution that comes with the zoning as a prime motivation, there is a problem.”

City staff look out for the public interest, says Chris Robertson, assistant director of citywide and regional planning. Although the City must respect commercial sensitivities that might stop a developer from making CAC negotiations public, “ultimately we follow provincial guidelines” on CACs, Robertson explains.

Every municipality has its books audited, and the City of Vancouver has its own audit team, but an auditor general’s task goes further. “They’re looking for wider issues about whether there has been gross inefficiency and whether there are better ways of doing things,” says Andrew Sancton, a political science professor and municipal government expert at Western University.

Toronto’s auditor general has uncovered $421 million owed in unpaid fines, suspected rigging of bids for paving contracts and possible fraudulent fire safety inspections by a city contractor, the Toronto Star reports. Since 2013, the office has saved the city more than $200 million, or $8.50 for every dollar in its budget.

In 2012, then-premier Christy Clark’s BC Liberals established an auditor general for local government. Some communities bristled at the thought of the province breathing down their necks, but after a review, the NDP government recently announced it will keep the office.

There’s a case to be made that the local government auditor general can add value at the civic level. Whether it should be a provincial agency, or municipalities should foot the bill by having their own auditor general, is another question.

“I believe the local government auditor general has had a pretty good chance to lift up that rock and see what’s crawling underneath it, and I think generally they have found that things are pretty good,” says MLA and one-time Vancouver mayor Sam Sullivan. If the province pays, all the better for municipalities, Sullivan argues.

To former Vancouver planner Beasley, the province imposing an auditor general on local governments seems rich. In his experience, municipalities are much more transparent, and they’ve balanced their budgets as transfer payments from senior levels of government dwindled. “It’s not a bad idea for local governments to implement their own audit and ombudspeople functionalities,” Beasley says. “That would be a benefit to all citizens.”