An aerial view of a destroyed section of Lytton, B.C in early June, 2022.Melissa Tait/The Globe and Mail
The village of Lytton, in the interior of British Columbia, is struggling to get back on its feet after being levelled by a forest fire five years ago. The population is down by two-thirds. Only one business has reopened. There are big plans to rebuild, though, buttressed by promises for more than $50-million in infrastructure funded by the provincial and federal governments.
The devastated community needs support. But this zeal to do something for Lytton, a laudable goal, could eventually spell doom for the community.
Some locals, including a sitting councillor and the former mayor, are raising the alarm about ongoing costs to the community to maintain and operate infrastructure such as a community centre and possibly a pool. The village, which is raising its property tax rate 14 per cent this year, admits it does not yet know the scale of bills it will be required to cover.
Even now, there are too few people paying property tax to fund Lytton’s current budget. Putting more demands on the tax base in the hopes that the village will grow is a bold bet. It could work, but it might not.
Instead it could lead to a fiscal death spiral, in which rising taxes discourage people moving to Lytton and drive away those who live there, forcing ever-greater increases.
Lytton, B.C., residents fear financial ruin from wildfire rebuilding costs
In the worst-case scenario, a financial crisis could destroy the village a second time.
This is a situation that no one would want. However, with climate change threatening to bring more fires, and more destructive ones, how and whether to rebuild burned communities are increasingly pressing questions for Canada.
The hard truth is that it’s not yet clear whether Lytton will make it.
A recent report from the provincial auditor-general highlighted how British Columbia has expected recovery to be led by the village itself, which “lacked staff and funds to do this”
Most residents who lost their homes in the blaze were uninsured or underinsured, according to the auditor. The discovery of Indigenous artifacts during fire clean-up was an added complication that has delayed rebuilding.
And Lytton was losing momentum already before the fire. The opening of the Coquihalla Highway in 1986 diverted traffic. Then the sawmill, a major employer, closed in 2007. The population dwindled 34 per cent between the 2001 census and the count in 2021, which tallied 210 residents. There are now an estimated 75.
All of which makes it hard to understand why the federal government promised $23-million for a fire hall and emergency operations centre and $26-million for a community centre, with a six-lane pool proposed for alongside.
B.C. was unprepared to help Lytton rebuild after wildfire, A-G report says
The community centre raises particularly troubling questions. The plan is that it will cover its costs through revenue such as room rentals. That would be a nice result, though the promise that something will pay for itself is one that municipal politicians nationwide have come to doubt. If that backfires, the people of Lytton will inevitably be on the hook.
The former mayor of Lytton, Jan Polderman, told The Canadian Press that she wanted to see plans for how the infrastructure will be managed, a reasonable request. The village acknowledged to The Globe and Mail that it is still working out the costs to run the building. Its revenue potential is also unknown.
In the face of such uncertainty, the belief that the community centre will be cost-neutral is more an act of faith than a reasoned analysis.
It is easy to understand why the village accepted funding from higher levels of government. More than 90 per cent of the buildings in Lytton were destroyed in the 2021 fire and the village’s tiny tax base has no realistic way of paying to build substantial public infrastructure.
So an offer from the federal government to cover almost all of the cost of the community centre – the village will pay only $400,000 – may have seemed too good to refuse. But if it saddles Lytton with long-term costs the deal may prove too good to be true.
It would be great if Lytton is reborn as a vibrant community that brings back residents, attracts newcomers and creates a solid tax base for decades to come. It would be ideal if the new infrastructure manages to pay for itself. It would be unwise, though, to gamble on these scenarios coming true.
The best of intentions in Lytton may turn into kindling for a new fire, a slow-burning financial one in the years to come.