The provincial government is moving to amend the BC Assessment Act to allow them to continue qualifying properties based on their current use rather than their highest and best use.
There is no question that assessment, mill rates and tax rolls has the ability to make eyes roll, glaze over and to put you to sleep. But, property assessments have a tremendous impact on all types of zones.
In this case the province is looking at amending industrial land, whether you own industrial, commercial or residential, land assessment is critically important to how much you pay in property tax each year.
I have heard from residents and business owners that they are very unhappy with rapidly increasing assessments and the province clearly needs to get a handle on this from an affordability perspective.
It is my understanding that this is just the first step in a comprehensive property assessment review in British Columbia.
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I’m pleased to rise today and speak to Bill 42, the Assessment Amendment Act. This bill is designed to stop major industrial sites from facing unreasonable assessment increases to their tax bill when the local government changes its official community plan and designates a property for a different use in the future.
Properties are assessed for their highest and best use. Without this amendment, the new designation may result in an industrial operator operating under the previous use. They could face an enormous increase in their taxes based on the change in the assessed value. They might find it more economical, for instance, to shut down their operations, eliminating a number of jobs and the important municipal tax base at the same time. The bill before us is designed to prevent that from happening.
Planning is critical
I support the government taking an active interest in ensuring that an industry or a major employer is not forced to shut down due to a bureaucratic technicality. But as a former municipal councillor, I’m aware of the official community planning process and the great care that locally elected officials need to employ when planning for the future. The decisions that they make have critical impacts on the current operation of their community. But they also have dramatic impacts on the valuations of the land, both now and in the future. Frankly, I have difficulty when this bill is placed in the larger context.
This year I’ve heard from several businesses in Saanich North and the Islands about unfairness and how they’ve been heavily impacted by B.C. Assessment and other government agencies and how it’s having an effect on their competitiveness and their bottom line. Take, for example, the major employers, some of the biggest in the capital region, that provide life-sustaining jobs for our constituents, quality-of-life-sustaining taxpayers for the municipal governments that we represent — the employers that are located on the Victoria Airport Authority land.
In January of this year, their overall assessment had jumped 21 percent. Their land value increased by 10 percent and their building value by 40 percent. These businesses have subleases with the Victoria Airport Authority, and under the Assessment Act, they are assessed as the owner of the land. This valuation has a significant impact on the actual amount of property tax these companies pay to the municipality and to the province.
What about other businesses?
Yet when my staff brought this concern forward to B.C. Assessment, their explanation was that they needed to review all airport lands in British Columbia and that there was a big discrepancy on how that land was being valued between different airports. I accept that, but I have a difficult time accepting that nothing can be done to lessen the impact on these businesses. I have a difficult time believing that more care could not be taken to the potential impact of losing these employers, to business competitiveness in the capital region and British Columbia.
In this legislation, we see an exemption in certain circumstances for major employers. The government scrambles to allow one type of industry exemption while B.C. Assessment and other ministries outright dismiss others.
I stood in this House last week and asked the Minister of Finance about business competitiveness in respect to another measure undertaken by this government. I raised the situation of another major important employer in this region. They’re an important business in the capital region. They hire and train youth in our community. Oftentimes it’s their first job.
This summer their CEO contacted me. He was distressed, and rightfully so, that their 2018 annual rent from the provincial government increased 42 percent over 2017. Let me state that again: 42 percent increase one year over another. They were not given any notification, from my understanding.
When they asked why, they were told that this was a result of the Ministry of Forests, Lands and Natural Resource Operations applying fees that were more in alignment with the assessed value of the property and the current rental market. This increase came completely out of the blue with no early notification and is drastically is different than the previously assessed value change.
Keeping an eye on competitiveness
These two examples highlight one more situation where government policies are making it hard for major employers to do business. So when I see this bill in front of me today, I’m conflicted. On one hand, I fully support it. I understand why it comes forward, and it will have my support.
But it is important that this government takes a look at the whole package of assessment issues and needs, as was pointed out by the member who spoke previous to me. I believe when I spoke to the minister on this, she agreed.
I look forward to looking at this in a much more comprehensive way, as my history goes back to the municipal council. I remember…. In fact, a gentleman named Tony would stand up every year at assessment time in our municipal council chambers. He’d challenge his assessment every single year. He’s a known commodity in the assessment office.
I think it’s important that we take a look at the whole package of this, and I think that it’s important that the government does the work necessary. While I’m going to support this bill, I strongly support the government taking much deeper action when it comes to B.C. Assessment.
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