Municipalities have been making headlines with the rising costs of development and permit fees.
Many local governments calculate their fees on the “value of construction.”
However, the BC govt says fees must be connected to the cost of providing a service and should be charged under the common law principle of reciprocity (eg. fair market fee for reciprocal service).
Municipalities operating under the “value of construction” model appear to be charging a tax, not a fee for service as required by the province.
Saanich’s calculation of construction value includes contractor’s profit, workers’ compensation, liability insurance, employment insurance and other factors having no relationship to the cost of delivering inspection services.
This is similar to BC’s Property Transfer Tax where the tax is based on market value with no relationship to the cost of doing the property transfer.
In addition, as material costs increase, such as lumber due to BC wildfires, municipalities generate more revenue from fees, contributing to the rising price of housing.
Yet municipal costs to inspect the home remain the same.
It’s another example of homebuyers being used for govt revenue, rather than paying an appropriate fee for service.
The calculation of permit fees must change from market value to cost of inspections, trips to sites, etc.
This is in the interests of housing affordability and complying with the intent of provincial regulations.