The pressure to maintain city services in Kelowna without dramatically hiking property taxes has pushed local officials toward a potentially controversial solution. City staff are now examining a tiered pricing model that would charge residents based on income levels for accessing municipal services.
I spent yesterday afternoon at Kelowna City Hall, where a room full of concerned citizens watched Finance Director Doug Smith present what he called “an equity-focused funding approach” to the council’s budget committee. The model would create three payment categories for everything from recreation facility passes to building permits.
“We’re facing difficult choices between raising property taxes across the board or finding ways to maintain service levels through more targeted pricing,” Smith explained, showing charts of projected revenue shortfalls approaching $12 million by 2026.
The proposal comes as Kelowna faces both explosive growth and increasing costs. Census data shows the city grew by nearly 14% between 2016 and 2021, making it one of Canada’s fastest-expanding metropolitan areas. This population surge has strained infrastructure while the city simultaneously grapples with inflation in construction and operational costs.
Councillor Ron Cannan, who initially requested the staff investigation, told me after the meeting that the approach aims to protect lower-income residents from service cuts. “We’re seeing communities across B.C. having to choose between cutting services or imposing double-digit tax increases. Neither option works for Kelowna families already struggling with affordability.”
The tiered model would establish three payment categories: subsidized rates for households making under $70,000 annually, standard rates for those earning between $70,000 and $150,000, and premium rates for households above $150,000. The system would apply to discretionary services like pool passes and ice rink bookings initially, potentially expanding to other municipal services later.
At the Parkinson Recreation Centre yesterday, I spoke with Marianne Chen, a single mother of two, who cautiously supported the concept. “If it means my kids can still afford swimming lessons while someone with more means pays a bit more, that seems fair,” she said while watching her children’s lesson. “But how would they verify income without making people feel stigmatized?”
That implementation question remains unanswered. The staff report acknowledged significant administrative challenges, including privacy concerns and verification processes. Other communities have tried similar approaches with mixed results. Surrey introduced income-verified recreation passes in 2019 but scaled back the program after administrative costs nearly erased the benefits.
Business leaders have expressed concern about the potential impact. “Adding another layer of bureaucracy to city processes could further slow development and add costs,” said Nikki Csek, Kelowna Chamber of Commerce President, during the public comment period. “We need to ensure this doesn’t create barriers to the housing and commercial growth our city needs.”
Mayor Tom Dyas emphasized that no decisions have been made. “We’ve asked staff to investigate options. This conversation is about finding sustainable approaches to city services while recognizing the different financial realities our residents face.”
The timing coincides with provincial discussions about municipal funding models. The Union of BC Municipalities has been advocating for broader revenue tools beyond property taxes, which currently fund roughly 60% of city operations across the province.
Public consultations on the tiered pricing proposal will begin next month, with community workshops scheduled at neighborhood centers throughout January. Staff will present a refined proposal with financial projections by March, ahead of the 2025 budget planning cycle.
While some residents applaud the concept’s progressive approach, others worry about practical implementation. Former city councillor Andre Blanleil expressed skepticism during the meeting. “The administrative overhead could eat any savings. And do we really want city staff determining who qualifies for what tier? That feels intrusive.”
The proposal raises fundamental questions about municipal service delivery and fairness. Should access to public services be universal regardless of income, or should financial capacity determine contribution levels? The city has launched an online survey through its Get Involved platform, seeking public input on these philosophical questions.
Meanwhile, across the Okanagan, Vernon and Penticton are watching Kelowna’s exploration with interest. Both cities face similar financial pressures but have so far relied on across-the-board fee increases rather than tiered systems.
For Daniel Lestage, a retired accountant who attended yesterday’s presentation, the approach feels inevitable. “Property taxes can only go so high before they create real hardship. If a tiered system helps maintain services while recognizing different abilities to pay, it’s worth exploring despite the complications.”
As Kelowna continues to grow, finding equitable ways to fund city services remains a pressing challenge. Whether tiered pricing represents a pragmatic solution or an administrative nightmare will likely depend on implementation details still to be determined.
