Fifth Session, 41st Parliament

(2020) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Thursday, February 27, 2020

Afternoon Sitting

Issue No. 318

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Orders of the Day

Motions Without Notice

Committee of Supply to sit in two sections

Hon. M. Farnworth

Second Reading of Bills

Bill 7 — Arbitration Act

Hon. D. Eby

M. Lee

Hon. D. Eby

Bill 10 — Municipal Affairs and Housing Statutes Amendment Act, 2020

Hon. S. Robinson

T. Stone

A. Olsen

P. Milobar

M. Hunt

M. Bernier

G. Kyllo

D. Barnett

E. Foster

Hon. S. Robinson

Point of Privilege (Reservation of Right)

Hon. S. Robinson

Second Reading of Bills

Bill 3 — Environmental Management Amendment Act, 2020

Hon. G. Heyman

P. Milobar

S. Furstenau

Personal Statements

Withdrawal of comments made in the House

T. Stone

Second Reading of Bills

Bill 3 — Environmental Management Amendment Act, 2020 (continued)

S. Furstenau

N. Simons

Hon. G. Heyman

Throne Speech Debate

(continued)

Hon. C. Trevena

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Tourism, Arts and Culture

Hon. L. Beare

D. Clovechok

M. Stilwell

M. Bernier

S. Bond

J. Sturdy

J. Tegart

T. Shypitka

C. Oakes

D. Barnett

THURSDAY, FEBRUARY 27, 2020

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Orders of the Day

Motions Without Notice

COMMITTEE OF SUPPLY

TO SIT IN TWO

SECTIONS

Hon. M. Farnworth: I move:

[That this House hereby authorize the Committee of Supply for this

Session to sit in two sections designated

Section A and

Section B;

Section A to sit in such Committee Room as may be appointed from time to

time, and

Section B to sit in the Chamber of the Assembly, subject to

the following rules:

1. The Standing Orders applicable to the Committee of the

Whole House shall be applicable in both Sections of the Committee of

Supply save and except that in

Section A, a Minister may defer to a

Deputy Minister to permit such Deputy to reply to a question put to the

Minister.

2. All Estimates shall stand referred to

Section A, save and

except those Estimates as shall be referred to

Section B on motion

without notice by the Government House Leader, which motion shall be

decided without amendment or debate and be governed by Practice

Recommendation #6 relating to consultation.

Section A shall consist of 17 Members, being eight Members

of the Government Caucus, eight Members of the Official Opposition

Caucus, and one member of the Third Party Caucus. In addition, the

Deputy Chair of the Committee of the Whole, or his or her nominee, shall

preside over the debates in

Section A. Substitution of Members will be

permitted to

Section A with the consent of that Member’s Whip, where

applicable, otherwise with the consent of the Member involved. For the

Fifth Session of the Forty-first Parliament, the Members of

Section A

shall be as follows: the Minister whose Estimates are under

consideration and Jagrup Brar, Mitzi Dean, Bob D’Eith, Mable Elmore,

Rick Glumac, Jinny Sims, Rachna Singh, Dan Ashton, Peter Milobar,

Ben Stewart, Jordan Sturdy, Ralph Sultan, Steve Thomson, Jane

Thornthwaite, John Yap, and Sonia Furstenau .

4. At fifteen minutes prior to the ordinary time fixed for

adjournment of the House, the Chair of

Section A will report to the

House. In the event such report includes the last vote in a particular

ministry Estimate, after such report has been made to the House, the

Government shall have a maximum of seven minutes, the Official

Opposition a maximum of four minutes, the Third Party a maximum of two

minutes, and all other Members a maximum of one minute cumulatively to

summarize the Committee debate on a particular ministry Estimate

completed. Such summaries shall be in the following order:

(1) Other Members;

(2) Third Party;

(3) Official Opposition; and

(4) Government.

Section B shall be composed of all Members of the

House.

6. Divisions in

Section A will be signalled by the ringing of

the division bells four times.

7. Divisions in

Section B will be signalled by the ringing of

the division bells three times at which time proceedings in

Section A

will be suspended until completion of the division in

Section

Section A is hereby authorized to consider Bills referred

to Committee after second reading thereof and the Standing Orders

applicable to Bills in Committee of the Whole shall be applicable to

such Bills during consideration thereof in

Section A, and for all

purposes

Section A shall be deemed to be a Committee of the Whole. Such

referrals to

Section A shall be made upon motion without notice by the

Minister responsible for the Bill, and such motion shall be decided

without amendment or debate. Practice Recommendation #6 relating to

consultation shall be applicable to all such referrals.

9. Bills or Estimates previously referred to a designated

Committee may at any stage be subsequently referred to another

designated Committee on motion of the Government House Leader or

Minister responsible for the Bill as hereinbefore provided by sections 2

and 8 of this Order.]

Motion approved.

[1:35 p.m.]

Hon. M. Farnworth: In this chamber I call second reading on Bill 7, the Arbitration

Act, and in

Section A, the Douglas Fir Room, I call the estimates of the

Ministry of Tourism, Arts and Culture.

Second Reading of Bills

BILL 7 — ARBITRATION ACT

Hon. D. Eby: I move the bill be now read a second time.

This bill supports modernization of British Columbia’s arbitration

regime and enhancement of British Columbia’s standing as an

arbitration-friendly jurisdiction. The government commenced reform

efforts in this area in 2018, when we updated the International

Commercial Arbitration Act. With this bill, there will now be increased

harmony between international and domestic arbitration practice. Whether

disputes are international or domestic, arbitration should proceed in a

just, speedy and economical manner, leading to a final and binding

arbitral award.

[R. Chouhan in the chair.]

This bill builds on our history. British Columbia was the first

jurisdiction in the world to adopt the 1985 United Nations Commission on

International Trade Law model law in international commercial

arbitration as a freestanding act. More than 100 jurisdictions in the

world have now adopted the model law. In 2016, the Uniform Law

Conference of Canada created an updated Uniform Arbitration Act, which

is heavily influenced by the concepts and principles of the model

law.

This bill is largely based on the Uniform Arbitration Act, and

British Columbia will be the first jurisdiction in Canada to adopt it.

Accordingly, with this bill, British Columbia will have two arbitration

acts, one international and one domestic, readily recognizable and

understandable as model law legislation. This will benefit business

parties, legal counsel and arbitrators.

The courts will also benefit. Under the model law, courts are

provided discrete and confined places of interface with arbitration.

Consistent with the model law, unless ex­pressly authorized by

this bill, court intervention in arbitral proceedings will be

limited.

The bill sets out an orderly structure, which can be readily

followed and understood. The structure tracks the common flow of

arbitration proceedings. The bill addresses such core matters as

arbitration agreements; commencement of arbitration proceedings;

arbitral tribunal composition; arbitration proceedings, including

arbitral powers; arbitral awards; and recourse against and enforcement

of arbitral awards.

The bill respects party autonomy. Consistent with the model law,

the bill preserves the freedom of parties to agree how their disputes

are to be resolved, subject to minimum requirements from which they may

not deviate.

This bill also includes features not found in the model law but

known to British Columbia arbitration practice for decades — for

instance, the appeal provision. Appeals of questions of law arising out

Columbia adopted decades ago.

[1:40 p.m.]

This bill includes the established appeal provision — however,

with some necessary modifications. The existing structure of the appeal

provision has created too much court process and unwelcome delay.

Arbitrations decided within months from commencement until final award

should not then be subjected to several years of appeals in court, as

has occurred under the present provision.

This was not the fault of either the courts or the parties. It was

a regrettable consequence of the design of the provision itself. The

bill updates the provision to streamline appeals and speed up the

process, thereby lowering party costs and conserving court

resources.

The proper functioning of the appeal provision cannot be

understated. The Supreme Court of Canada has been called on, on several

occasions in recent years, to clarify the scope of arbitration appeals

from British Columbia and has helpfully confirmed that such appeals are

narrowly circumscribed and that a deferential standard of review

applies. Consistent with this approach, the modified appeal provision

directs leave-to-appeal applications from questions of law arising out

of the arbitral award straight to the Court of Appeal. The bill further

allows parties to now expressly opt out of appeals

altogether.

The bill confirms other departures from the model law. The British

Columbia International Commercial Arbitration Centre maintains a

prominent role at the centre of British Columbia arbitration. The bill

and regulations to follow will accord the centre — soon to be renamed

the Vancouver international arbitration centre — the key role as

designated appointing authority.

The centre maintains an extensive roster of qualified arbitrators.

In the event the parties cannot agree who should arbitrate their

dispute, the centre will quickly make the arbitral appointment. Further,

the bill provides the centre a new role in quickly and summarily solving

fee disputes between parties and arbitrators. The centre is ideally

placed to quickly and efficiently dispose of such secondary disputes,

consistent with the parties’ objectives to resolve their disputes by an

alternative process outside of court.

The bill also moves family law arbitration from the current

Arbitration Act into the Family Law Act. The Family Law Act is the

primary family law statute in the province and is a better fit for the

provisions. The Family Law Act governs the substantive law about the

matters that can be addressed in a family law arbitration. The act

already includes provisions relating to other family dispute resolution

processes, and the Family Law Act regulation contains training, practice

and experience standards for family dispute resolution professionals,

including family law arbitrators.

Family law arbitration has important differences from civil

litigation and commercial arbitration, and moving family arbitration

sections into the Family Law Act acknowledges those differences. Despite

the change in statute, the Family Law Act sections in this bill do not

create significant changes for family law arbitration practice. The

sections have been modernized and aligned with the language of the new

Arbitration Act where appropriate, but the policy underlying the

practice remains largely unchanged.

I am pleased to provide this legislation for members’

consideration. I hope they will join me in supporting this

initiative.

M. Lee: I’m also pleased to speak to Bill 7, the Arbitration Act, in the

second reading stage. This bill repeals and replaces British Columbia’s

existing Arbitration Act, the governing statute concerning arbitration

in British Columbia.

I would like to start off by recognizing that the proposed

Arbitration Act set out in this Bill 7 is the final product of a long

process that was actually begun under the previous B.C. Liberal

government. Former Attorney General Hon. Suzanne Anton, the former MLA

for Vancouver-Fraserview, saw the need to modernize B.C.’s Arbitration

Act, which had not been significantly updated since it was first adopted

in 1996, thus beginning the work that also resulted in the International

Commercial Arbitration Amendment Act, which was introduced in April of

2018, and of course Bill 7, before us today.

British Columbia has had a long and deep history in arbitration.

B.C. was the first jurisdiction in the world to adopt the 1985 United

Nations Commission on International Trade Law model law. B.C.’s

International Commercial Arbitration Act still follows UNCITRAL’s model

law, which was amended in 2006.

Included in this bill are changes to the role of the B.C.

International Commercial Arbitration Centre, soon to be known as the

Vancouver international arbitration centre. That centre was established

in 1986, thanks to the efforts of Brian Smith, the former Attorney

General and member for Oak Bay–Gordon Head. That same year, Canada’s

Minister of Justice and Attorney General, the late Hon. John Crosbie,

introduced legislation to parliament to implement the United Nations

convention on the recognition and enforcement of foreign arbitral

awards, also known as the New York convention. This legislation was

passed with unanimous consent from all parties.

[1:45 p.m.]

On May 12, 1986, Canada filed its instrument of accession to the

New York convention with the United Nations. This was instrumental in

laying the foundation for arbitration to work in Canada and in British

Columbia.

I will say that’s it’s through the recognition and the work of Mr.

Smith and the late John Crosbie, with leadership in British Columbia and

Canada, that brought arbitration to the forefront in this jurisdiction.

Since then, the centre has become a leader in arbitration in Canada. It

provides fully administered arbitrations, mediations and dispute

resolution services, all while upholding the highest standard of

domestic and international arbitration.

The centre maintains panels of both international and domestic

experts and offers disputants a choice of rules depending on the size

and complexity of the matter. Successive B.C. Liberal governments have

been the leader in ensuring that arbitration in British Columbia is

updated to reflect current best practices. It is important to us to see

the successful implementation of a bill for which the previous B.C.

Liberal government laid the groundwork.

Arbitration is an integral part of any legal system, and it has

grown tremendously across the world in the last 20 years. In view of

this, it is important that we ensure that our legislation is fully

modernized and that it keeps pace with the best practices and leading

standards.

I also would like to acknowledge the work that was done in

consultation with B.C.’s arbitration community, which, as I understand,

included more than 50 meetings with stakeholders. I look forward to

hearing from the Attorney General the results of that consultation

process in great detail, particularly in relation to this

bill.

I understand that in terms of that consultation, there was

consideration by the Ministry of Attorney General as to how the rules of

the centre would continue to operate and how this would fit with the new

act. Also, in terms of the nature of the consultation itself, that the

consultation relied primarily on arbitrators themselves. There is some

question in terms of the level of consultation with the centre as well

as those who are non-arbitrators.

I recognize that this bill is intended to streamline and to make

understandable the arbitration process here in British Columbia — for it

to be more user-friendly — but we’ll need to understand from the

Attorney General the nature of the consultation and whether those who

are non-arbitrators have been given the opportunity to consider the

changes under this new act.

I also understand the centre will be given, by regulation, a

unique position under the new act as a designated appointing authority.

This bill authorizes the designated appointing authority to quickly

appoint an arbitrator when the parties are unable to agree and resolve

few disputes between parties and arbitrators.

An obvious question to be considered at the committee stage will

be: if it’s the case that the centre is to provide that kind of role,

why isn’t it directly named in the act itself? We know that over the

last number of decades, what is to be called the Vancouver international

arbitration centre has provided leading-edge work, not only in British

Columbia but for international commercial arbitration disputes. So it’s

the centre that, I believe, this province will want to continue to

support and ensure is well recognized.

What better way to do that than to name it directly in the act, as

opposed to relying on a regulation? As parties look to come to this

jurisdiction and utilize this commercial Arbitration Act, they’ll want

to be able to find the best resource, the best support for that. If the

centre is going to be designated as such, it would make sense to put

that right in the act itself.

I also understand that, of course, the Uniform Law Conference of

Canada’s model law was a significant touchstone for this bill and that

other centres of arbitration, globally — namely, London, Paris, Geneva

and Singapore — were also looked to as examples and for best practices.

It will be important to discuss with the Attorney General the nature of

what was included in this act versus the current act.

As arbitration becomes a preferred method of conflict resolution

due to lower costs, higher speed and the potential for expert

arbitrators, compared to court litigation, we need to make sure and

ensure that the legislation properly supports its use — specifically, in

how arbitration can commence, the responsibility of arbitrators and

parties and witnesses, the appeal process and

confidentiality.

[1:50 p.m.]

This new legislation will certainly make arbitration a more

streamlined process, but this also raises questions in terms of a

person’s and a party’s ability to make appeals. It is certainly

streamlining that process and simplifying it, but I think we’ll want to

walk carefully through those provisions.

I also understand the new act, of course, will bring it closer in

line with B.C.’s International Commercial Arbitration Act as amended in

2018. This is certainly a necessary step in making sure that there is

consistency across our legislation and in the process of

arbitration.

As the Attorney General just commented, this does move the family

arbitration provisions from the existing Arbitration Act to the Family

Law Act. It will certainly be important to consider, at the committee

stage, any potential impacts on those utilizing those important family

arbitration provisions arising from this change.

Given the nature of the significant implications of the changes

that are being presented under the new act, I look forward to

considering those sections more closely at the committee stage with

other members of this House.

Deputy Speaker: Seeing no further speakers, Attorney to close the

debate.

Hon. D. Eby: Thank you to the member across for his comments related to the

bill. The member raised one issue that I think I can deal with right

away and which I raised in my speech. It must have just been an

oversight.

It is the intention of government to name the current B.C.

International Commercial Arbitration Centre as the designated appointing

authority in the regulations. The member asked why it would be in the

regulations instead of the bill. Well, the answer was also in the

speech. They are changing their name to the Vancouver International

Arbitration Centre. They haven’t yet changed the name. They may change

their name again. They may cease to exist — because they go bankrupt,

because the board resigns en masse, any number of things.

Not a great reason to get everyone back into the Legislature to

amend the statute. It’s much better to have the name of the organization

that’s the designated authority in the regulation so that it can be

changed and updated as the organization does.

With that, I look forward to addressing his other issues at

committee stage, and I move second reading.

Motion approved.

Hon. D. Eby: I move that the bill be referred to a Committee of the Whole House

to be considered at the next sitting of the House after

today.

Bill 7, Arbitration Act, read a second time and referred to a

Committee of the Whole House for consideration at the next sitting of the

House after today.

Hon. D. Eby: I call second reading, Bill 10, Municipal Affairs and Housing

Statutes Amendment Act, 2020. I just ask for a two-minute recess for my

colleague to arrive.

Deputy Speaker: This House will be in brief recess.

The House recessed from 1:53 p.m. to 1:54 p.m.

[R. Chouhan in the chair.]

BILL 10 — MUNICIPAL AFFAIRS AND

HOUSING STATUTES

AMENDMENT ACT, 2020

Hon. S. Robinson: I move that the bill now be read a second time. This is for Bill

10, intituled Municipal Affairs and Housing Statutes Amendment Act,

I’m pleased to have an opportunity to talk in more detail about

this important piece of legislation which gives local governments a new

tool to help address a pressing issue for commercial tenants,

particularly small businesses, non-profits, and arts and culture

organizations. Most importantly, this legislation offers a tool that

local governments can use, starting in the 2020 tax year, to give relief

to those who need it now.

Under the current system, B.C. Assessment assesses all properties

based on their market value. How much is this property worth? It’s the

market that informs that.

[1:55 p.m.]

When we became government, we inherited an out-of-control real

estate market that was hurting everyone, including small businesses. We

started working with a task group last year to address the severe impact

that out-of-control real estate was having, combined with a highest and

best use framework, an international assessment system that is used

throughout the world, and a triple-net lease framework. All of these

elements — rapidly rising land values, highest and best use framework

and triple-net lease — and the interplay between these elements have

created a crisis situation for many small businesses, mostly, but not

exclusively, in large urban centres where land values are highest and

where local governments are making land use decisions to bring more

much-needed density to some neighbourhoods.

When a neighbourhood plan changes or a property is rezoned because

the local government, the mayor and councillors, recognize that the land

would be better suited to build more homes or commercial opportunities

in that neighbourhood, the highest and best use framework says that

because more can now be built here, the market will pay more. So

property taxes reflect that. The intent is to encourage and stimulate

the landowner into redevelopment so that the desires of the mayor and

the council of the day — in essence, the desires of the city — can be

realized.

However, most tenant agreements use a triple-net lease framework.

It’s an old framework, originated from England, which is hundreds of

years old and is still practised today. This framework usually has the

tenant sign a private contract, making the tenant financially

responsible for rent, utilities and all property taxes. So while the

landowner will ultimately benefit from the increased property value

based on the market assessment, it is the small business person or the

non-profit or the arts and culture group that will bear the brunt of

this increase.

Now, these tenants have been asking for relief, and it’s really

unfortunate that it’s come to this, quite frankly. It should have been

addressed a decade ago. We know, from talking with the CFIB, that they

were raising this issue with the previous government a decade ago.

Because they failed to act, each year the problem has only been getting

worse for the small businesses, the arts groups and the non-profits that

are caught in this situation. Those groups are hurting, and they need

relief now.

Earlier this week Brian McBay, who is the executive director of

221A in Vancouver and on the city of Vancouver’s Arts and Culture

Advisory Committee, spoke about the impact that a decade of inaction has

had on the arts and culture sector. He said: “Vancouver is being emptied

out of music and performing art venues, art galleries and artist

studios.” He went on to share that the city has reported that over 20

cultural spaces with more than 400 artists were closed in the last year

alone. The arts and culture sector needs action now.

We see the same story being played out in the small business

community. Empty storefronts in communities are clear demonstrations of

the toll taken when skyrocketing property values mean significant tax

hikes are passed on to small businesses on triple-net leases. So small

businesses need action now.

With this legislation, we are providing a way to help those who

need it the most right away, while we continue to do the collaborative

work needed to address this situation with a permanent solution. We are

working with local governments. We are working with small business

representatives and others.

I want to take a moment to thank the handful of Metro Vancouver

local governments for working with us on this complex issue and for

helping identify some real, viable, permanent solutions. We are

committed to working together with them as we continue to explore how to

best address this permanently.

The ideas are good ones and worth exploring. From developing a

split assessment framework to reviewing the Commercial Tenancy Act,

there are some really good ideas that are worthwhile pursuing. We look

forward to continuing the work to develop greater fairness in the system

and to working with local governments across the province and the UBCM

and small business groups as we continue this important work.

Businesses can’t wait for the results of that important work. They

need relief now. That’s why we are proposing these amendments. The

proposed amendments enable a tax exemption intended to provide relief to

tenants of commercial properties, particularly small businesses, arts

groups and non-profits which have been struggling with these unexpected

spikes in property taxes.

[2:00 p.m.]

These amendments, while targeted to commercial tenants, provide

significant flexibility to municipalities to determine what businesses

and organizations are most in need of tax relief. If passed,

municipalities across British Columbia would be able to provide interim

business property tax relief for 2020.

While municipalities have some tools already to address these

spikes in taxes, such as averaging or phasing in assessed value

increases, we know that municipalities are calling for more help to deal

with this issue, and that is what we are proposing here

today.

Broadly speaking, the legislation would authorize municipalities

to exempt by bylaw a portion of the value of commercial properties —

that’s classes 5 and 6 — from taxation. This would reduce the property

tax burden for tenants of exempt properties responsible for these taxes.

It would be up to municipalities to decide whether to use the

legislation to provide property tax relief. They have the flexibility in

establishing the different thresholds and criteria used to select

properties within the legislative framework.

The exemption would be implemented through an annual bylaw that

would have to be adopted by April 22 for the first year and March 31 for

subsequent years. Local governments let us know that to have a March 31

deadline for this year would make it extremely difficult for them to

implement, so we extended it because of that feedback. It would allow

municipalities to determine eligibility and the amount of the exemption

that it makes sense to provide.

Now, the legislation would be available for up to five years

through the 2024 property taxation year. The basic framework would

require that all or a portion of the property be classed as class 5,

light industry, or class 6, business and other, or a combination of the

two, in order to qualify for the exemption. The property would also be

required to have at least one commercial tenant responsible for all or a

portion of the property taxes under the terms of a commercial lease, the

amount of which varies with the amount of the tax imposed.

Beyond that, municipalities would be able to set certain

thresholds, such as a minimum increase in commercial land value, so that

they can focus the relief on those properties that need it most, because

they know what their communities need. The exemption would apply to

school taxes in addition to municipal taxes, and while the work on a

permanent fix continues to be underway with local governments and sector

stakeholders and will continue, we know that many small businesses,

non-profits and arts and culture groups need relief now. They need it in

2020, and that’s why we’re introducing this legislation in the interim.

It’s about helping businesses now.

We recognize that for 2020, the timelines are very tight. We’ve

made several adjustments for 2020 to support municipalities in adopting

bylaws for this year if they choose to do so. We’ve even developed a

model bylaw and a user guide to help simplify the implementation. B.C.

Assessment will also provide data as needed to help local governments

narrow their focus on those most in need.

We designed this proposed tax exemption to give municipalities

significant flexibility in identifying the properties to exempt because

we know that this issue looks very different in different communities.

We have heard clearly that they want to be able to ensure that relief

reaches the groups in their community that need this relief most. This

interim legislation is a necessary step in giving that relief to those

that need it most and those that need it now.

We will continue working with the local governments, the Union of

B.C. Municipalities, small business representatives and other

stakeholders on a permanent, more comprehensive solution, because our

government is committed to making life more affordable for British

Columbians. The old government heard these concerns and did nothing. We

listened and got to work on solutions for people right away.

Additionally, there are four other items in this bill which will

complete individual amendments to the Assessment Act, the Local

Government Act, the Community Charter and the Vancouver Charter. The

first moves to align B.C. Assessment’s fiscal year with that of

government and all other Crown corporations. B.C. Assessment is

currently the only provincial Crown corporation that operates on a

calendar-based fiscal year. The province, as well as all other Crowns,

use a fiscal year that runs from April 1 through March 31, and this puts

B.C. Assessment out of sync with the rest of government for purposes of

budgeting and reporting.

The differing fiscal years create an unavoidable inconsistency

between the numbers that B.C. Assessment reports to the public and the

numbers that government reports out in both its yearly and quarterly

updates. By changing B.C. Assessment’s fiscal year, the corporation’s

financial information will be more transparent and easier to

understand.

The second item will remove the authority for the commercial

vehicle licensing program. The proposed amendments to the Local

Government Act and the Vancouver Charter will remove the authority for

the commercial vehicle licensing program. This program was originally

established in 1906 to provide a source of revenue to participating

municipalities to offset costs associated with commercial vehicle use on

municipal roads.

[2:05 p.m.]

In 1987, UBCM assumed administration of the program from the

province, and now UBCM has requested to terminate its administration of

the program based on its financial assessment that this program was

ineffective and no longer meeting its original purpose.

The third item will raise maximum fines for bylaw contraventions

for all municipalities and decrease the time frame in the Vancouver

Charter for completing remedial action requirements. These proposed

amendments enhance local government bylaw enforcement tools.

First, the amendments propose increasing the maximum fine that

local governments can set out for serious bylaw contraventions that are

prosecuted through the courts from $10,000 to $50,000 to create a

significant deterrent to contravening these bylaws. These increased

maximum amounts are optional and may be used by a municipality for

significant offences, but municipalities remain able to set lower limits

as maximum fines.

Second, the amendments propose targeted amendments to enhance

Vancouver’s authority to address standards of maintenance. The proposed

amendments will allow the city of Vancouver to complete work that is

intended to ensure that a property meets standards of maintenance in

urgent situations — for example, where there is a significant health or

safety risk and if the owner does not do so within 30 days of receiving

notice. Currently the owner has 60 days to take remedial action before

the city can take action at the owner’s expense.

We’re bringing these changes in order to make sure that it’s

consistent with the time frame for remedial action under the Community

Charter for all other local governments. In addition, the proposed

changes include minor amendments to ensure that the language is clear in

the relevant sections of the Vancouver Charter.

The fourth item will make amendments to parallel the authority

that all other local governments have under the Local Government Act to

provide Vancouver with the statutory authority to enter into latecomer

agreements and impose and collect latecomer charges in relation to

multiphase developments. Latecomer agreements enable local governments

to require developers to build excess services and infrastructure beyond

the requirements of the initial development to accommodate expected

future growth in an area.

Future developers in that area may connect to the excess services

upon payment of a latecomer charge. This charge is calculated, imposed

and collected by the local government and then remitted to the initial

developer to recover costs for the excess services. Vancouver, however,

currently relies on private cost-sharing arrangements between developers

to obtain the same outcome, and these arrangements can be cumbersome and

difficult to enforce, especially over long periods of time.

The proposed amendments will give Vancouver authority for a

streamlined and enforceable development finance tool consistent with the

authority for all other local governments.

I hope that everyone in the House joins me in support of Bill

With that, I move second reading.

T. Stone: It gives me a great deal of pride to rise and speak to second

reading of Bill 10.

The minister just used a number of phrases that she used in

question period earlier today, that she has used many times in recent

weeks and recent months. Phrases like, “We all need to work together to

help businesses, because businesses need help right now,” “Businesses

can’t wait. They need relief now,” or: “We need to find solutions. We

need to do that now.”

I think we all would agree with those phrases. The problem is that

the solution this minister has brought forward completely and totally

misses the mark. It is a solution that is not actually going to provide

a tool that local governments are going to easily be able to put in

place that will provide the tax relief that is so critically needed by

small businesses in communities across this province.

Let’s just take stock, first, of what the issue is. What is the

challenge that we’re trying to address here? I think, at a macro level,

the facts speak pretty clearly to the reality that small businesses in

British Columbia are getting hammered. They’re getting hammered under an

increasing weight of taxes and regulatory burdens that this government

has placed on their shoulders.

[2:10 p.m.]

The employer health tax. The government loves to talk about the

fact that there is no MSP anymore. They don’t like to talk about the

fact that they simply took the MSP out of place and replaced it with the

employer health tax, which sits on the shoulders of small

businesses.

In fact, small businesses are hit with a $1.8 billion obligation

every single year with the employer health tax. That is in addition to

the fact that the government has changed the rules with respect to the

additional school tax. I don’t think most British Columbians know. Small

business owners know that the additional school tax is applicable on the

unused airspace above a small business. It’s ridiculous, but it’s

true.

We know the stated intentions of this government to make the spec

tax applicable to the unused airspace over small businesses’ heads.

That’s ridiculous, but it’s true.

We know that in British Columbia now, according to the CFIB, the

Canadian Federation of Independent Business, British Columbia has the

unfortunate distinction of having the second-highest payroll tax burden

in all of Canada. We’re second only to Quebec.

We also know that property taxes continue to go up in most

communities. Most local governments do great work, hard work to try to

minimize the tax burden, certainly the increase in the tax burden on an

annual basis. There are others that have more work to do, I would

suggest, on behalf of municipal taxpayers in their

communities.

The city of Vancouver was surprised that their taxpayers didn’t

throw them a parade when they reduced the tax increase this year from

the original proposal of 8.2 percent increase to a 7 percent increase.

People were supposed to feel good about that. Not just the residential

taxpayers in Vancouver but the small business taxpayers — property taxes

are going up.

Retail sales are down. Exports are down. Consumer confidence is

down. Small business optimism is down. In fact, CFIB just put out an

update on business confidence and small business confidence in British

Columbia today and indicated that, yet again, business confidence is

down. I wonder why. I think it probably has something to do with the

significant increase in tax and regulatory burden that small businesses

have to address.

So that brings us to this issue of skyrocketing property taxes on

the unused airspace above the heads of small business owners. It’s not

just the small business owners; it’s also arts and culture groups. It’s

also non-profits and other types of organizations that are increasingly

opening up their tax notices and realizing or, through their triple-net

lease obligations, being advised of significant increases to their

property taxes.

Why? Because they might be classed in class 5 and have the….

They’re classed at the commercial tax rate. Sorry, class 6. They’re

actually paying the taxes on an assessed value as if they were a

200-unit residential condo tower at some undetermined time in the

future. Why is that? Because we have a principle in our assessment

approach in this province which says that you’re going to be taxed on

your highest and best use.

So there are a lot of communities around British Columbia,

particularly in the Lower Mainland, particularly in communities like

Vancouver, Surrey, Coquitlam and even here in Victoria to some degree….

We’re seeing this issue arising in Kelowna, where you have a significant

amount of growth in an urban centre. Along with that growth comes an

upward pressure on the land values.

Municipal councils update their official community area plans and

whatnot that speak to the future intended use of different parcels of

property in different neighbourhoods in their communities.

[2:15 p.m.]

That is having an unintended consequence of, as I said, small

businesses — which have been where they are for, in many cases, decades

— realizing that they have a significant problem on their hands because

of the increase in the assessed value of their land and the property

taxes that they have to pay on that.

Mr. Speaker, I believe there might be an introduction that another

member would like to make. So I’ll just sit down for one moment, but

I’ll resume comments in a moment.

R. Kahlon: Thank you to the member for allowing me to make a quick

introduction.

I seek leave to make an introduction.

Leave granted.

Introductions by Members

R. Kahlon: We have, in the chamber right now, 37 grade 5s from Gibsons Elementary

from North Delta. They’re here with their teacher, Nicole Lewis, and they’ve

got some parents who are chaperoning them, bringing them here. I just talked

to them briefly outside, and they said that the ferries were the best part.

But I know that they’re just going to see the Legislature, and after they

leave, this will be the best part. Then on the way home, they may see the

vending machines. Then that might be the best part.

Anyways, I want to make them welcome. I hope the House can join me in

making them welcome.

Debate Continued

T. Stone: I was saying that the issue here is: because of the increase in

the land values in our densely populated urban centres, where there has

been significant growth, small businesses that exist within class 6 of

our assessment system are paying the higher tax. They’re paying the

class 6 mill rate on a value of some future highest and best use, which

may or may not take place any time soon.

We’ve been saying for the better part of a couple of years now….

As this issue has continued to escalate, as it has continued to become

more and more chronic in neighbourhoods around British Columbia, we have

been calling on the government to take some action.

We have heard from all kinds of small businesses, and the examples

are jarring. Marpole Physiotherapy Clinic, a 63 percent increase in

their property taxes over a four-year period. That’s not sustainable.

There were three small businesses in a White Rock strip mall that I was

talking to that are grappling with combined property tax increases of

over $70,000 in one year — year over year, a $70,000 increase or 40

percent increase. Interstyle Ceramic and Glass in Burnaby, a 250 percent

increase in the assessment on the air over their heads.

There’s a dance studio in Mount Pleasant that reached out to me

and wanted me to know that their taxes had gone up $19,000 in one year.

That’s in the Mount Pleasant neighbourhood of Vancouver. Pacific Sun

Produce in Burnaby — 37 percent increase in their taxes to a level of

$6,600 per month. That’s not sustainable.

I could go on and on and on with examples. I’m hopeful that even

members on the other side will agree that there is a significant

challenge here. It is resulting in an increasing number of small

businesses having to actually close their doors, having to lay off their

employees — that gut-wrenching decision to move on — because they cannot

continue to make a go of it.

There was a lot of work underway on this issue, going back to

2017, 2018. The government across the way, through their Small Business

Task Force, which reported out in October of 2018…. In their report, it

included a recommendation to implement a particular solution that would

address this issue — split assessment classification, which I will talk

about in a moment.

The Union of B.C. Municipalities has passed numerous resolutions

over several years to move forward with split assessment classification

as the preferred solution to address this problem. There was even an

intergovernmental working group that brought forward a number of

recommendations.

[2:20 p.m.]

But they put a priority on the recommendation to implement split

assessment classification, recognizing that as the most viable solution

and imploring government to implement it. That intergovernmental working

group included senior staff from the Ministry of Municipal Affairs and

Housing, senior staff from the Ministry of Finance, senior staff from

B.C. Assessment, as well as representation from a range of local

governments in the Lower Mainland, including Metro Vancouver, Vancouver,

Burnaby, Coquitlam, North Vancouver, Richmond, Surrey and West

Vancouver. They did a lot of good, hard work and looked at all angles of

this issue. As I said a moment ago, they prioritized the recommendation

to implement what’s called split assessment classification.

Now, what the split assessment classification concept entails is,

essentially, creating a new commercial subclass that would be available

to local governments to use at their option. No local government would

be forced to use this tool. But the local government would be able to

use this tool and apply that commercial subclass on a particular parcel,

an entire street, an entire neighbourhood within their community, and

the local government, at their option, would be able to set the mill

rate for that tool. They could set the mill rate anywhere from zero to

just under the existing commercial mill rate.

The thinking here is that local governments could very easily and

very quickly utilize this tool with minimal administrative work required

on the part of local governments. They could utilize this tool by

applying it very surgically, again, on a particular piece of property,

on an entire street, on a designated area or neighbourhood within their

community. That would serve the effect of actually applying a much lower

tax rate on that undeveloped airspace over the small business owners’

heads. It would immediately reduce the tax burden.

I introduced a private member’s bill on this. I first introduced

it in the fall of last year. I reintroduced it a number of weeks ago.

The details in that private member’s bill were not written by me. They

were written by local government experts. They were written by and

vetted by municipal lawyers. The language that’s used in that private

member’s bill comes directly from the written recommendations of the

intergovernmental working group, of the local governments that are part

of that group, of the legal advisers that work for those local

governments.

The wording in the private member’s bill represented a coming

together of the minds of local government officials, arts and culture

groups, small business organizations. In fact, when you talk to the

small business organizations, they said it was an incredibly refreshing,

if not rare, example of the coming together of minds, from elected local

officials to small business officials, to address a tax issue that would

actually result in reducing that tax burden and reducing potential

revenues for a municipality.

You don’t hear of that kind of collaboration very often. But they

did the heavy lifting, and they brought the wording for that

recommendation forward. We took that wording, we put it into a private

member’s bill, we introduced that bill in this House last fall, we

reintroduced that bill again a few weeks ago, and the government refused

to call it.

Now, the minister has said the details in that bill are

unworkable. Her officials, in a technical briefing earlier this week,

referred to this private member’s bill as potentially having unintended

consequences. Yet I point back to those officials and to the minister,

in particular, that, again, it was this intergovernmental working group,

all of those local governments, all of that external legal expertise,

those small business organizations that all came together and vetted

this and determined that it was workable.

I would, again, argue that worse than unintended consequences of

moving forward with our split classification proposal is doing nothing

or bringing forward a solution, as the minister has, that is not going

to get the job done. It’s certainly not going to provide the tax relief

that small businesses and other organizations need — and need

now.

[2:25 p.m.]

This split assessment classification proposal is widely supported.

I mentioned all of those local governments. There are dozens of business

improvement associations throughout Metro Vancouver that signed off on

this proposal — the BIA on West 4th, the BIA in Marpole, the BIA in

North Vancouver–Lonsdale, just to name a few. Chambers of commerce all

over the Lower Mainland — the chambers of commerce, actually, over three

years in a row, passed resolutions calling on the government to

implement a split classification. But the government has opted to go in

a different direction.

Let’s talk about what the minister has brought forward. The

minister has brought forward a solution that has been widely panned by

local government mayors and councillors as being unworkable. They have

also pointed out, in the last couple days since this bill was

introduced, that it is not what they were asking for. They were not

asking for this complex tool that the minister has brought

forward.

I’ll run through some of their commentary in a moment, but what

exactly is it that she brought forward, and how does it differ from what

local governments are actually asking for? Again, split assessment

classification is what local governments were asking for.

Here’s a

summary of the benefits of what the local governments

were actually asking for. Number one, it targets the root of the

problem. Business is being taxed on the airspace that they don’t use —

very, very specifically targets that unused, undeveloped airspace above

their heads.

Next, in cities with appropriate zoning, apartments with

ground-floor commercial and upper-floor residential are assessed and

taxed separately on those parts. That’s critical. That’s critical to be

able to separate that tax obligation between the existing use of the

existing building and the unused potential in the air above the

building.

Next, by separating the classification of the airspace from the

actual business, councils can tax the airspace at a separate rate from

the business rate. That’s where that commercial subclass comes in at a

lower mill rate that gets applied to the unused airspace — very simple,

very elegant. City councils would define the eligibility requirements

for properties. They would define the duration of tax relief, and they

would set a tax rate for unused airspace ranging, again, from zero

percent to just under the existing mill rate for the commercial

class.

Next, the valuation of development potential would remain. The

bill that we brought forward, which embodies that split assessment

classification solution, is equitable. It can be applied consistently as

local governments see fit within their communities. It does not in any

way alter the highest and best use methodology, which is, again, not

just the standard for assessment here in British Columbia but is an

internationally recognized standard for assessment. So no unintended

consequences or negative impacts on that assessment standard.

As I said, it was a split assessment classification proposal that

was endorsed by the UBCM and all these local governments. Very

importantly, if the government had called this bill for debate, the

private member’s bill I’m speaking of…. If they had actually called it

for debate and brought forward the solution that had been recommended by

local governments last fall, it could have been debated, it could have

been put into law, and it would have enabled local governments to

utilize this tool in time for the 2020 tax year and provide the tax

relief that small businesses and organizations need.

Let’s talk a bit about the permissive tax exemption approach that

is embodied within the minister’s Bill 10. Again, this bill requires

municipal councils to individually sort through…. They have to sort

through, and they have to pick which properties with triple-net leases….

That’s an important point. If you don’t have a triple net-lease, this

doesn’t apply to you. That’s not fair.

They have to sort through and pick the properties with triple-net

leases, based on the percentage increase in their taxes, and then give

those properties a discount on a portion of their property taxes. Again,

this is not what local governments asked for.

[S. Gibson in the chair.]

Bill 10 is going to mean that there’s going to be a shift in the

taxes onto other taxpayers and businesses that don’t qualify. So as I

mentioned, if you don’t have a triple-net lease, you don’t get to even

think about asking a local government to lower your taxes a little

bit.

[2:30 p.m.]

The minister’s approach requires cities to maintain the same level

of school taxes collected for the province. Well, isn’t that convenient?

So the local governments have got to make sure that they keep the

province whole. Again, that’s about increasing the burden of these taxes

on some taxpayers versus others.

Bill 10 requires each municipality to literally go through

thousands of different properties and determine who is eligible for what

level of relief. What does this mean? Does this mean that local

governments are now going to have to ask a private individual for a copy

of their triple-net lease? That’s got privacy issues all wrapped around

it.

Huge administrative burdens. Local governments are saying that

Bill 10, this approach, is going to be very, very difficult and

time-consuming and rigid for them to implement. It has the opportunity

to result in inequity between properties. And given the amount of work

required to identify properties and apply the exemptions, councils,

through Bill 10, may also not be able to meet the deadline, even though

it was extended to April.

I also want to point out that there’s no mention of the Local

Government Act in this piece of legislation. It only references the

Community Charter and the Vancouver Charter, which means that this tool

is not available for use by regional districts. Yet we heard the

minister, over and over in question period earlier today, reference how

she’s hearing about all these issues of skyrocketing property taxes in

the Cariboo regional district. Like, seriously, let’s get real

here.

This bill is not workable. It’s not the opposition members that

have arrived at that conclusion independently. It’s what local

governments and others have said. What have they said? Well, Vancouver

mayor Kennedy Stewart has said this: “We started talking about this with

the province in late 2018. There has been time to get this right. What

scares me is how many businesses will go down before we get this

fixed.”

The mayor of Vancouver goes on to say that this law “fails to

provide tax relief for small business and non-profits, and it could wind

up costing them even more. We need to be able to target development

potential and airspace, and this does not allow us to tackle

skyrocketing property values. These changes won’t do that. What we’d

really like is for the province to drop these proposals” — listen

carefully — “and work with us on what we’ve proposed.” That’s the mayor

of Vancouver, who I know is a good friend of the Minister of Municipal

Affairs and Housing and her colleagues — a bit of a gap in their support

for this initiative there.

North Vancouver mayor Linda Buchanan had this to say the other

day:

“…the proposed legislation will fail to alleviate the burden small

businesses in the city of North Vancouver are feeling. The proposed

changes won’t allow us to target businesses who are disproportionately

being affected by property value and could even possibly result in tax

relief for large international companies. I’m disappointed the province

hasn’t delivered a more community-oriented and workable solution as

recommended by the intergovernmental working group.”

Again, that was Linda Buchanan, the mayor of North

Vancouver.

Dennis Marsden in the city of Coquitlam, the minister’s hometown,

had this to say: “A disappointing outcome to nearly two years of work.”

Two years of work, and the minister says that she didn’t have enough

time to put in place a proper solution. It was two years. But I’ll carry

on with the quote: “A disappointing outcome to nearly two years of work

by a joint task force — cities told there’s not enough time to bring a

proper solution, so we’re forced to try and implement this dog’s

breakfast in less time and with no access to the information needed to

determine qualifications.” That’s Coun. Dennis Marsden in

Coquitlam.

Craig Cameron in West Vancouver — he’s a councillor there — had

this to say: “The province’s fix for small businesses facing

unsustainable property tax hikes is unworkable on several levels. Many

municipalities have told them this, but they refuse to

listen.”

[2:35 p.m.]

Dylan Kruger, a city councillor in Delta said this: “This tool, as

proposed, is quite convoluted. It largely targets the wrong population

and would not help the majority of small businesses in Delta that are

desperately seeking tax relief.”

What does the Canadian Federation of Independent Business have to

say? They’ve done a tremendous amount of hard work on this over the

years. Here’s what they had to say:

“Monday’s announcement passes the issue back to municipalities ‘like

a hot potato.’

“‘It’s not really a tool that’s useful or that would actually

provide meaningful relief. Unfortunately, when you look at main streets

across Metro Vancouver and even in Victoria, you see empty storefronts

boarded up. We don’t see this being a solution to help small businesses

not close their doors.’”

That was Muriel Protzer of CFIB, just earlier this

week.

So this is a bill that is riddled with all kinds of complications,

all kinds of complexities, all kinds of red tape. This is a bill that

essentially illustrates an abdication of the province’s ability here and

willingness to actually lead on this issue and provide a solution, a

workable, achievable, quickly implemented solution via the assessment

side of the equation as opposed to the taxation side of the equation.

This is a bill that the minister, no matter how many times she says

otherwise, does not have the support of many of the local governments,

certainly in the Lower Mainland. It does not have the support…. It is

not what the Union of B.C. Municipalities asked for. It is not what BIAs

have been asking for. There are significant privacy concerns that flow

from this bill. We’ll have a whole bunch of questions for the minister

on that piece.

The amount of work that the local governments would have to go

through in order to sift through hundreds if not thousands of properties

to determine what they’re paying in their property taxes through their

triple-net leases and to make some kind of determination as to what that

maximum level of taxation is that they’re willing to charge, and whoever

is above that is going to get a discount….

How that’s all going to work is anyone’s guess, but I would

suggest that from the sounds of what local officials are telling us, and

what they’re saying publicly, it will be a heck of a lot of work, a lot

of work that probably would not be easily accomplished within the time

frames between now and April to actually make any difference this

current year for small businesses. And they need help now.

The split assessment classification proposal, which everyone was

asking for, which we embodied in our private member’s bill — that’s the

solution that would get this job done, that would provide relief to

small businesses. That is not what is contained here in Bill

I have said to the minister, and I’ll say it again: my feelings

would not be hurt if she wants to take those ideas and make them her own

and incorporate them into her own legislation. I’d be thrilled with

that. But what she needs to do is she needs to scrap this Bill 10. She

needs to take the advice of the mayor of Vancouver and those other

mayors and councillors that I just mentioned, and she needs to bring

forward a proposal to implement split assessment classification. And she

needs to do that very, very quickly so as to provide the help that so

many small businesses, arts and culture and non-profits and other

organizations need as a result of the soaring property taxes that are

literally killing many of these organizations. We don’t have any more

time to waste.

A. Olsen: I listened with interest to the previous member speak to this, and

I know and thank the member for Kamloops–South Thompson for raising

these important issues that indeed have been on the front of my mind

since being a municipal councillor in the district of Central

Saanich.

[2:40 p.m.]

The issues around property taxes, the issues around the

relationship between the provincial government and local governments has

been one that has been problematic going back a long way. Indeed, we’re

seeing and we have definitely heard from small business owners and from

others — the arts and culture community is an example — of the

challenges that are being faced when properties are being redesignated

or upzoned and the impact that has on them when the owner of that

property has not yet developed the full potential of the newly zoned or

the newly designated area.

I do note that there have been issues that I’m aware of as well

that those same small business owners also have challenges once those

buildings have been redeveloped in being able to maintain and stay in

those places because now they’re not able to pay the increased

leases.

I think that it’s important to point out that while…. There is an

aspect of this that I think the member raises that’s really important in

terms of the urgency and the time it has taken to get to where we’re at.

I think that there is a much deeper problem that has been raised by

municipalities and by the organizations that represent municipalities

that has largely fallen on deaf ears when it comes to the provincial

government’s willingness to engage local governments on the challenges

that are faced with the revenues that they’re able to generate and where

they’re able to get their revenues from.

I point back to when I was in local government, when I was on the

Central Saanich council. In 2013, the Strong Fiscal Futures

report was put together by the then mayor of the city of Port Coquitlam

Greg Moore, the then mayor of the district of Saanich Frank Leonard,

then mayor Taylor Bachrach from the town of Smithers and others who were

identifying the significant challenges that municipalities had in being

able to generate enough revenue so that they were able to do the things

that they needed to do on behalf of their citizens — make sure that

their infrastructure was maintained and make sure that they were able to

upgrade their infrastructure.

There’s always been this challenge with local governments in the

heavy reliance that they’ve had on property taxes. It has created a

scenario in which, yes, they’ve gone and redesignated. They’ve

upzoned.

Some of it has been a response to the fact that densification is

the way that we need to go. That clearly is the case, where we need to

be densifying land that’s already been developed and making the most out

of it. It needs to be done in order to be able to create compact

communities. No question about it. Part of it is done because

municipalities are looking for ways to generate revenue because the

access to other streams of revenue has not been made available to them.

That’s exactly what the Strong Fiscal Futures report, which

fell on deaf ears back in 2013, was trying to achieve in its five-point

agenda.

I remember back at that UBCM. I remember when that report was

brought in. I remember the work that was done by the local government.

Our colleagues, many of the people that are sitting in the seats here

today, were local government officials at the time who remember the

impact that this fiscal relationship between the provincial government

and municipal governments has had. We were collectively asking the

provincial government to please listen to the fact that local

governments are being asked to do more and more, yet the availability of

funds to do that has not increased in order to keep up with the demands

on the local government tax base.

There wasn’t even one mention of that report. There wasn’t even

one mention of that report by the government of the day, that it even

existed. After all the work that was done by local government officials,

elected officials, it was completely ignored. It was like that 90-page

report, that five-point agenda, the invitation by local governments to

get around the table and to have the conversation….

[2:45 p.m.]

It’s not just to deal with an issue that is emerging and needs to

be immediately addressed but a deep-seated, long-standing problematic

relationship between where revenue is generated and the need for local

governments to be able to maintain and update and upgrade

infrastructure. The infrastructure that we, in this place, talk about so

often. It’s the infrastructure — the economy — that we talk about in

here rides on.

We’re all too happy to have local governments making those

investments to ensure that the economy has roads to ride on, that

there’s water and that there are sewer services. Those local government

services are there to support the economy that we talk about in this

place. But for years, local governments have been asking for access to

other revenue streams, and it has fallen on deaf ears.

One of the challenges that local governments are facing now is

they’re facing demands with the opioid crisis. They’re facing demands

with the homelessness crisis. They’re facing increased responsibilities

to improve infrastructure and to strengthen infrastructure because of

climate change. So there are good reasons why this needs to be solved,

and it needs to be solved expeditiously. The small businesses that

inhabit those sites that are currently undeveloped to their potential

are experiencing unsustainable increased tax bills.

It’s important that we tell the whole story. There is also a

reality that when those buildings are redeveloped, those small

businesses will face increased costs in terms of their lease. That’s

true as well. That’s an important piece that needs to be acknowledged in

this.

Just simply dealing with this measure in terms of a split

assessment classification, as has been talked about and has been put

forward as a solution to this particular part of the problem, this slice

of the bigger picture, does help provide relief in the meantime, between

now and when those properties are redeveloped. Unfortunately for small

businesses, those costs of development are handed along in the new

lease, and it makes it very difficult for them to be able to survive in

those locations anyway.

So when I look at this bill — I heard the minister — I’m prepared

to see this bill move forward to third reading. I’m very interested in

hearing the debate with the minister on the varying aspects of this.

I’ll be engaged in that debate. I see that there’s an opportunity here

for municipalities that want to use it, to use it. For those

municipalities that have an issue with it, they won’t. That’s going to

become very clear in the coming weeks, should this bill

proceed.

I would just say that while I hear the conversation here about the

urgency that’s happening right now, that has been a growing urgency over

a long period of time. Anybody who has been in local government and that

now inhabits one of these seats knows very well that this is a

long-standing issue that has gone unresolved. It’s much deeper than the

unused airspace. It is about the resiliency of our communities. It’s

about the sustainability of our communities. It’s about how communities

in our province are able to generate revenue to be able to support the

increased costs.

I encourage the minister…. It’s one of the reasons why I got

frustrated at the local government table as we were chasing around

conditional grants, as we were chasing around priorities of the

provincial government, rather than the provincial government coming to

the table and saying: “How can we support you?”

With that, I’m going to take my seat, and I’m very interested to

hear the debate as it goes along.

P. Milobar: It’s my pleasure to rise to Bill 10. Certainly, as we’ve heard

from the previous speakers and the minister herself, this is an issue

that is very important.

[2:50 p.m.]

Time is of the essence. It is a very serious issue, and certainly,

this side of the House takes this issue very seriously and intends to

fully debate and comment. We look forward to hearing any further

comments from the other side as to what they have to offer, comments as

to why this is a piece of legislation that should be supported. As it

stands right now, it appears to be a deeply flawed piece of legislation.

Taking action for the sake of taking action, with a piece of flawed

legislation, does not seem like a good path to take forward.

It’ll be interesting. The Leader of the Third Party finished up

comments, and as we saw with the budget as well, had some pretty

significant concerns. But it sounds like there’s already a leaning

towards supporting this piece of legislation. That would be unfortunate,

frankly, because it is flawed. It is not going to work as intended. Last

I checked, this is not a confidence vote. I say that because I believe

that in the confidence and supply agreement, the only votes that the

Third Party has committed to actually supporting the government on are

votes on a matter of confidence.

One would hope that the Leader of the Third Party, with the

municipal background experience that he has — as do myself and several

others that will speaking this afternoon — would see that this flawed

piece of legislation should not be supportable, for the very reasons

we’ve already heard. I’ll touch on a few of those, because that’s really

what is at its core here.

This isn’t a bill that is going to figure out how to replace or

improve municipalities’ ability to fund their operations, as we heard

from the previous speaker. This isn’t a bill that is going to solve all

the problems of the municipal government. It’s not going to replace

grants. It’s not going to do any of that. I think it’s important that we

focus in on what this bill is purported to try to do, because what it’s

saying it’s going to do is not actually what is going to happen in

practice.

Now, I say with 15 years of municipal experience in my background:

this simply is a tool that will be unworkable. It will pit city

councils, mayors and councillors with having to pick and choose, on a

property-by-property basis, who gets to have a lower property tax bill

and who doesn’t — but not everyone.

If you’re the small operator that’s got a generational business in

my city…. There are several in Kamloops where people have a smaller

mom-and-pop type operation, have various types of goods that they sell.

They don’t want to develop. They don’t want to become developers and put

in highest and best use to the airspace at this particular time. But

they own their property, and under this legislation, there’s no relief

for them whatsoever.

If you’re a non-profit that has the small one-or two-storey

walk-up that your non-profit worked very hard over the years to acquire,

and you were the owner of that property and you did that so you could

get away from monthly lease payments to make sure you can still do good

work in your community and maximize the benefit of that good work in

your community, this bill penalizes you. You do not get any tax relief

if you’re a non-profit, an arts group or a daycare that happens to own

their own property in an area within an official community plan and that

would necessitate highest and best use, taking into account the

airspace.

The minister, every single time in answering and trying to deflect

away as to why not a split-class assessment, clings to some local

government in the Cariboo, which is a pretty big geographic area. It’s

too bad the minister is not a little more accurate with what place in

the Cariboo is seeing unprecedented spikes in airspace speculation for

development. I’m sure that area in the Cariboo would love to know that

their airspace has become so valuable. It sounds to me that it’s so

valuable that it blocks proper legislation being brought in. Their

airspace has suddenly been deemed to be more expensive than the corner

of — I don’t know — Georgia and Burrard in Vancouver, to have the

minister tell it.

[2:55 p.m.]

This makes it very clear. The reason that the member for

Kamloops–South Thompson’s private member’s bill was not brought forward

for debate in the fall, was not brought forward for debate now —

instead, a piecemeal piece of legislation that was not what anyone was

asking for — is that frankly, from my view, it appears the minister is

not confident enough to bring forward ideas and thoughts from this side

of the House that, everyone else seems to agree, are the right solution

to the problem.

We saw that happen with vaping. It wasn’t word for word the same

as the vaping bill that the same member for Kamloops–South Thompson

brought forward. The Minister of Health did take it under advisement,

did turn that piece of legislation into his own, but the core pieces

were the same. I guess that’s the difference between a minister that’s

confident in their portfolio and one that would rather ignore what is a

proper action to bring relief to the people that are purported to want

it.

September 23, 2019. I’m going to read a paragraph out of a letter

that was sent to the Premier.

“The policy on the table that is being endorsed by the

municipalities, the business community and the arts community is the

creation of a new commercial property subclass. This will allow

municipalities to tax the unbuilt development potential above businesses

at a rate lower than the current commercial rate. We urge the government

of B.C. to take the immediate steps needed to provide municipalities

this tool, which can provide real, targeted tax relief to those small

businesses which are the most impacted, in time for the upcoming tax

year.”

That was in September of 2019. That was the first time,

last fall, that we brought forward the subclass private member’s

bill.

That was in a letter sent by the Vancouver Business Improvement

Association; the B.C. Alliance for Arts and Culture; the Greater

Vancouver Board of Trade; the B.C. Chamber of Commerce; the Great

Northern Way Scene Shop and Arts Factory Society; Canadian Federation of

Independent Business; Urban Development Institute, Pacific Region;

National Association for Industrial and Office Parks, Vancouver;

Building Owners and Managers Association of British Columbia. They all

signed off on that letter. In fact, their signatures took up a whole

other page of the two-page letter.

It was very clear what groups were wanting to see it brought

forward, and it was very clear what municipalities wanted to see brought

forward. What they wanted to see brought forward, through the work of

the minister’s own committee, was what is encapsulated in the private

member’s bill currently hung up at second reading in this House. It’s

not going to be called for debate. Why? It’s because the minister, out

of spite, would rather bring in flawed legislation that’s not going to

do anything to help anyone, to actually bring forward what is being

requested, what is being needed by municipalities.

The sad

part is that the vote will probably pass because the Green

Party — although they recognize that it’s flawed and although it’s not a

confidence vote — will wind up voting for it. But let’s think about what

happens if we could vote this down. I think it would send a very clear

message to the minister that we should be debating that private member’s

bill and that we should still be able to get the relief for the

businesses and the small business owners that they need in

time.

We do still have the ability to move this forward, if we had a

minister that was willing to do what is right, not what is spiteful.

Let’s be clear: this does not create the split assessment that we’ve

been hearing about. It’s simply a tool that will be unwieldy, that will

be very hard to implement even with the updated timelines that the

minister has given for tax rates to be set. There will undoubtedly be

some people that get missed in it, and then it’ll be too late and no

relief for them moving forward. It is simply flawed.

[3:00 p.m.]

Now, I haven’t been around a municipal table since May of 2017, I

guess. So things could have changed a little, I guess — maybe my

thoughts on how assessed values work and what a split assessed value

bill would do, compared to this flawed piece of legislation. But it

seems that there are a whole lot of current elected officials in

municipal land that have that same opinion, that have that same point of

view. Let’s look at a few of the quotes.

Vancouver Courier , February 25, 2020, “When the highest

and best use applied to their properties and their leasing, they’re

getting hit with very heavy property taxes because of that. Split

assessment would have really helped” — Mayor Kennedy Stewart of

Vancouver.

Last I checked…. I’m pretty sure that before he got into municipal

politics, he flew a banner federally that’s fairly similar to the

governing party. He doesn’t seem to agree with this minister on this.

But it’s full steam ahead with flawed legislation.

Another quote from Mayor Stewart. “The ministry said on Monday

there was not enough time to address those issues for 2020. But Stewart

disagreed. ‘We started talking about this with the province in late

2018. There has been time,’ he said. ‘What scares me is how many

businesses will go down before we get this fixed.’”

We could get this fixed in time for this tax year. We could vote

this down. And we could debate the split assessment private member’s

bill and get that implemented in time if we had a minister that was

confident enough to actually make sure we’re taking the proper actions

in this chamber, instead of worrying more about the appearance of trying

to do something.

Sarah Kirby-Yung, Vancouver city councillor, again in the

Vancouver Courier : “It would require literally each

municipality to go through thousands of different properties and

determine who would be eligible, so there’s lots of room for inequity.

And also administratively, it’s almost impossible to

achieve.”

That’s fairly telling that this legislation is not going to

accomplish what they say. Again, I’ll be curious to hear the other

side’s defence of this legislation, as we go through this debate of Bill

10 throughout this afternoon, and to hear what exactly the other

members, other than the minister, have to say in defence of a completely

flawed piece of legislation. I think that — to a person on that side of

the House — their own mayors and councillors have said this is not

workable. It is not an appropriate piece of legislation.

Dennis Marsden, Coquitlam city councillor, the minister’s own

city: “A disappointing outcome to nearly two years of work by a joint

task force. Cities told there’s ‘not enough time’ to bring a proper

solution, so we’re forced to try and implement this dog’s breakfast in

less time and no access to info needed to determine qualifications.”

Pretty damning statements.

Paul Sullivan — he’s a property tax expert and a B.C. real estate

appraiser. One would think Mr. Sullivan is probably pretty well versed

on all things property tax and real estate. This is what he had to say

on February 24. “This is a passing the buck and leaves little time to

make this process meaningful,” he said. “I would be surprised to see

municipalities having adequate time to properly impose such a

bylaw.”

This is an added workload to municipalities that already have

staffing levels that are stretched pretty thin. If you look at

development permit time frames in the Lower Mainland area and you think

of how punitive the increased airspace cost is on the property tax

bill…. Well, if they were still trying to actually develop that land and

they’re sitting and waiting for a development permit, how is that same

department going to suddenly have the resources and the manpower to help

to guide the taxation department within a city on which buildings and

which properties should qualify or not?

[3:05 p.m.]

It will be through development services that a great portion of

this work gets done in most municipalities. Most taxation departments,

most revenue departments, in cities don’t have a lot of extra time,

don’t have a lot of free time around tax time, especially, to be trying

to implement this. There are work plans within the municipalities for

the level of work and applications that they reasonably expect to

normally get. This just adds to that workload. This will require the

hiring of more people in those municipalities and the time to hire them

to try to implement this properly.

Why? Because the minister is not confident enough to stand in this

House and just say: “You know what? The recommendation from the policy

committee that recommended the split assessment that is contained within

the private member’s bill is the right way to go to bring in proper

reform, and that’s what we’re doing.”

Instead, the minister brings in flawed legislation and prattles on

about 16 years. Well, people need to pay their property tax bill this

year. There is tangible, real action the minister can take this year

that doesn’t include going on and on and on about 16 years.

We get it. The minister wasn’t happy being in opposition for 16

years. Well, you know who decided the minister should be in opposition

for 16 years? The public did. So if they’re not happy about the 16

years, that’s who they can look to and wonder why they were in

opposition for 16 years.

This tool, this unwieldy, gangly tool in Bill 10, will not

accomplish what its stated goal is. And frankly, I would challenge

anyone on either side of this House. When a piece of legislation is so

fundamentally flawed that you know it is, to blindly support it when you

know it’s not going to deliver anything towards what its stated goal

is….

This isn’t about an ideological deliverable. This is about: is it

actually going to deliver any tangible result to a property owner, to

somebody leasing? Well, a property owner it won’t deliver anything to,

because if you own the property and happen to operate the property, you

don’t even get to qualify for this — or if you’re a non-profit that owns

the property.

Let’s just look at the people leasing, with triple-net leases.

Will this actually help them? Not if the municipalities can’t implement

it properly. So far, it’s been pretty easy to find people that say this

is not a workable tool.

The minister comes up with some mythical spot in the Cariboo that

is demanding that the split assessment doesn’t get implemented because

there’s some spot in the Cariboo that’s got massively expensive airspace

parcels. Maybe we could at least get map coordinates, because there’s a

great portion of the Cariboo that you actually do need your longitude

and latitude to know where you’re going. Then we could pinpoint it on a

map where this hotbed of activity in the Cariboo is that no one’s quite

aware of.

Interjection.

P. Milobar: Yeah, it’s not likely. Exactly.

Let’s see what the CFIB says, Muriel Protzer.

“Monday’s announcement passes the issue back to municipalities ‘like

a hot potato.’

“‘It’s not really a tool that is useful or that would actually

provide meaningful relief,’ she said. ‘Unfortunately, when you look at

the main streets across Metro Vancouver and even Victoria, you see empty

storefronts boarded up. We don’t see this being a solution to help small

businesses not close their doors.’”

Again, take all of the partisanship out of this that you want.

These are former NDP MPs. These are NPA members. These are business

communities. It cuts across all political spectrums, just like local

government does, actually. They’re all saying the same thing.

I can understand the back and forth in this House if this is an

ideological type of conversation, but I’ve heard the other side say that

they want to see tax relief for small businesses. We certainly want to

see tax relief and tools for municipalities for small businesses. We

appear to agree that a solution needs to be found for that.

[3:10 p.m.]

But what everyone seems to be saying, except for the minister and

members of the government, once they get their speaking notes from the

minister’s office…. They’re the only ones saying that this bill is good.

No one else is.

Again, it’s not a confidence vote. It might be a little

embarrassing for the minister. I get that. It didn’t have to be. Could

have just brought forward the private member’s bill or done like the

Health Minister did, slightly tweak the private member’s bill, bring it

forward as if it was their own and left the private member’s bill to

languish away. We would have been able to, as an assembly, deliver the

necessary tools for small businesses and municipalities to be able to

implement those tools.

We’re not seeing that. We’re not seeing that because of one

person’s desire to not have to look like they’re caving in. What would

the minister be caving in to? The minister would be adopting the

recommendations that the minister’s own committee brought forward as the

solution.

This is the madness to this whole debate right now. The

legislation we’re debating is actually totally, 180 degrees, different

than what the minister’s own committee is recommending be done to solve

this problem. The solution that the committee is recommending is still

sitting on the order paper in this House at second reading for

debate.

I can understand why municipalities are frustrated, why business

groups are frustrated, because not everyone understands the processes

that this House goes through. They hear: “Relief is on the way. We’ve

got a private member’s bill, a split-class assessment. We got exactly

what we’ve been asking for on the order paper. Perfect. It’s going to

get debated.” Then they find out what the process really is, that it’s

going to go nowhere because this government does not have the fortitude

to pull it forward for debate. But what will come forward is a

completely flawed bill that is not going to come close to doing anything

that people have been asking for.

Now, I’ve touched on whether or not this applies to people that

own. Do not underestimate the number of long-standing non-profit

agencies that own their own buildings. It’s very common practice that,

over the years, especially the older and more established ones found

ways to slowly get a mortgage, get a building bought and start doing

their operations out of there to avoid lease payments. They obviously

can’t get away from the triple net, because taxes still need to get

paid, utilities still need to get paid, but they could get away from

that monthly lease payment. They could put more back into doing good in

their communities.

Most of those buildings are a couple-of-storey-walk-ups. They’ve

got valuable airspace, but the non-profits are not in a position to get

going with development. Even if they are, even if they filed their

paperwork today, we know that they would be four to five years before

they were able to actually have anything tangible in the air, if they

were lucky. Even if they applied today for a building permit, a

development permit, they would be paying, under this legislation, the

full shot for four, five, six, seven years straight, even though they’re

trying to do the right thing and maximize the airspace to try to get

some housing into that area of their city.

Under this legislation, even if the municipality wanted to exempt

them, they can’t. No help for the non-profits.

That’s why this is so flawed. It’s flawed. It needs to be

defeated. It is not a confidence vote. I’m going to keep repeating that,

so hopefully somebody in the Green caucus or staff are taking notes that

this is not a confidence vote.

[3:15 p.m.]

There’s absolutely nothing in CASA that says that the Green Party

has to support this legislation — nothing. If they actually truly

believe that this is not good for local government, just as all the

local governments are saying, they’re free to vote against it. The world

won’t stop spinning. There are other options that we can still get

implemented as an assembly to bring forward relief for people. The

minister will probably be a little bit embarrassed, but life will go on

for the minister as well.

We can actually, as an assembly, get back to working to deliver

the tools that municipalities, business groups, lessees, building owners

— everyone — is saying they need, which is split-class assessment. It

might not be 100 percent perfect the first time out of the gate, but as

we saw today with the Attorney General, with 22 different miscellaneous

statute amendments, things can always be amended. But getting it 95

percent right, right out of the gate and having to tweak and amend it a

year or two down the road is a lot better than getting it 100 percent

wrong with Bill 10 and seeing no relief whatsoever.

Let’s think about this moving forward. If the minister today is

saying that what’s in the private member’s bill is not workable and not

a solution, that’s the last solution that’s out there, and that’s the

one everyone wanted. This is supposed to be the temporary measure. So

will it be less embarrassing for the minister a year from now to bring

in what is in the private member’s bill? Two years from now? How long do

we have to let business owners, communities and municipalities struggle

with this to save the minister a little bit of embarrassment? Do we have

to wait for a cabinet shuffle, maybe a new minister? Because that’s, at

its core, the problem here.

When everybody, including the minister’s own handpicked committee,

comes up with a solution that the minister is willfully willing to walk

away from — frankly, in my opinion, out of spite — there’s something

fundamentally wrong with how this place operates, because we are not

debating whether or not there should be relief. We’ve all agreed. The

minister has agreed, we’ve all agreed and the Green Party has agreed

that businesses need help, that municipalities need tools to give them

that help. We all agree with that, and everyone but the minister seems

to agree what that tool is: split-class assessment.

This doesn’t change the minister’s revenue projections in her

budget — the difference between Bill 10 and the private member’s bill.

It doesn’t affect any of that. So I hope that this assembly does what’s

right and not just rubber-stamp a bad piece of legislation — because

that’s what this is, a bad piece of legislation — and votes it down, and

we can actually deal with and implement the solution that everyone has

been asking for and is literally sitting on the docket ready for us to

debate. We could have that passed in time for this tax season. People

could have that relief on the way, and municipalities would have a

workable tool that they’ve actually asked for to be brought

forward.

I look forward to hearing what the other side has to say in

defence of this incredibly flawed legislation, through second

reading.

M. Hunt: I must admit that I was hoping that there was someone from the

government side that would speak to this, but let me just start by

saying how proud I am to be able to represent my community here in this

wonderful place. When you’ve been in government, in elected positions,

for as long as I have, it’s amazing that your citizens put confidence in

you to come and take on the challenges that they face and work in

government for that. It’s a tremendous privilege to stand

here.

[3:20 p.m.]

I’ve had a number of years with the privilege of being a

councillor in local government in Surrey. I know that you, Mr. Speaker,

have had the awesome privilege in your community to be able to serve

for, well, literally decades in local government. It’s a tremendous

privilege.

Actually, one of the wonderful things about this House is that

there are a lot of us here that have come from local government. A lot

of us have come here not because we wanted to get a promotion or think

that one order of government is superior to the other, so we’re moving

our way up the ladder, but for many of us, it’s the frustrations that we

had at local government.

If I can just pause for a moment here, you realize I’m following

the former mayor of Kamloops. I believe that shortly after me will be

the former mayor of Dawson Creek, speaking to this bill. It’s because

there are a lot of us that have been very involved in this kind of work

— not only as a councillor. I also had the absolute, awesome privilege

of being able to serve on the executive of the Union of B.C.

Municipalities and had that wonderful privilege, for five years, of

going through the process of being on the executive and, ultimately,

being the president of the UBCM. It’s an absolute….

I’m going to come back to that, because I think it’s very

important that we check the legacies out. I realize that there are a lot

of individuals here who have not been around as long as I have for some

of these things. Now, I know that some have actually been in this House

for a considerably longer time. But, you know, it’s one of the things

where the more we see life, the more we see life repeating itself.

Unfortunately, I forget who stated it, but it says that if we don’t

study history, we’re doomed to repeat it.

One of the things I love about local government is that in local

government, we can go in with all of our different perspectives, our

different ideas and our different political philosophies. We put forward

our opinions, and through debate in council, we come up with

legislation, rules for our city, which we live by. We work together,

with each of us bringing a perspective to the table and building on

that. Unfortunately, that has not always been the reputation of this

House over here in Victoria — particularly, obviously, between the two

sides of the House, or the three parties, but also in the process of

actually getting work done.

There’s also a tension between the local governments and Victoria.

I can go back to the 1990s as an example, where we used to have

unconditional grants. The province had this arrangement with local

municipalities to help to finance them, because we shared the bounty of

this province in unconditional grants. Well, in the 1990s, that all

disappeared.

I was listening carefully to the member for Saanich North and the

Islands, who is also the current Leader of the Third Party. I listened

to him talking in recent terms about, again, some of the challenges,

some of the downloading, the tensions between local government and

provincial government and recognizing that part of our job here is to

enable, help and assist the local governments to do their job so that we

can have good government and that we can get good things happening in

the midst of our cities in our province.

The minister was speaking to Bill 10 here that is before us. As

she was speaking to it, I noticed that she said that this piece of

legislation is for large urban centres. But then when the issue was

raised in question period, she said that she can’t go along with a

private member’s bill and that she had to reject it because of Whistler,

the Cariboo and Fort St. John.

Well, Whistler is unique. It’s the first place…. It became the

resort municipality of Whistler because of the uniqueness of Whistler.

We recognized Whistler is unique. So I will give that, as Whistler…. But

we deal with special legislation for them, to deal with that. Cariboo?

There’s no municipality called Cariboo. It’s a very large region of,

actually, small places. I don’t know where in the Cariboo she was

referring to.

[3:25 p.m.]

Then she said: “And Fort St. John.” Well, actually, I’ve been to

Fort St. John. If my memory serves me correctly, there are two buildings

that are six storeys high. Those are the tallest buildings in Fort St.

John. As a matter of fact, we’ve been in communication with the mayor

concerning this whole issue of dealing with the unused airspaces and the

taxation of that. The mayor says: “I don’t think land values are high

enough to value airspace.” So I don’t know what the minister’s challenge

is with Fort St. John and how the whole private member’s bill can’t be

used for Fort St. John. I don’t understand that at all.

But having served on the UBCM executive, one of the interesting

things that happens at the UBCM is that the UBCM is bound by previous

resolutions. The executive just doesn’t get to go off and say whatever

they want to say or talk about whatever they want to talk about. They

are bound by previous resolutions of the memberships, which, at my time,

was 183 municipalities. I think it’s something like 189 now or something

like that — some such number.

But let me just go to the resolutions from 2019. This was the end

of September 2019. Let me deal with the resolutions that were passed by

the UBCM. This is representing all of the municipal government officials

in this province of British Columbia.

Interestingly, the first resolution they had was an SR, which is a

special resolution put forward by the executive. Interestingly enough….

And these are all public documents. I’m not giving anything that’s

secret or confidential. This is all publicly debated resolutions. It

says:

“Whereas

section 2 of the Community Charter acknowledges that

consultation on matters of mutual interest is a key principle defining

the local-provincial relationship, recognizing that citizens of B.C. are

best served when both orders of government respect each other’s

jurisdictions and work together, and

whereas recent examples of

provincial processes and programs affecting the land base have not been

conducted in a manner consistent with the principles espoused by the

Community Charter, therefore

be it resolved that the provincial

government ensure that the principles of mutual respect, consultation

and cooperation as outlined in

section 2 of the Community Charter are

adhered to and implemented as it moves forward with future

initiatives.”

Now, that was September of 2019 — not that long ago. That, of

course, was endorsed. The resolutions committee, in fact, said that

they’re bringing this forward in response to members’ concerns about

some of the new provincial processes and programs that have come forward

that do not reflect the key principles outlined in the Community

Charter. Then it lists a few of the different challenges that they’re

facing.

But as recently as this last September, the most recent UBCM, the

members of the Union of B.C. Municipalities, are saying to the

provincial government: “Please consult with us. Please talk to us,

because you’re implementing things that affect us that you’re not

talking to us about.”

Then let’s move a little bit later in that week, as we get into

the resolutions — resolution B78, to be precise, the title of which is

“Support for small business and creation of non-residential subclasses

in property tax assessment.” This resolution was, in fact, put forward

by Port Moody, and in fact, there was debate on this. The debate was

such that there were amendments made to it. But before I get to the

amendments, let me just talk about what had previously

happened.

Here are the comments from the resolutions committee as they spoke

about this to the members of the UBCM. It says: “The resolution

committee advises that the UBCM membership has not previously considered

a resolution calling on the provincial government to create new

assessment subclasses for small businesses to allow local governments to

apply differentiated non-residential property tax rates to smaller

businesses and cultural hubs.” So this had not been discussed

previously, or this particular solution had not been discussed

previously.

[3:30 p.m.]

However, the committee notes that the membership has endorsed a

resolution in 2018, which was B115, that sought relief for small

businesses through provincial assessment reform. It also further notes

that the membership endorsed, in 2018, B114, which sought new assessment

subclasses in order to address, in this case, housing

affordability.

The issue, the concept, the problem, the challenge had been

brought up previously in 2018. So here we go into 2019. And what

happens? We get an amendment to the resolution.

[R. Chouhan in the chair.]

Here’s what was endorsed and passed by the UBCM at its September

2019 conference. It said:

“Therefore

be it resolved the province…work with municipalities to

make the necessary legislative and regulatory changes to enable

implementation of the ‘split assessment through a new commercial

subclass’ approach in time for 2020 to enable municipalities to lower

commercial property tax rate on properties where development potential

has made it difficult to operate and provide the much-needed relief for

smaller businesses and the arts, culture and non-profit

sectors.”

That’s the resolution that was passed. The resolution from the

UBCM was very, very specific. No doubt, this was in response to the

Intergovernmental Working Group and their recommendations that were put

forward saying that a split assessment was the best way to deal with

that.

Now, just so that we understand what we’re talking about here….

What we’re saying is this. Let’s take a commercial building. I’ll put

this in downtown Surrey, where we have…. In the city centre, we’re going

to have a building…. Well, I know what I’ll do. Let’s use 3 Civic Plaza

as an example of this. For those of you that are well familiar with the

city of Surrey, you have the main city library, you have city hall, and

you have this big tower right beside the SkyTrain station. That is 3

Civic.

It is three things in one. It is a hotel, it is a residential

property, and it is KPU. Kwantlen Polytechnic University has five floors

of their campus there. So you’ve got one building with three uses in it.

How is that property taxed? Well, the property is taxed based on the

different uses within the property. So it isn’t one tax bill for the

entire property. Rather, there’s a tax bill for the residential part,

which is taxed at a residential rate. There’s a part that is dealing

with the university, which is done at an institutional rate. There is

the hotel, which is taxed at the hotel rate.

If there was other commercial or whatever, the assessment is

broken up. These are what are called subclasses. On a piece of property,

there can be these different categories, and they’re taxed according to

appropriate rates, which everyone has agreed is a fair and reasonable

way to assess.

Now let’s take that to a property…. Let’s take it a block or two

away from 3 Civic. Oh, I know. What we could do is…. Let’s go to the

roller rink across the street. Okay? What used to be the roller rink is

now in the development process, but we’ll use that as the illustration.

We had the roller rink, which was simply one floor of commercial use,

and then there was nothing above it. Because of what is happening in the

city centre of Surrey, there’s the potential for a large highrise to be

there. As a result, the assessment that has been put on that property

is…. Oh well, it’s really not reasonable.

Again, we’re supposed to be taxing them according to their

assessed value, which is approximately market value. What is the market

value of that roller rink? Well, that roller rink, that building by

itself, really isn’t worth an awful lot. The land is what’s really the

value. It also has a value based on what could go in up above it, all

the potential future airspace and what could done.

[3:35 p.m.]

That’s where the problem lies. You’ve got this little roller rink

that is just a roller rink to keep kids off the streets, keep them

occupied, keep them learning some skills, a bit of athletics, a social

place. They’re being charged taxes as if they’re a 30-storey commercial

building, which is absolutely and utterly absurd.

The proposal is to make two different classes — a subclass, where

you can have the airspace as just that, an airspace. So whether the use

is the single-storey roller park, whether we’re dealing with the

three-storey office building or whatever it is, B.C. Assessment can go

in and very clearly articulate what is the value of that airspace, that

part that hasn’t been built at all.

That’s the challenge that was before us. That’s the problem that

the municipalities want to see addressed. The problem is the bill that

we have before us, Bill 10, is not what small business asked for. It is

not what local governments asked for, because the local governments

asked for action on that unused airspace.

But what do we have? Well, what we have is this convoluted thing,

where basically the NDP government has simply come up with a solution

that is not a solution. It requires businesses to go and lobby their

local government to get an exemption. I would note that in — what is it?

section 20 of the bill, it says that this is going to be done by

permissive tax exemptions.

Well, those of us that come from local government know the huge

challenge we have in the fall of every year, where we get this massive

pile of paper sent to us which is dealing with statutory and permissive

tax exemptions.

For the people who are watching this, who don’t know what that is,

that’s…. In about September or October of every year, there is a whole

list of addresses in the newspaper. For the city of Surrey, if my memory

serves me correctly, it’s about two or three complete pages of the local

newspaper where these addresses are all specifically listed for

permissive tax exemptions for various and sundry different reasons. It

could be a daycare. It could be a home that’s dealing with abused women.

Or it could be this, that or the other thing. There are lots of

different reasons for doing that.

What you’re going to have, Mr. Speaker, is page after page after

page in the local newspapers listing each and every address of each and

every commercial building that’s got to get this dealt with. Based on

what? Not based on the building and what’s going on. It’s based on the

lease agreement that you have with the owner. Well, what about those

not-for-profits, those arts and culture pieces?

Oh my, let’s think about the city of Surrey. In the city of

Surrey, we have arts and culture groups that have their own property.

Someone gave it to them. It was bequeathed to them. Normally we’d say:

“Isn’t that great? Wonderful.” Well, this bill says: “No, no, no, no,

no. Not so fast. You don’t get out of it.” So we’re making winners and

losers.

If you happened to sign an agreement that was a triple-net lease,

you’re a winner. If you didn’t sign that kind of a lease and you got

some other kind of arrangement with the property owner, you’re a loser.

If you happen to own that property, you’re a bigger loser because this

doesn’t give you anything.

This is crazy. Talk about inequity. Talk about being unfair. This

is absolutely ridiculous.

Then, of course, like I said, you’ve got the municipality having

to scurry around all their…. Well, it’s going to go one way or the

other. Either the municipality has got to try and scour all of their

assessments, all of their properties to find out which ones try and put

them on here and be fair about it, or it’s going to be the other that

says: “Well, you’re going to have to lobby us; you’re going to have to

bring it to our attention.”

Now, in a place like the city of Surrey…. We can pick on

Vancouver. We could pick on Burnaby — any of the larger municipalities.

Can you just start, Mr. Speaker, to imagine how much work this is going

to be?

[3:40 p.m.]

It’s not like municipalities are so overstaffed that they’ve got

people sitting all over the place just waiting to find some work to do.

The people in local government are busy. They’re already overtaxed and

overburdened and busy doing their stuff. But now we’re going to sit

there, and they’ve got to run around and try to find out what kind of

lease you have. “Do you have a triple-net lease? What about

you?”

This is absurd. The amount of work that’s involved in this is

absolutely crazy. But it isn’t dealing with the problem of the airspace,

which was the problem that they were asking to deal with. If you get

into this formula that we have, the formula gets you to get an exemption

on the basis of a percentage of the property tax that is eligible based

on this weird formula that is dealing with a past year’s taxes and where

you are. It is so unbelievably complicated — for what reason?

It’s really simple. If they simply went to split assessment,

split-class assessments, it would be easy. It would be very functional.

It would not create winners and losers. It would treat all businesses

the same. Isn’t that ultimately what we want? We want our taxation

systems to be fair to everyone. This is a permissive exemption, which

means lots and lots of work.

What have people been saying about this? What have the responses

been? Well, I would note that the chief financial officers of the city

of Vancouver, city of Burnaby, city of Coquitlam, city of North

Vancouver, city of Richmond, city of Surrey, city of West Vancouver…. If

we take those cities, we’ve got the majority of the businesses in the

Lower Mainland. I would almost say that we might have the majority of

businesses in the province of British Columbia that are having this

problem, because contrary to what the minister said, this isn’t a

problem in Fort St. John. It’s not. The mayor told us so.

The Lower Mainland chambers of commerce have said this. The boards

of trade have said this. It keeps going on and on and on. All of them

say that they support the UBCM resolution and the UBCM solution to the

problem. They don’t support what is before us.

We can go on. We’ve heard it before. We’ll hear it again. The

mayor of North Vancouver: “For too long, this issue was unaddressed by

provincial government.” Well, there’s a reason why it was unaddressed. I

can tell you that when I was in local government, which was only six

years ago — I know, for some of the members of government, they think it

was much longer than that, but only six years ago — this was not a

problem in the city of Surrey. This was not on the radar in any way,

shape or form.

Maybe it’s because of the way that we do zoning and we do our

local community plans. I’m not sure why it wasn’t a problem back then,

but it wasn’t. It wasn’t a concern to us at all. But now it has become a

concern. She goes on to say:

“The proposed legislation will fail to alleviate the burden small

businesses in the city of North Vancouver are feeling. The proposed

changes won’t allow us to target businesses who are disproportionately

being affected by property value and could even possibly result in tax

relief for large international companies. I’m disappointed that the

province hasn’t delivered a more community-oriented and workable

solution as recommended by the intergovernmental working

group.”

Oh, that’s right. The intergovernmental working group. Now, wasn’t

that the group that the minister and the ministry set up with the Union

of B.C. Municipalities and brought other stakeholders in to so that they

could all get input and come to a solution? How is it that once again,

we find this government goes through a process of consultation to stall

and delay things and then doesn’t even listen to them? Doesn’t even

listen to them.

[3:45 p.m.]

What about a councillor from the city of Vancouver, Sarah

Kirby-Yung? She says, “It would require literally each municipality to

go through thousands of different properties and determine who would be

eligible. So there’s a lot of room for inequity, and also

administratively, it’s almost impossible to achieve” that

equity.

She goes on and says that this is dealing with “a patchwork of

regulations” and development that would happen and that the taxation

should be “predictable, consistent and equitable,” which is not what we

see here. She said: “It’s a tool that’s not going to yield the results,

and it’s probably less likely be used.” I would argue that

municipalities most likely won’t use it, because it’s just simply too

cumbersome. They will wait for a real solution that actually can make a

difference. “It’s not going to be feasible because it’s not going to

deliver the benefits that we anticipated and that we want.”

Again, the minister is from the city of Coquitlam. She used to be

a councillor in the city of Coquitlam, and even a councillor from the

city of Coquitlam is saying it is a disappointing outcome to nearly two

years of work by a joint task force — cities told there’s “not enough

time” to bring a proper solution. So we’re forced to try and implement

this dog’s breakfast in less time, no access to the information needed

to determine qualifications.

We can go on to those from West Vancouver. Delta has exactly the

same problems. We can just keep going on and on. But you know, it’s not

like this is something new. The minister had this. There was an open

letter written on September 23. It begins: “Today marks the first day of

the Union of B.C. Municipalities convention.” I’m going right back to

the resolutions that I talked about at the very beginning.

What is the theme? The theme is resilience and change. To start

the dialogue, several large businesses and arts and culture stakeholder

groups “are calling for your government to take bold action to help

small businesses struggling to survive massive property tax

increases.”

It goes on:

“The policy on the table that has been endorsed by the

municipalities, the business community and the arts community is the

creation of a new commercial property ‘subclass.’ This will allow

municipalities to tax the unbuilt development potential above businesses

at a rate lower than the current commercial rate. We urge the government

of B.C. to take the immediate steps needed to provide municipalities

this tool which can provide real, targeted tax relief to those small

businesses which are the most impacted, in time for the upcoming tax

year.”

This was September 2019. This was actually before the fall

session that we had. Hmmm.

“When this proposal is discussed during UBCM” — and by the same

token, we now know it was approved with amendment — “we expect that

there will be significant municipal support,” which there was. “By

giving this optional tool to municipalities, the government of B.C. will

demonstrate to local governments, the business community, the arts and

culture community, and to the public that it recognizes the problem

facing our local business owners, and it has taken action by allowing an

option that will help them thrive.”

Then it goes on to quote the mayor of Vancouver, who is not

exactly on the other side of the political fence from the current

government. But this is signed by the Vancouver Business Improvement

Authority, the B.C. Alliance for Arts and Culture, the Greater Vancouver

Board of Trade, the B.C. Chamber of Commerce, Great Northern Way, Scene

Shop and Arts Factory Society, the Federation of Independent Business,

Urban Development Institute, Pacific Region, the National Association

for Industrial and Office Parks and Vancouver building owners and

managers and associations.

There is a tremendous amount of support for a split-class

assessment. There is zero — zero — support for the proposal that is

before us. The minister…. Where is she getting her endorsements from?

Her endorsements are nonexistent.

I see my time is up.

M. Bernier: It’s an honour to stand up and speak to this, following my

colleague from Surrey. It’s unfortunate. It seems like the government

doesn’t want to stand up, so it continues to be members from this side

of the House standing up speaking to Bill 10.

[3:50 p.m.]

It’s unfortunate, because we’re hearing of all of the impacts that

this is going to have, specifically on Bill 10, on local

governments.

Now, let me just start by saying I want to thank the member for

Kamloops–South Thompson for a couple of things that he’s done

specifically around this important issue. He’s been meeting with local

governments. He’s been meeting with affected stakeholders. He did

analysis over the last couple of years and brought forward a

well-thought-out private member’s bill a year ago, last year, in 2019,

that could have helped address this situation.

What’s even more important with that private member’s bill that

came forward was that it actually had solutions in there that local

governments, small business, communities were asking for. They were

asking for help. Over the last couple of years, assessments have been

skyrocketing, and there’s nothing worse than having to pay taxes on air,

taxes on something above your head that you’re not even

using.

It seems to be a theme with this government of looking for

opportunities to tax whatever they can. Maybe if you shot a Netflix show

up into the air above you, it’s a double tax now, I guess. But the

government, instead of listening to the actual information that was

being presented in front of them of solutions that could actually help

small business and help communities, ignored it.

Now, I know government in this specific situation would not want

to look at a private member’s bill put forward that actually would have

solved a legitimate problem that was trying to be solved. It could have

been a perfect example of what this government likes to tout of working

together with all sides of the House to solve a problem. Again, they

completely ignored what they like to preach.

I think the member for Kamloops–South Thompson, after all the work

he’s done on this, would have been more than happy for them to take his

bill, reword it — whatever they had to do —pretend it was theirs and put

it forward last year and start solving the problem. We would have been

okay with that. I know the member would have been okay with that because

it would have been addressing the issue that people were asking to be

fixed.

I can tell you as a former mayor, nothing would irk me more than

something like this, where government has put forward a bill to say

they’re trying to solve a problem, when in fact all they’re doing is

trying to change the problem to somebody else’s problem.

What they’re trying to do…. You can see it, basically, black and

white in this bill. The minister wants to be able to point to this in a

year f