Manitoba Committee Hansard — 3 January 1990 (Management Commission Committee, Sitting 8, 34th Legislature, 2nd Session)

34-2-ma8

Manitoba — Debates (Hansard)

lEGISlATIVE ASSEMBlY OF MANITOBA THE STANDING COMM ITTEE ON MUNICIPAL AF FAIRS Wednesday, January 3, 1990 TIME - 10 a.m. LOCATION - Winnipeg, Manitoba CHAIRMAN - Mr. Edward Helwer (Gimli) ATTENDANCE - 11 - QUORUM - 6 Members of the Committee present: Hon. Messrs. Cummings, Findlay, Penner Mr s. Charles, Me ssrs. Har per, Helwer , Pankratz, Patterson, Plohman, Roch, Taylor APPEARING: Mr . Henry Wiebe, Manitoba Association of Urban Municipalities Mr . Sieg Peters, Councillor, Rural Municipality of Hanover Mr . Les Sch roeder , Rural Municip ality of Hanover Mr .

Aron Friesen, Reeve, Rural Municipality of Hanover Mr . Richard Borotsik, Mayor, City of Brandon Mr . Robyn Sin gleton, Solicitor , City of Brandon Ms. Brenda Leslie, Manitoba Association of School Tr ustees Mr. Brune i Jutras, Rural Municipality of Montcaim Mr. Jake Schroeder, Reeve, Rural Municipality of Rhineland Mr. John Gi esbrecht, Reeve, Rural Municipality of La Broquerie Mr . Bill Martens, Rural Municipality of Morris Mr . Francis Benoit, Reeve, Rural Municipality of Ste. Anne Mr . Fern Berard, Reeve, Rural Municipality of De Salaberry Mr . Charles Chappeil, Private Citizen Mr .

Kenneth Emberley, Private Citizen Mr. Tony Dalmyn, Manitoba Home Builders Association Mr . Ga rry Grant, Private Citizen Mr. John Petrinka, Private Citizen Mr. Taras Lasko, Private Citizen Mr . William Manchulenko, Private Citizen Mr . Philip Fontaine, Assembly of Manitoba Chiefs Mr. Don Melnyk, Manitoba Association of Urban Municipalities Ms. Doreen Demar e, Councill or , City of Winnipeg Committee Representative 184 WITNESSES: Mr . Rob Walsh, Grown Counsel (Legislation} Val Per ry, Cr own Counsel (l egi slative Counsel's Office) Ms. Ann Bailey, Grown Counsel (Leg islative Counsel's Office) Ms.

Dianne Flood, Crown Counsel (Civil Legal Services) Mr . Bob Hamm, Land and Prop erty Cl assification Co-ordinator, Rural Development Ms. Anne Fuller, Manager , Administration, Rural Development G. Forest, Dep uty Minis ter, Rural Development B. Brown, Provincial Municipal Assessor Mr . Laurie Evans, ML A (Fort Garry) MATTERS UNDER DISCUSSION: Bill No. 79-The Municipal Assessment and Consequential Amendments Act. *

(1005) Mr. Chairman: The Committee on Municipal Affairs is called to order. We last met on December 21, 1989, at a p.m. to consider Bill No. 79, at which time we heard public presentations. I have before me a list of persons wishing to appear before the committee today. The list reads as follows: Mr. William Manchulenko, Mr. Philip Fontaine, Mr . Homer Gill, Mr . Henry Wiebe, Ms. Brenda Leslie, Reeve Aron Friesen, Mr . Sieg Peters, Mr. Kenneth Emberle y, Mr . Charles Chappell, Mr. Brunei Jutras, Mr. Richard Borotsik, Ma yor of Brandon, Mr.

Bill Martens, Reeve Francis Benoit, Reeve Jake Schroeder, Reeve John Giesbrecht, Reeve Fern Berard . Should anyone else wish to appear before this committee whose name is not recorded please advise the Committee Clerk and your name will be added to the list. The Committee Clerk is here. Is there anyone that. would like to-yes, Mr. Lasko, is it? Mr. Taras Lasko (Private Citizen): That is right. I was not prepared the other day. That is what I mentioned, and I said I would like to present my brief at a later date. So that is why I am here today. Mr. Chairman: Yes, I believe we have two people, Mr.

La sko, you and Mr. Kuzminski, who have written presentations? j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j I

Wednesday, January 3, 1990 Mr. Lasko: That is right Mr. Chairman: What is the will of the committee? Do we want to hear them again or do we want to receive their written presentations-if Mr . Kuzminski and Mr. Lasko could present their written presentations, we will certainly consider their comments, or if they they would like to speak today they would have to be the last on the list. Is that okay? Agreed. I understand there are a number of out-of-town presenters who would like to make presentations as early as possible. If these people are present, would you please identify yourself?

Please stand-the rural presenters. I understand, Mr. Borotsik, you would like to leave early, is that correct? Mr. Richard Borotsik (Mayor, City of Brandon): If I could, Mr. Chairman, I would appreciate it. I do have some Members that are some of your colleagues of Brandon that I would like to say hello to if I might. Mr. Chairman: Who are the other gentlemen? An Honourable Member: Henry Wiebe. Mr. Chairman: Henry Wiebe, Jake Schroeder. Who else did we have that wanted to present early -John Giesbrecht, Mr. Brunei Jutras, Mr. Peters of Hanover? What is the will of the committee?

How do we want to hear them first-Mr. Findlay. Hon. Glen Findlay (Minister of Agriculture): Yes, let us hear them in the sequence they are in- out-of-town ones that have been identified, starting with Mr. Wiebe, that is the top one. Mr. Chairman: Is that the will of the committee? Okay, then before we proceed with the first presenter I would like to ask if the committee would like to adjourn at a specific time today. Normall y, committee meetings run from 10 till 12:30.

However, we have approximately 16 people, 1 believe, registered to speak today, I am not sure if we will be able to hear all presentations in two and a half hours. What is the will of the committee Mr. Penner, Mr . Minister. * (10 10) Hon. Jack Penner (Minister oi Rural Development): Would it be possible, Mr. Chairman, to hear as many as we can before lunch and then break at twelve o'clock for lunch for an hour, an hour and half, and then reconvene, for an hour and half lunch break and then reconvene, at 1:30 -(interjection)-12:30 to 1:30 are we agreed on that? So we will break for an hour then. Mr.

John Plohman (Dauphi n): Mr . Chairman, depending on the situation, and how many are left at that particular time, we had agreed to a five o'clock adjournment I believe in previous discussions for this meeting in writing. So at that time I think we should determine whether we want to make any changes to that agre ement. 185 Mr. Chairman: Mr. Taylor, did you have any other comments? Mr. Harold Taylor (Wolseley): No, Mr. Chairpers on, was the same point. I think we should call a decision as we approach five o'clock. Mr. Chairman: Okay-Mr . Findlay. Mr.

Findlay: Would it be the committee's will then if we do not complete the presentations by five o'clock, since people are here, to reconvene at 6:30 and continue? Mr. Plohman: Well, I think once again, Mr . Chairman, I believe we should, as five o'clock approaches, decide on what we will do for the evening. We may want to go for another hour and complete then or we may want to adjourn and come back later or whatever. Perhaps even, depending on the situation, hear some of them on another date. Mr. Chairman: Okay, thank you, Mr. Plohman. So that is the will of the committee.

We will break at 12:30 and reconvene at 1:30 again. Okay. For the presenters, if you have a written presentation we would like 15 copies for all the Mem bers of the committee here. When you come up, if you would just bring them forward-the Clerk would like them now. If any of the presenters have copies, please bring them forward now. If you need copies made, I think we can get some made. We will start with our first presenter-that will be Mr. Henry Wiebe and Mr. Homer Gill from the Manitoba Association of Urban Municipalities-M r. Findlay. Mr.

Findlay: Would it be desirous to attempt, as much as possible, to have each presentation made within 20 minutes to half an hour, as much as possible? Mr. Chairman: What is the will of the committee-Mr. Plohman. Mr. Plohman: Mr. Chairman, we have not put any time limits. I think we should try to do that, but I do not think we should have any hard and fast rules. Mr. Chairman: Okay. I would like to ask all presenters, though, to be precise and to the point with their presentations because we have a lot of presentations to hear today.

At the same time we want to give everyone an opportunity to question any of the presenters also. So we will start with our first presenter, Mr. Henry Weibe, and Don Melnyk, the Reeve of East St. Paul. Okay, Mr. Wiebe. Carry on. * (101 5) Mr. Henry Wiebe (Manitoba Association of Urban Municipal ities): Thank you, Mr. Chairman, ladies and gentlemen. I would like first of all to offer the apologies of our president. He was unable to be here today. Homer

Wednesday, January 3, 1990 Gill was not able to be here today so he asked me to make the presentation on his behalf. As already mentioned I have here with me two members, two vice presidents, second-vice president Don and third vice president Doreen here from the Manitoba Association of Urban Municipalities. Starting on page 1 with a brief

summary, would simply like to say that the association has been a strong supporter of changes to The Asses sment Act in Manitoba. Our studies and our discussions on this issue spans the whole period of the'80s, of the decade of the'80s. From the establishment of the Weir Committee until the introduction of Bill No. 79, we have been involved in this discussion.

The key aspects that we would like to address today are as follows: the equity that is being proclaimed within the new legislation; the question of school taxes, or the removal of the Educational Support Levy, better said; the consistency that we hope will result out of this, we know will result out of this legislation; and the urge ncy, the need for imme diate passage of this legislation. Page 2, Assessment Reform Understanding: the Mani toba Assoc iation of Urba n Municipal ities represents the cities and towns and several villages of the Province of Manitoba.

There is strong support for the asses sment reform legislation within our membership. We have had ample opportunity to discuss this legislation at board level and at area meetings of our association. Today the executive of MAUM wishes to address the key issues of the reform legislation. There is no doubt that a complicated tax reform Bill will require some amendments once we have made practical application of the changes foreseen in this legislation. We are therefore of the opinion that the Bill should be proceeded with forthwith to allow municipalities to move on with the changes for their 1990 budgets.

In this short document we will briefly address some of the reasons we have for our support and the need to proceed with the legislation expeditiously. The question of equity: the present assessment system has always been difficult and it has been hard for the average taxpayer to understand it. Since there was little in the assessment approach which related to the market value of the property, the taxpayer had no way of relating the assessment to real value. Real value taxpayers' mind should be and is market value.

Value we believe or true value of ""''"'"'"" the average taxpayer with a understanding of the basis for tax assessment. The new legisla tion and the application of comp uter technology brings us with this legislation into the 21st century. Updates: with market value as a goal and the computerization of the assessment system, complete and continuous update becomes a reality. Under the old archaic system municipalities were not reassessed a regular basis. Thus we experienced inequities in school divisions where one municipality was assessed 186 and a second or a third was not assessed assessed at a different time.

Changes had not been brought to the same level of value Even though this inequity was addressed through the balanced assessment it never really addressed the question adequately. School Taxation: The exemption of farm land from the provincial education support levy is. long overdue. The principle that all the residential structures and other farm buildings should be subject to taxation helps to bring fairness and equity into the system. limiting the exemption for schools and hospitals to 10 acres is also a reasonable approach.

The exemption of registered non-profit day care centres from taxation recognizes what, in fact, was being done in many cases even now, a grant was given back to the day care centre to cover these taxes. The question of consistency-this will be one statute for the whole province. This new Bill places all of Manitoba under the same statute. This will help simplify taxation approaches and create a better understanding by the taxpaying public. *

(1020) Exemptions will also be the same throughout Manitoba. This provides equity and fairness to the taxation process. The present Municipal Assessment Act exempts lands held in trust for band or tribes of Indians. Under the new Act this is deleted, and the new legislation is consistent with the present City of Winnipeg legislation. This matter has been a gr eat concern to several of our member municipalities. Our board has made several presentations on this issue to Government. We are pleased to have this change effected to cover all of the Province of Manitoba.

The Need for Immediate Action: The old system of assessment is archaic and requires a complete overhaul. The Mani toba Association of Urb an Mun icipalities supports the thrust of Government to effect changes now and proceed with reform as expeditiously as possible. Financial: Municipal Governments in Mani toba have shown their strong support for this legislation by contributing approximately 50 percent of the cost of this reform. By the time Phase 11 of the system is completed we will have contributed some $4 million to this project.

Urgency: The executive of MAUM has concern that the investment of large sums of money in the development of a new assessment system should be recognized. This system must be in place for the year 1990. We are in 1990 now and need this legislation in place to do our financial planning and our budgeting for this year and our longer term planning for the next decade. Tax Notices and Budgets: The time is now here to proceed with municipal budgets. Our tax notices and assessment notices need to be printed and mailed to the taxpayer. Further delays will also slow up the

Wednesday, January 3, 1990 budgeting process. The approval of this legislation is already overdue. The time to act is now, in the present. In

summary, then ladies and gentlemen, I thank you for giving the Mani toba Associ ation of Ur ban Municipalities the opportunity to speak to this very important issue of tax assessment reform. We consider Bill 79 to be one of the most important pieces of legislation for Manitobans at this present time. The passage of this Bill into legislation is a br ave and courageous step for legislators. We congratulate you for making this reform possible. Thank you for listening and for your attention. Respectfully submitted by Henry F. Wiebe, first vice president of the the Manitoba Association of Urban Municipalities.

Thank you gentlemen and ladies. Mr. Chairman: Thank you very much, Mr . Wiebe. Are there any questions from the Members here to Mr . Wiebe? Mr . Plohman. Mr. Plohman: Thank you Mr . Chairman. Mr . Wiebe, I understand from your presentation that you might admit there are some faults with this Bill or there will be some faults found but we should go ahead and pass it anyway and make changes later on. Is that correct? Mr. Wiebe: I do not know whether I would use the word "faults." Within this legislation there are some housekeeping items to be done. Mr. Chairman: Okay, go ahead. Mr. Wiebe: I am sorry. Mr.

Chairman: Yes, in order to get our sound system properly recording here if you would just wait until I recognize you. Mr. Wiebe: Oh, I am sorry. Mr. Chai rman: lt is okay. Ar e you fin ishe d, Mr . Plohman? Mr. Plohman: Mr . Chairman, I imagine that answer was on the record. What Mr. Wiebe said was that he believes there may be some housekeeping amendments. Mr. Wiebe: Yes, I think there would be. Mr. Plohman: Does Mr . Wiebe have any analysis of the Bill from the urban association to give us any advice on some of those that he feels might be necessary? Mr. Wiebe: No, I do not think I have any specifics.

We have care fully reviewed and we feel some of the things might only come out once the Bill is in practical application within the whole province. Mr. Plohman: Mr . Chairman, Mr . Wiebe talks about market value approach and says that the system should be based on market value. Is this his understanding of what is being done in this Bill? Mr.

Wiebe: Well, we are aware that the present market value year chosen is 1985, but we also believe that the 187 computer system that has been developed has the capability of changing the market value more often than three years, which is now suggested in the Bill. lt could be done every second year or maybe every year if that becomes necessary. *

(1025) Mr. Plohman: The assumption is this is market value that we are dealing with rather than a value determined on the basis of some updating application of some formula that it is based on a realistic assessment appraisal of the property based on 1985 market values. Mr. Wiebe: That is right. Mr. Plohman: Okay. We will have an opportunity to discuss that further with the Min ister. I would hope that is the case as well, but we are not necessarily convinced. I would like to ask as well about hospitals. Mr . Wiebe mentions that 10 acres is a reasonable approach for hospitals.

Is he basing this on an exemption for most rural hospitals, or does he recogn ize that there are some hospitals that will not be totally exempt by this new figure? If most hospitals in the province are going to be exempt, does it not make sense to exempt them all totally? Why should some hospitals have only partial exemptions and the majority have total exemption? Mr. Wiebe: I suppose the question of the acreage is to a large degree a matter of the local hospital board's decision.

In one case that I am aware of where a hospital is being planned they are looking at quite a bit more than 10 acres, but they have their specific reasons for doing so. The actual operation though, 10 acres would be ample for them. So if they choose to have more because of certain other aesthetic reasons then maybe they need to pay a little bit of tax on that portion. Mr. Plohman: Well, Mr . Chairman, it seems that it is more than aesthetic reasons.

We have heard from the admin istrators of a number of hospitals in Winnipeg particularly who have asked for a change to this provision because it is an arbitrary provision that does not provide them with complete exemption, although others are completely exempted because of that figure. Has the urban association looked at that issue? Mr. Wiebe: We have not discussed the issue with regard to the city hospitals, no. Mr. Plohman: So I might just assume that perhaps the urban association might be amenable to some changes then. Mr. Wiebe: Yes, I do not think we would have any problem with that. Mr.

Piohman: just want to ask a couple more questions with regard to the education tax exemption. Is it the urban association's position thr�t fe'lrm land should be exempted from all school tax and this is a good first step, or is it the intention of the urban association to push for exemption from local levies for school purposes on farm land as well?

Wednesday, January 3, 1990 Mr. Wiebe: I think this is a good start. We certainly applaud the fact that this portion of the school tax will be removed from farm land. That is one of the changes that might be considered later on once we walk with the legislation and have tried it out, we might want to see some different changes. Mr. Plohman: Mr .

Wiebe, does the urban association feel that there is some validity to the proposal by the Weir Commission to have a two-value system for farm land, one that would be based on agricultural value and one based on the value of that land for market value based on development that might be made on that par ticular property, particularly in the areas surr ounding urban areas? Mr.

Wiebe: We have addr essed that question with regard to land surrounding urban areas. lt was the feeling in our discussions that in most of the cities and the towns the lands were held in abeyance or held in sort of an agricultural zoning until the actual development set in. At that point of course the taxation would take effect. To assess the land on the basis of future development is pretty risky. Mr. Plohman: Mr. Chairman, that is not what I was suggesting.

A two-value system would be based on the current agricultural value of that land through the use of a number of factors such as productivity of that land and so on. Another would be based on the actual market value at that particular time for industrial purposes based on comparable properties in the area. If the use of that land was changed, then there would be a retroactive assessment of taxes based on the higher value, but as long as it was used for agricultural purposes it would be taxed on the lower assessment for agricultural purposes. *

(1030) That is what Weir recommended in his report, and I just ask whether you feel that would be a fairer way of assessing land that is under development pressure and would provide an incentive to retain it in agricultural use rather than encouraging people to sell it off for development purposes. Mr. Wiebe: You use the word retroactive. What did you mean by that? Mr. Plohman: What they said, Mr.

Chairman, is that if the use was changed and was in fact sold at the higher value, then there would be a five-year period of collection retroactively of taxes based on that higher assessment for industrial use or reside ntial use or whatever it might be. Mr. Wiebe: I would believ e that most of our communities would not like to see the retroactive system go into effect. I think in our smaller communities, towns and smaller cities, the ind ustrial dev elopment is something that we realiy want to encourage and that would discourage it. I do not think that we would like to see that. Mr.

Plohman: Am I correct in assuming that the urban association has not developed a position on this issue? 188 Mr. Wiebe: No, we have just discussed and we have not put forth a position on iL Mr. Plohman: Would Mr. Wiebe feel that it is fair that land that is perhaps under pressure, there are some examples that we have been given where it is being taxed at $75 an acre,

whereas surrounding agricultural land is being taxed at $7.50, 10 times as much, because of the artificial increased value of that land because of industrial pressures. Is that fair that a person farming under those circumstances should be paying that higher taxation based on the industrial value of that land? Mr. Wiebe: I would likely be expressing a personal opinion, but I would say it is not fair. Mr. Plohman: My last question at point, would Mr. Wiebe like to see that addressed in some way? Mr.

Wiebe: My position would be that as long as land within the boundaries of a town or a city is still used for agricultural purpose and zoned agriculture, it should remain as taxed as agriculture and only become taxable under the new subdivision when that is in effect put into place. Mr. Plohman: Mr. Chairman, just to clarify, did Mr. Wiebe say when the zoning changes or when the use changes? Mr. Wiebe: I would think those two usually go hand in hand in my experience. Mr.

Plohman: lt may be that a person speculates and has the rezoning done many years before it actually would take effect, when the actual use would change in anticipation of that being a possibility somewhere down the road. What I am asking then is, should the value then be changed immediately or should it be done when the use changes? Mr. Wiebe: I think when the use changes. Mr. Chairman: Are there any other questions? Mr. Taylor. Mr. Taylor: To Mayor Wiebe, there has been over the past while some sensitivity on assessment of large lots usually on the periphery of urban communities.

Having Councillor Demare with you from the City of Winnipeg, I think she can speak at length of the problem in this community on that matter. I wanted to know, has there been discussion within your organization about the problem of large lot assessment and making certain that there is fairness employed when that type of assessment is done, and the potential impacts from this new Act? Have you looked at that as a detailed point? Mr. Wiebe: No, I would have to say we have not looked at that. Mr. Taylor: Has the Manitoba Association of Urban Municipalities discussed as an organization the fact

Wednesday, January 3, 1990 that there is in effect a three-year freeze on assessment once th is new Act is in place and functioning? Mr. Wiebe: That has been discussed at our meetings, and I do not think we have a par ticular problem with that. In deve lopment , three year s is not a very long time . Mr.

Taylor: As a group of urban politicians, you do not see any problems coming from people who would become impacted by market changes, by something else going on on their doorstep or in the general area of their prope rty, and their value diminishing, their wishing to appeal and their being unable to appeal during that three-year window. You do not see that as potentially causing severe problems? Mr. Wiebe: I do not recall that we have discussed it from that standpoint. My understanding is that there is an initial appeal though, when the first assessment notices go out, is there not? Mr. Taylor: That is right . Mr.

Wiebe: I think at that point, the owner would have to take a good look at what his plans are for the next three years. *

(1040) Mr. Taylor: Mr. Wiebe is correct . There is the initial window to appeal. However, once that has been exercised, there is no chance of further appeal for three years . It is a form of freeze, and we have had some of that in Manitoba which is, for your information, quite a marked contrast to certain other provinces. The point has been made to us by a number of delegations, and it is why I bring it up here. That there should be no form of freeze whatsoever have been some of the positions . Other positions have been one year or maybe a two-year freeze, but not the three year.

We have heard this a numbe r of times. Some of us on the committee have then gone out and made inquiries outside of the committee and found more than a little concern on that. That is the reason I bring this question to you . I wonder what you might be encountering, you personally or any of the other members of your associations, in practical terms of dealing with constituents who wish to appeal, thought they had the right to and then did not. Mrs. Doreen Demare (Councillor, City of Winnipeg Committee Representative): I would like to say tha t this would probably be a- Mr. Chairman: Just a minute, Mrs . Demare.

Before you comment, I think the Minister would like to make a comment on this, so can you just-Mr . Taylor. Mr. Taylor: Mr. Chairperson, I addressed the delegation and I would appreciate a response from the deleg ation in advance of the ministerial statement. 189 ***** Mr. Chairman: Just a minute. The Honourable Minister, just to clarify the point. Go ahead. Mr. Plohman . Mr. Plohman: Mr. Chairman , a point of orde r here.

This is not the proper procedure for anyone, and with all respect to the Minister, it is not proper procedure to inter ject when there is questioning going on between a Member and pres enter at the c ommittee . When that has been completed , if the Minister wants to add a few comments, we have been pretty wide -rang ing in that in this committee, although that is not even standard procedure . Mr. Chairman: Okay, yes. ***** Mrs.

Demare: I would like to say that this would probably be a very reasonable approach, but the thrust from the Manitoba Association of Urban Municipalities today is-what we would like to see is that you get on with the Bill, pass it as legislation immediately and make your changes as you see fit as time permits and as the concerns arise, because there are some fairly severe implications if the legislation does not go through as with , for example, the tribal lands. That is one very serious concern.

Of course, even from your own departmental point of view, they are all set up to go with the legislation, and I think that what the Manitoba Association of Urban Municipalities is quite worr ied about is that the Bill will be stonewalled, for want of a better word, and we would like to see it moved on. Mr. Chairman: Thank you, Mrs. Demare . Mr. Taylor. Mr. Taylor: Thank you, Mr. Chairperson. I am a little surprised at that comment, quite frankly. It is not the intention of this committee or I would suggest any other committee of this Legislature or municipal committee to stonewall on legislation.

The matter before us is coming up with a Bill that is going to be functional, that is going to be eminently fair to all those who will be impacted . The point I bring out to the members of the delegation is not a little housekeeping item, it is a very profound point contained within this legislation and, I might add , contained within the legislation before us and not in the original draft as was drafted for the department.

So knowing that change has been introduced by the bureaucracy since the original drafting, we are more than a little concerned as to why it is there and how it may impact individuals in business and how it may impact you in your admin istrations at the municipal level. It is a very serious matter and if you wish to make any further comment , I would be very interested in hearing your words. Mr. Wiebe: I think I should clar ify here tha t the larger centres such as the Cities of Winnipeg and Brandon were presenting their own briefs. We have confined our

Wednesday, January 3, 1990 discussion in our brief more to the smaller centres of the province. Our impression is that in the smaller communities there is a fair bit of land already set aside for industrial development and real estate development. so I do not think it would impact as badly on us as it may on the larger centres. Mr. Penner: Very brief ly, first of all, I would like to thank the MAUM organization and Mr. Wiebe for making the presentation this morning. I think you have indicated clearly to the committee the urgency that you have put before the committee of this Bill.

One area though that I am somewhat surprised at the comments made by one of the committee members in regard to, in line of questioning, is again questioning the ability of a person or an individual to appeal. ! think the Bill clearly states that the ability to appeal is there as was under the previous Act, and that there have been no changes made nor are they intended to be made by this legislation that would limit the appeal process of the individual. For clarification I think, I wanted to clarify that before, that under

Section 13 as well as

Section 41, it clearly states in

Section 41(1) A board shall sit each year for the purposes of hearing applications for revision under

Section 42 of the Act. I think that is fairly clear. That has not changed from the previous legislation. There is however one question that I have. That is, I was wondering, I do not see it in your presentation or mention made of this in your presentation, the area of the phase-in. The legislation allows the municipality if they so choose to phase in tax increases due to value changes or whatever other reasons there might be.

Is it your view that we should leave the phase-in as c1 voluntary measure, or is there a need for the province to dir ect that the phase-in should be directed by the legislation as mandatory? Mr. Wiebe: In our limited discussion on this issue we were of the opinion that it would be best left to the individual corporation, to the individual municipality. Mrs. Gwen Charles (Selkirk): In the brief it mentions you had ample opportunity to discuss this legislation at the area meetings of the association.

Could the reeve tell us whether at each area meeting they went through the legislation clause by clause, or whether it was just general discussion of the legislation in principle? Mr. Wiebe: it was a general discussion, the principles involved in it. Most of the people involved in these discussions had already had copies of the Bill ahead of time and had done some of their own read ing on know many of the councils individually have spent time on it. Mrs.

Charles: Have they had legal counsel or anyone that has had to enforce the rights of citizens in their appeal processes and furthermore in assessment process discussing this with the association, or has it just been as you said in general conversation about the theory of this legislation? 190 Mr. Wiebe: There has been no discussion to my knowledge with legal counsel as far as our organization is concerned. Individual councils may have done that. Mrs.

Charles: So you stand by the idea that whether or not it has problems in it that we should just put it through, because in general you agree with the theory and it does not matter whether it works or not? Mr. Wiebe: lt matters if it works. lt matters whether it works, and we have no reason to believe that it will not work. There will be some enhancements that will be necessary like there are in other legislations. Mrs. Charles: Would you be willing to wait three or four years to get amendments made?

Depending upon how the Sessions sit and how long these decisions will come in, it could take a couple of years to have it amended appropriately. Are you willing to put up with that length of time to have actions taken by your citizens to your councils? I know how that feels, to put up with that and have those citizens wishing you could change things when of course you would not have the authority. So you are willing to wait perhaps several years for those amendments to come forward? Mr. Wiebe: I guess we are used to waiting for changes in any legislation.

Tha t seems to be the way of democratic life, but we think it would be much less disastrous than to now postpone this for another three or four years, much less disastrous. Mr. Elij ah Harper (Rupertsland): Mr. Wiebe, in your presentation you mentioned the present Municipal Assessment Act exempts lands held in trust for bands or tribes of Indians. This matter has been a great concern to several of our municipalities. I was just wondering whether you could explain what this great concern is and provide the explanation to us. Mr. Wiebe: We had hoped that the mayor of Thompson would be here.

As you probably are aware, the City of Thompson has had some very grave concerns. They are the one member of ours that has really been very anxious about this situation. They have had court cases, as you are aware. The push for this change originated with the City of Thompson. We have taken that further and discussed it with the UMM as well as with Government over the last several years and are very pleased that this change is being made, because there was an inequity. The City of Winnipeg had the exemption; we did not. Mr.

Harper: Have you discussed the matter in terms of why the exemption was there in the first place, or it may be as a result of other agreements that have been made, or is this straight support for the City of Thompson in their presentation to exclude this section? Mr. Wiebe: We have discussed this at length in the executive and board level over the last two years as I mentioned. We are of the opinion that this probably was an oversight in the writing of the legislation because the City of Winnipeg was granted the exemption

Wednesday, January 3, 1990 outright, and why would the rest of the communities in the province not be granted the same privilege? Mr. Harper: In pursuing this matter I was just wondering whether we actually exempted something from the City of Winnipeg, because there might have been some transactions made when we made the greatest real estate transaction a number of centuries ago, and as a result of those transactions and agreements it may have some thing tied to specific wording in this legislation. *

(1050) I was just wondering whether you would support any amendments to this legislation if it is as a result of the treaties that were made with the Indian people. Mr. Wiebe: I believe we would be prepared to sit down and discuss it in dialogue. Mr. Harper: Thank you. Mr. Taylor: Mr . Chairperson, I would like to follow up in a question to the delegation after the Mi nister's statement about the right to appeal.

Is the delegation aware that the Min ister's comment on the right of appeal is limited to the change of physical circumstances on the individual property and evolved, as opposed to anything that may be adjacent to the neighbour, in the neighbourhood or in market value. Those are the aspects that are not appealable; the physical circumstances are the only thing appealable, physical circumstances changing on the property in question. Were you are of that and that is how the freeze applies? Mr. Wiebe: Even in the first appeal? Mr. Taylor: No, beyond. Mr. Wiebe: Beyond that.

I guess we were more interested in the first appeal to make sure we did our homework at that time. Mr. Taylor: What I am hearing you say then as representing MAUM is that once the benchmark is established at the beginning of this process, you as an association then are prepared to live with a three year freeze, in effect? Mr. Wiebe: We have not devised or put out a policy on it, but that is my im pression of the discussions we have had, yes. Mr.

Taylor: In all fairness, Mayor Wiebe, do you think your member communities fully understand that is what they are buying into, that is what they and their constituents, be the y busine ss or res idential constituents, will live with? Mr. Wiebe: The whole assessment question is a complicated question, and I think I would be wrong if I said every body understood it. That is certainly not the case. I think a lot of people do not fully understand, but they have had opportunity to come and attend 191 meetings and join the discussions. had ample opportunity, and that is why we say get on with it. Mr. Taylor: Mr .

Chairperson, we have some ""n"'�"'"' at this committee that there has potentially ample opportunity. We are aware now, as legislators, that copies legislation were available in a certain preferred fashion as early as June. We did not have copies as Members of the Opposition, so there were certain people who did have copies, possibly your association, I am not certain. The City of Winnipeg apparently did. Given that preferred circulation, it would appear there are a few groups that did have ample opportunity.

We are not at all cer tain that there really were the opportunities for the general public across the province to review the legislation, and that the proposed series or circuits of reviews through various parts of the province going to all the major communities in a particular re gion. That form of presentation was scrubbed. We had a much different format employed later this fall, and we have had comments from people that, well, we did not really know.

In fact we had delegations come out here in that bitterly cold weather just before Christmas, travel in from various parts of the province and say: we have concerns but we do not fully understand the legislation, so we are putting some of our concerns on the table now, the ones that are clear to us, and we are going to be asking more questions and studying this over the next couple of weeks. If there is an opportunity to come back and speak to you again or submit a written submission if we cannot get into the city, that is what we will do.

We had one of those delegations just here and standing up a few minutes before you started to present. While being very sympathetic to getting on with what would be a further implementation of the recommendations of the Weir Commission, and I would not be out of turn in saying all three Parties are sympathetic and want to see something along those lines finally come to fruition in legislation in Manitoba, we have real reserv ations about lack of knowledge on certain key points.

There is much of the Act that is not changed from the previous legislation going back some decades, and probably will not cause any problems, but here are other areas of concern that probably do. That is why I am asking the sort of questions that I am to you right now, where we have a great anxiety that we may be rushing through with on certain points that could have very serious repercussions over the next three years, four years. Mr. Wiebe: Those of us who have been in municipal positions for the last 10 years at least, 10 years, 12 years-when the Weir Report first came out it was very difficult to understand.

I know that we sat down as municipal people and tried to read through and discuss it. That same kind of situation exists even today among municipal people, especially those who have only been in the municipal life for a little while but exists even to a larger degree in the general public.

Wednesday, January 3, 1990 •

(1100) I have tried in my own community to involve business people and leaders in the community in the discussion on the assessment, and I have tried to lead them through the changes that are happening . It is an area that the average ratepayer is not going to be spending a lot of hours because it is too difficult for him , he has never understood the tax notices to date that have come out . Hopefull y under the new system he will. At least it will be easier for us as elected officials to sit down and explain what that notice means.

I think the fact that it has been over a period of 10 years where we have looked at it-where we have more than looked at it, we have studied it, and we have come across with changes and reform that at least are pretty reasonable. I think since we are reasonable people within the Government, within the municipal Governments as well, if there are some things that need changes , surely we will be able to sit down and change those if they are really that detrimental. I do not see them at this point, and our committee does not see them, that way.

For that reason we still take the position it is far more important to move ahead with this than to stall and start another discussion . Sure we can get people out for discussions, but they will not understand. The municipal people do not all understand and they have had their opportun ity to get involved in it. Mr. Allan Patterson (Radisson): I find it difficult to understand your connection between the budgeting process and the new assessment, Mr. Wiebe. Budgeting is simply a process of determining what you want to or have to do and then the cost of doing it.

Once that cost is arrived at you apply it to the total assessment to get your mill rate. I cannot understand your sense of urgency in saying this is holding up budgeting. I see no reason that budgeting cannot proceed. Mr. Wiebe: The budgeting itself, as far as the actual dollars are concerned that we need for the operations of our municipalities, can proceed and has proceeded. In fact that proceeded already in June and early fall and many of us have our budgets ready, but we cannot apply it to the assessment because we do not know what the score is. Mr.

Patterson: As I understand it, you imply that the lack of this new assessment process is holding up the budget. I gather from - Mr. Wiebe: It is holding up the final budgeting. It is holding up the tax notices and the assessment notices. If we are not going to get with it-we like to have our notices out in May or June , if possible . Even at this point that will not happen this year. Mr. Patterson: I understand it is holding up the notices, but it is not holding up your budge t. The oth er point- Mr. Wiebe: It is all connected though . Mr. Patterson: I understand that.

I would also like to ask really what significant harm , I mean significant, 192 would be done to any individual or orga nization if this does not go through now and if the current assessment held for one more year while some of the problems with the Bill are addressed and subsequently passed for implementation in 1991 rather than 1990? Under any new metho d of assessment some taxpayers will pay more, some will pay less, and some will be about th e same. Whose ox would be gored, if at all , significantly? Mr.

Wiebe: Well, No. 1, as I said a few minutes ago , I think we will all be delayed as far as our assessment and our tax notices are concerned if this does not because we do not know how to formulate or how to print out our tax notices at this point . Further to that if we do not go ahead with it now, we have built up to this moment where we can finally see a change in the tax reform and where we can see this change coming about. If that is dropped, who knows maybe another five to 10 years . Our present legislation is really antiquated, 60 years ago it was passed .

It does not speak to the present modern technical way of life. Mr. Patterson: I understand that, but my question is simply that in order to make this legislation , make some significant improvements in the light of the presentations, what great harm would be done in carrying on one more year with this antiquated system? Mr. Wiebe: My understanding is that we have moved ahead as I mentioned . As municipalities, we have a lot at stake because we have put a lot of money into this system . That system has been developed to the point now where we are ready to move into this new legislation .

That means-I am not sure how much change that means, that is administrative, but surely the kind of money we have spent in developing a program, software program and a hardware program for this system, over the years, it has taken a long, long time. It is proven by the fact that we had to go back to the' 85-le vel of assessment in order to bring it all into the system . We want to sit by another three years and just twiddle our thumbs on it. Mr. Chairman: Mr. Patterson, one final question, we want to move on here. Mr. Patterson: I did not say three years, I said one. Thank you , Mr. Chairman. Mr. Chairman: Mr.

Plohman, if you have-one question. Mr. Wiebe: Mr. Melnyk would like to speak to this last question, could he? Mr. Plohman: That would be fine . Mr. Chairman: Okay, Mr. Melnyk, go ahead . Mr. Don Melnyk (Manitoba Association of Urban Municipalities): Mr. Chairman, I just would like to say that assessment reform, levying of taxes and so forth, is a very unpopular situation no matter what level of Government you are at, whether it be municipal, local ,

Wednesday, January 3, 1990 provincial or federal Government, and certainly any time delays on matters of that token can have certain impli cations that we could sit back, if there was a guarantee as such that this could in fact we legislat ed in one year's time , an adamant guaran tee, then I could certain ly support such a situation. Right now we do not have that guarantee . We have been dealing with this for some 10 years now and we have a minority Government . This is an opportune time to put this legislation forward .

If we do not put it forward I think that we can be jeopardized to sit for another 10 years and rattl e through the motions to see whether we all und erstand it to its very fine detail or not, and we are not going to go anywhere , we will be spinning our wheels and our gears again. It is very important that we do take a firm stand and put forward the legislation, and certainly the appeal process is there .

I think we in municipal and local Government are very responsible people and I have such a great deal of respect for my colleagues in municipal Government , through the board of revision and the appeal process , I think we will have a very utmost responsibility to make sure that any inequitie s are fairly treated and that amendments to any bill are brought forward to our provincial legislato rs. I hope that answers your question to some degree. Mr. Plohman: Mr. Chairman, I am just prompted to ask the presenters one questio n about the urgency of this legislation .

Would they agree that without this $4 million and the time required to automate the system that these changes or major changes in assessment would not be able to be implemented? In fact, that work was a prere quis ite to bringing forward major assessment reform and the expenditures of those doll ars. So, that time over the intervening 10 years was not wasted time . It was time in preparing for major changes . Mr. Wiebe: Yes, that is right . Mr.

Plohman: I just wanted to put that in contex t so that it would not be left on the record that there was some dilly-dallying around over a period of time in terms of getting these major change s made . Mr. Wiebe: We have reached the point now where we are ready to move We have the program in place. Now let us start using it. Mr. Plohman: I want to just ask the representatives of MAUM about the compu lsory phasing. Do they see any-or non-compulsory phasing .

UMM agreed, or even made the suggestion, that perhaps the Governm ent would put in a requiremen t to phase in increases over a specific level or over a certain percentage over a three-year period . The legislation is open-ended in that it leaves that to the municipality. Do you see the development of any standard criteria or will one municipality treat individua ls one way, another, another way? Does that make sense ?

Do you think there should be above a cert ain amount that might present certain hardships that ther e could 193 be a requireme nt, and that would take the onus from the municipality and say above that certain level you have to phase it? Mr. Wiebe: I do not think we would be opposed to that. I do not beli eve we can be opposed to that, but we take the position that the local councils are quite capable of handling that . Mr. Plohman: I am sure that all of you are pleased that you had this oppor tunity to make this prese ntation tod ay. Mr. Wiebe: Yes, we are. Mr.

Plohman: I just want you to know that the fact that you are able to make that presentation is because of the stonewalling, as we were called a few moments ago , by delays in making opportunities for the public to bring forward presentations . Mr. Wiebe: Mr. Chairm an, may I reply to that? We really had not thought it would be essential for us to present a brief. That is why we were not actively involved in preparing one earlier . When we saw in the news medium what was happening, we got concerned. Mr.

Gilles Roch (Springfield): It has often been said that this Bill has been 10 years in the making, and I realize that is a fact, but also the Government introduced this Bill sometime in mid-November and they expect us to pass in 10 weeks what took in effect 10 years to prepare . I think it is a little unreasonable. I have a question for whoever wants to answer it from MAUM. Had this Bill been debated in the Legislature or been in committee during the municipal elections, would that have been an impediment? Mr. Wiebe: I do not think very many candidate s would have made it an issue or put it on their platfor m.

It is too compl icated to deal with the public . Mr. Roch: Thank you, I am glad to hear that, Mr. Wiebe, because we were told that one of the reason s it was not introduced last September to give us ample time to debate it, research it, analyze it and possibl y have it passed by the end of December, was because of the municipal elections . I am just very happy to hear your comment. Thank you, Mr. Wiebe. Mr. Chairman: Mrs . Charles, one final question. Mrs. Charles: Well, Mr. Chairperson, I believe am able to ask as many questions as I will- *

(1110) Mr. Chairman: Go ahead. Mrs. Charles: -unless the committee wishes to put closure onto this process . Furthermore, you were mention ing that you believ ed that the last Bill that we had before us made an error in putting in exemptio ns for tribal lands in rural municipa lities, that is outside the City of Winnipeg.

Wednesday, Jan uary 3, 1990 Are you willing to make that same type of error or new ones indeed perhaps errors by rushing this through, or do you feel that perhaps years ago they should have taken their time and made a proper Bill and not put those exemptions in if indeed you are opposed to those exemptions for tribal lands? Mr. Wiebe: I think first of all we need to recognize that the legislation we are talking about is 60 years old. That is a long span of time and circumstances were entirely different then.

If there are errors in this legislation that we would recognize as errors, yes, we would like to correct them now. Mr. Chairman: Thank you. Are there any further questions? If not, I want to thank you very much, Mr . Wiebe, Mr . Melnyk and Ms. Demare. Mr. Wiebe: Thank you very much, ladies and gentlemen. I wish you al! a very successful legislative year. Thank you. Mr. Chairman: Our next presenter will be the Rural Municipality of Hanover, I believe, Mr . Peters and-is Reeve Friesen here? An Honourable Member: No. Mr. Sieg Peters (Councill or, Rural Municipality of Hanover): Good morning.

My name is Sieg Peters, Honourable Members. I would like Les Schroeder and Aron Friesen to come up here, please. I believe you have copies of our submission. In the outset I would like to say that I commend the Government of the Day to be so bold as to introduce 8;11 No. 79. lt is an attempt to correct many of the inadequacies that we have in the present tax structure. I would like to thank the the review panel for allowing us to make these brief observations. In the past agriculture has changed.

Years back every farm was a homestead and it included a basic amount of land, a small set of buildings and some livestock. In the present form it has changed. Some have a lot of land, some have a lot of buildings, some even have some of each. Now I will refer to my brief here. The Council of the Rural Municipality of Hanover is generally in favour of Bill No. 79 in that it will correct many of the inadeq uacies in the present tax structure.

We agree that all residences, both farm or non-farm, should contribute towards ali services and by these I am referring to things like the local services that we have, the roads, the drainage, the fire protection, et cetera, including both the educational support levy and the local school taxes. We strongly feel however that the taxation for education should be shifted away from farm property, both farm land and production buildings. The present legislation takes the provincial share off the land and will not put it on buildings.

We are concerned that the local levy, which I guess we feel was incorrect until now, that was on the land, now we are going to add that to the buildings. So we are sort of making another thing incorrect. 194 I should maybe also add here that many of the municipalities who are growing are shifting into the livestock area. lt is a form of decentralization. I think there has been concern that everybody wants to move to the urban areas.

We feel that if livestock buildings and buildings in general would be taxed heavily, and we feel that this local education tax will be a form of this type of taxation, that there will be· less livestock produc ed . lt will have some effect on livestock production in the future and we feel that this form would not be good. The second concern we have is, we are concerned over the term "ma rket value" to be used as a basis for property assessment for both land and buildings. We feel that there should be a clear definition of the term "market value" in Bill No. 79 before it receives approval.

In implementing a formula for determining market value, variables like including market price and potential productivity of land and buildings should be considered. We feel that restricting ourselves to the market price only could change the price very quickly. Isolated sales in an area could greatly affect just a simple market value. Therefore, we feel it might be good to have it somewhat related to the potential production capability.

The Rural Municipality of Hanover feels that the absence within Bill No. 79 of provision for a dual assessment system on farm properties in the vicinity of ur ban areas represents a shortcoming in this proposed legislation. The municipality continues to believe that the assessment of farm property should be based on its productive potential while still being used for agricultural purposes. However, if such land were sold at a later date for urban development, we would see nothing wrong with a recapturing, perhaps for an eight-year period, of taxes based on assessment at a development rate.

We believe an amendment to Bill No. 79 should be made. Thank you. Submitted by Hanover. Mr. Chairman: Thank you. Are there any questions to Councillor Peters? Mr . Plohman. Mr. Plohman: Just to thank Councillor Peters for the presentation and his recommendation regarding the dual assessment system, which we feel is very much a shortcoming of this Bill as well, and for his statement on that particular issue, I just would ask one question on that. Would you also feel that there is room in doing that to have some incentive for farmers to retain land in its natural state?

When I am talking about land, I am not talk ing about agricultural land that is in production, but perhaps land that is retained in its bush state in some areas, whether there should be an incentive to retain land in that for wildlife habitat or for other wildlife uses as an environmental incentive for farmers. Mr. Peters: I would just like to respond by saying that we have restricted ourselves to the productive land and not to the land that could be set aside for other uses. Mr. Plohman: So you have no comment on that, Mr . Chairman? I see, thank you.

Wednesday, January 3, 1990 Mr. Laurie Evans (Fort Garry): Mr. Peters, could you give me a little more specifics in terms of how you see this Bill implicating or impacting on the livestock industry? You have indic ated, as I have understood it, that it could have a negative impac t because of the level of assessment that would occur on the farm buildings associated with the livestock enterprise. Could you be a little more specific on that? Mr. Peters: Can I let my partner, Les, speak to this one? Mr. Chairman: Yes. Do you want to give us your name , please? Mr.

Les Schroeder (Rural Municipality of Hanover): Yes, the name is Les Schroeder. Mr. Chairperson, I think this has great implications, this Bill, and if an amendment is not made to it I think we are goin g to see more serious consequences to the agriculture sector than we see on the outset. With that I would like to allude to a few things and that is if we look at what has happened in our western counterparts, the provinces I am indicating here , where they have looked after the agriculture sector, where it has been viable , without a question, taxation dramatically affects the productivity .

If you look at what happened in the west, our slaughter plants have left us, our jobs have left us, due to the closure of slaughter plants. I think it is very important that we realize right on the outset that the municipalities that are viable and growing, where the shift is not happen ing, are areas, municipalities, with large intense productive units. Okay? Keeping in mind if you are going to tax or deter these individuals with progress through taxation, I think it clearly shows that we are not taking the long-term ramifications of this Bill into account . Okay?

We have worked out a few scenarios, and I will speak to something that I have some insight into, where the average dairy farm will pay substantially more money with this new forma t. I think that the taxation of the school levy, be it local or the special levy, should be placed on the residential buildings and should be waived in total from the farm sector in orde r to make Manitoba more competitive with its neighbou ring provinces. Thank you. Mr. Laurie Evans: I would just l ike a little further elaboration.

When you use the exampl e of a dairy farm-now obviously in the supply managed sector I would assume that the taxes tha t would be applied to the diary farm would be entered into the formula in terms of the cost of production, so there would be an opportunity there to recapture that in that indirect manner . *

(1120) When you are tal king about someone , for example, who has a major seed cleaning facility on there, how in the world do you come up with a market value and an assessment on that? When you are looking at someone who has an intensive gree nhouse opera tion that is over a short period of time during the year or the hog operat ion, for example, which is not under supply management but is under triparti te, I would assume that there is no indirect way that is going to enter into that operation as far as being handled in the tripartite system.

I have a great deal of difficulty in figuring out how you are going to assess those product ion buildings. I infer from your comment that you may be suggesting that the production buildings on a farm should be exempt from taxation, which would result then in the only building on the farm that would be taxed would be the residence . If you have a situation where the resident is deciding that it is just as easy for them to live in the local town and commute back and forth you would end up with no taxation base on some of those farms at all.

These are the types of concerns that we as the Opposition are finding difficult to see how you are goir.g to make the amendments that would bring in the fairness that you are after on the farm operation . I would certainly appreciate your comments on a broader scale. Mr. Les Schroeder: Mr. Chairperson, in response to that question first and foremost we cannot, quote, we cannot use all the taxation on the dairy in the mark eting format. Okay? That is No. 1. Number 2, if we look at the statement I made, I think I clearly indicated we were just looking at the education levy.

We were not looking at the municipa l or the other taxation that was assoc iated with that on certain debe ntures. 195 Furthermore, I think it could be put in place, because at present the outbuildings on any farm are not taxed with the education levy in any way.

Therefore, taking that into consideration at present, the proposal is to waive only a proportion of the education levy on farm land but making it a hardship to the municipalities where there is intensive livestock production because the marginal amount that will be taken off their land , the additional amount put on the outbuildings, and be what it may in the ag sector, as indicate d that there will be only a marginal shift within the ag secto r. I think that is an unfair .statement because without a question that is what makes Manitoba viable. I do not know if I answered that well enough, but thank you. Mr.

Chairman: Thank you. Any other questions? Mr. Minister . Mr. Penner: First of all, thank you very much, gentlemen, for the presentation. I think you have made your point rather well. I think we have heard from a num ber of other presenters some question expressed as to how we deal with those properties that are affected by the urban shadow across the province and I think you have indicated it again that there needs to be some con sidera tion made in that area. If the province did con sider an amendment to legislation that would address the shadow effect on farm properties and the values of farm properties, or

Wednesday, January 3, 1990 the excess taxation of farm properties, re the productive capacity of an acre of land, how would you and when would you see that being implemented, considering all the information that has been entered into the computer, at this point and stage; has been entered into based on'85 values? Have you any suggestions in that area? Mr. Les Schro eder: Mr. Chair person, Honourable Mini ster, I think our concern would be not as grave if on the outset, Bob Brown, the individual in charge of assessment, would have indicated the percentages.

Maybe I am out of order here, but I would like to say that if we had a percentage ratio much less on the buildings, that might be acceptable. Without a question, earlier indicated by Mr. Evans, there needs to be something in place that we all pay our fair sha re. Without a question, we are very supportive of that, but keeping in mind that in many scenarios the taxation on a 640-acre farm would go from $1 ,900 to $5,000, that is a dramatic increase , and keeping in mind that these production units are what keeps the economy in rural Manitoba healthy.

Coming back to that question, if the percentage ratio was adjusted-a t present it has been indicated it will be equal land and buildings. We feel if the percentage ratio on the buildings would be much less, maybe this would be acceptable, but until we have been given that percentage ratio we cannot end orse it. Thank you. Mr. Penner: Mr . Chairman, one further question.

The question I asked is: have you any suggestions as-if and when a consideration was made to amend the current legislation that is before this committee now that would recognize the impact of the shadow effect of urban development opportunities on an acre of land, if we implemented that or if we made amendments to the Bill, how would you see, or what suggestions have you to put before the committee that would lead me to make a decision or lead this committee to make a decision as to how we could amend the Bill and implement the changes, taking into consideration that all the information is currently entered into the computer programs, without entering into major costs that would in effect be charged back to municipalities, that would allow us to make those kinds of considerations?

In other words, should we do it immediately? Do we have three years, or would it satisfy you if an amendment was made that would allow, within a three-year period, some changes to be made to recognize them? l\ll r. Peters: I think the time frame would be adequate in regard to this fringe area, because we would still like to see that the people pay it retroactively and not have to be taxed up front each year if they are a bona fide farmer and have intentions of farming. l\ll r.

Penner: One more question: are you satisfied this Bill recognizes that there has been an inordinate amount of tax on farm properties, and that this Bill does addr ess that to a degree, although not as tar as you would want to? Are you satisfied that the Government is making an approach to al leviate the education tax burden on farm properties? 196 l\llr. Peters: I think we stated initially when I first came here that we think the direction is good. We realize that you are now putting in print some of the things that have been happening in the last year or two, and that is good.

We need that, but I think our suggestion is that, by allowing the local school taxes to go on buildings as well as the land in future, we will be heavily burdened with school taxes. That is still a concern to us and that is why we are disagreeing with certain portions of this Bill, recognizing that the direction is extremely good. l think we said that initially, and we want to leave you with that impression. Mr. Plohman: Mr .

Chairman, we share the concerns that this legislation will have on building-intensive farms in the province, and that is one of the reasons why we have talked about compulsory phasing over a particular percentage or amount and perhaps over a number of years. I would like to ask you whether you know the impact that this will have on your municipality. Do you have those figures? Have you asked for them? Do you know how many farmers in your area are going to be hit with rather dramatic increases in their taxation? * (113 0) Mr. Peters: We do not know.

In general we may have an indication of the impact, but specifically we do not know the impact. If it was only our local things separate from education, we would not be very concerned, because I think most people in the local area realize that there was an inadequacy before. If they have a major portion of their farming that has to do with livestock and it is not buildings, I think most of them are quite willing to contribute.

The idea of the educational thing will be more of a problem, but as far as roads, fire protection, drainage, these type of services, I think they will quite easily nobody likes to have a substantial increase in things, but I still think they will come around very nicely. Mr. Plohman: Mr. Chairman, we all want fairness, and I think that I agree with your statement that everyone wants to pay their fair share.

However, it is the shock impact that I am concerned about as well, the major increases in one year which an individual operator has not had an opportunity to work into his plans and may not be able to meet those obligations because of the tremendous increase that takes place in a short period of time. The Government has said that they would allow the municipalities to phase in increases. Do you think that there should be a requirement for phasing in over a particular level, and should there be perhaps a phasing over longer than a three-year period if there are major increases, a major shift?

That is presupposing that there is not going to be a major change to the legislation that would remove production buildings from taxation. Mr. Peters: In general response, not knowing all the details, I think we would suggest that what has been in the Bill we could live with that. We think each local

Wednesday, January 3, 1990 area making its own decision might work, especially if the education is not on there. Now, maybe once we know the real impact, it may be more drastic than we initially thought. If you are asking me what talks we have had in council-would suggest to us that we do not think that it has to be legislated over a period more than three years. At present we do not feel that it should be implemented strictly. Mr. Plohman: Just for clarification, you do not feel that it should be implemented strictly?

What did you mean by that? lt uniformly-in other words, one municipality would allow larger incr eases than another before phasing? Tha t is fine as far as you are concerned? Mr. Peters: In general I think the small discussions that we have had on this, and were again-living with a thing that it would not have big impacts. Mr. Plohman: Do you know that? Do you know whether there will be some major impacts in your municipality on some building-intensive farms, hog farms or livestock- Mr.

Peters: If the educational tax will be implemented as suggested, then there will be fairly substantial impacts on livestock-intensive farms. Mr. Plohman: Have you heard, Mr . Peters, that the Government intends to change its proposal on the education tax? Mr. Peters: We have not discussed that at aiL Mr. Plohman: Mr . Chairman, on the basis of what we have now, you are saying that there would be major impacts, but you do not know precisely what they would be? Mr. Peters: I think that would be correct, and we feel that this is why we are proposing something that has been, we think, not correct in the past.

Again the education was on the land, and present legislation is taking a large portion of it off, and we think that is good. We feel that more of it should come off the land, and that it should also not be placed on buildings as was stated a little earlier . I think that is our position. We feel very strongly that the local taxes for drainage, road work, snow clearing, should be shared by all people. We make no bones about that. Mr. Plohman: Just a final question, Mr . Chairman. What you are saying, Mr . Peters, is that you would like to see the education support levy not placed on buildings? Mr.

Peters: That is right. Mr. Plohman: That is not the case in the proposal by the Government, so you are asking the Government to change its position on that? Mr. Peters: That is precisely what we were suggesting in our submission. 197 Mr. Plohman: Yes, and we have to recognize the impact that this would have on the plans that the department has, and the timing required. lt is where we have these odds on for major and very little time to do it. just want to make the councillor aware that these kinds of changes require time prepare. Mr. Taylor: I wanted to ask the councillors a couple of questions on buildings.

In the last couple of weeks we have had a lot of comments made both here and when we have been visiting farms over the last while to the effect of what is a building, and what is a piece of equipment? We had representatives from seed farmers. We have had individual seed farmers as an example. We have had people involved in grain farming who have said, well, I have these metal granaries and they are going to be considered buildings, but I have a drying operation as well. I have the surge bin for it, and then I have the dr yer itself. Are those build ings, or are those equipment?

There does not seem to be a lot of clarity coming out of the department on this, other than say every thing that stands and is immobile is, therefore, a building and not a piece of equipment. I wondered if you people from Hanover have any wisdom to offer us on how you might see a fair definition as to what is a building and what is a piece of equipment, and should it be assessed, therefore, or should it be exempt, notwithstanding the other proviso you talked about. You talked phase in, you talked about maybe not a full 100 perc ent, but just what should be considered in, and what should be considered out? Mr.

Chairman: Who would like to answer that? Mr . Peters. Mr. Peters: I think one cannot without going into great detail, it seems to me that when you are talking about a silo, the unloader as equipment, when you are talking about grain drying, things that do the actual are equipment. The bin itself would be storage that portion would be a building. I guess I mentioned it earlier , we think the word "ma rket value" needs some clarification and some work on it, and that is what we were sugges ting.

This machi nery involvement in buildings would be part of that definition, but we think that equipment is definitely not part of the building. Mr. Taylor: The other question I want to ask was to do with structures on farms that are not being used. There have been many cases where people have had older buildings that they have been reluctant to destroy as they might have a use for, and we have seen it in granaries, we have seen it in chicken houses, we have seen in it homes. Things change on farms from time to time as different generations take over or somebody is away at college but wants to take over the farm.

A home may be em pty. The son or daughter may come back, and the reluctance might be to destroy? h••''ding, but if it is going to be taxed, the question that was put to us is, are we then likely to see a tendency to knock down and eliminate buildings that could have a useful life down the road, but because they are going to be

Wednesday, January 3, 1990 taxed, even though it can be documented that they are not being used and had not been for some time? I wondered if you had come across that, and if you have any advice on how to deal with an issue like that? Mr. Les Schroeder: I would first like to touch lightly on the question you add ressed earlier , and that is if you will look at feed-storing facilities, be what they may, take into account they are not used year-round, where outbuildings such as barns and units of this nature, it is a year-round functional operation.

Therefore, I will come back to what I have earlier said, if the percentage on these buildings was not unified, which at present we do not know where it is, I think there should be a different class. If in fact they are to be taxed, there should be a different class associated with these buiidings, with feed processing, no matter what format is taken into account. Furthermore, to the last question that you posed, that has caused us a lot of concern. Without a question, any roof that does not leak, it is a viable building. As we indicated earlier, this will deter people from leaving these stand.

We might see a lot of these being torn down or removed, where in fact they could be utilized somewhere down the line and therefore deter growth as we indicated earl ier. I do not know if that correctly answers your question, but that is the best I can do. Thank you. Mr. Chairman: Thank you. Mr . Findlay. * (11 40) Mr. findlay: I would like to ask a question of Mr . Schr oeder. When you were answering the question of Mr .

Evans where he asked you about whether people in supply management could pass on the incr eased cost of doing business through the increased taxation on the buildings, you said in the dairy industry only a portion could be passed on into the cost-or-production formula. Could you explain what you mean? Mr. les Schroeder: Yes, if I may. if you will notice, a lot of dairy farms are not just solely dairy. There are a lot of spinoffs on the dairy farm.

When I indicate that along with their production unit, they may be associated with other areas in the livestock end, be it in the feeder end of it, raising cattle, or in the hog productivity on it, ail on one basic unit. The taxation is associated with whatever is on that unit. That leaves something to be desired. Mr. findlay: Would you not also admit that for strictly the dairy portion of the operation, the tax on the dairy portion of the operation can be completely incorporated in the cost-of-production formula?

Mr. les Schroeder: I have not worked first hand with the marketi ng council, but it was brought to my attention. No. I will leave it at that because I do not have enough knowledge, and I will say that up front, that I have not been associated or worked alongside of these individuals in order to make a fair evaluation of that. Thank you. 198 Mr.

Findlay: Also if you are looking at the total package with regard to the increased cost, for a land-based farm that is a dairy operation, there may well in actual fact be a reduction in total taxation or at best neutral because of the reduction in taxation on the land component of that farm. Mr. l..es Schroeder: Mr. Chairperson, not with the scenarios that have been worked out. These farms range anywhere from 600 acres to 1,000 acres. I will leave it at that.

Mr. findlay: Most of that land in your municipality would be assessed fairly high so it would be paying a fairly substantial ESL now on that 600 to 1,000 acres. If you have seen enough comparisons in your mind to know how much shift is going onto buildings from land in terms of reduction on land and the increase of buildings, whether they actually do come out pretty close to neutral. Mr. l.. es Schroeder: The Honourable Agricultur e Minister, I think it is very unfair for me to give an intelligent observa tion until Mr. Brown will give us some actual percentages. Okay? Mr.

Helmut Pankratz (la Verendrye}: In the brie f it states, and I will just read this portion if I may: however, if such lands were sold at a later date for urban development, we would see nothing wrong with a recapturing perhaps for an eight-year period of taxes based on an assessment at a development rate. My question to you would be: at this time, do you feel that zoning should play any role in this at this point? Mr. Peters: Would you please explain that? What do you mean by whether zoning should play any role? Mr. Pankrat:z: Mr . Chairman, if land is zoned agriculture it is basically frozen tor development use.

As long as it is zoned agriculture, any value that you basically would put on it in my opinion would be considered as speculative value. Would you agree with that? Mr. Peters: I am not sure I am fully following your reasoning here, either I am too nervous or I am not with it. You are asking whether any value associated with agricultural land- Mr. Pankratz: 1 am referring to your brief when you are indicating to recapture. Naturally to recapture perhaps for development rate, then in my opinion it would have to change usage- Mr. Peters: Right. Mr. Pankratz: -from agriculture to whatever.

Now, are you stating at that point in time when the usage is changed, only at that time, should you be able to recapture, or should you be able to recapture while it is agriculture and holds maybe a speculative value, you then still could go back on agriculture zoned, which is frozen ba sically through planning on agriculture leasage?

Wednesday, January 3, 1990 Mr. Peters: No. We would only like to have it retroactive after the usage has changed. Mr. Pankratz: After the usage has been changed. So while it is zoned agriculture, the way I read it into your brief, you would suggest that it should be basically assessed for taxation purposes accor ding to its productive value? Mr. Peters: That is correct. Mr. Pankratz: Thank you. Mr. les Schroeder: Mr. Chairperson, if I may elaborate on that point. You will notice in some of the surrounding areas, zoning takes place without the will of the farmer .

Without a question, you cannot reflect taxation on zon in g alone, you have take into account the productivity of that land and that is why I think we felt as a body that the retroactive concept would be a fair way in order to add ress this problem. Does that- Mr. Pankratz: My question actually that I would have posed, if you would have gone along with it, that it should have been on agricultural land as well while zoned agriculture, then my question would have been to you, whether you would propose that should only be on the land or whether it should be on all speculative values?

This is what I am getting to, if it should go and be passed in something similar to this, why only agriculture should be taxed back on speculative value and not necessarily for that matter commercial, residential or other zonings? Mr. Les Schroeder: We have no problem with that if you can find a means in order to accommodate that. Mr. Pankratz: My final question to you is: if you back tax on some of this land and you get this windfall of money, where should it be apportioned to? Mr. Les Schr oeder: Mr .

Chairp erson, without a question, being a councillor I would feel very strongly it should stay in the municipality due to the fact we have been shortchanged in the past dramatically. Thank you. Mr. Plohman: Just on that, the Weir Commission re commended that where land is rezoned for speculative purposes that there would be a 10-year period of recapture, and where land was rezoned at the time the use changed it would only be five years. That is what the Weir Commission recommended.

Would you agree that where a person rezones for speculative reasons that there should be a longer retroactive recapture, or would you think it should be the same for both situations? Mr. Peters: I do not think we have strong feelings on that, it is the dir ection that we are interested in. I think we could live with your comments as well. * (1 150) 199 Mr. Chairman: If there are no further questions, we want to thank you very much for your presentation this morning. Mr. Peters: Thank you Mr. les Schroeder: Thank you very much. Mr.

Chairman: We have two presenters that are here that cannot come back this afternoon. One is Mr . Rick Borotsik, the Mayor of the City of Brandon , and the other is Brenda Leslie from the association of school trustees. Is it the will of the committee that we hear both these presenters before lunch? Agreed. The next in line actually would have been Mr . Jutras. Mr . Jutras, would it be okay if we leave you until after lunch? Would that be all right? Okay, we will deal with Mr . Borotsik, the Mayor the City of Brandon. Mr. Rick Borotsik (Mayor, City of Brandon): Thank you, Mr.

Chairman, for your indulgence and I appreciate the indulgence of the other presenters as well. My name is Rick Borotsik. I am the Mayor of the City of Brandon, Mr . Chairman. I have with me Mr . Robyn Singleton, who is the City Solicitor for the City of Brandon who has just recently been appointed a Q.C., and he is about four feet off the ground so I may have to bring him down quite often. Mr.

Chairman and Honourable Members, the Province of Manitoba has introduced new legislation that will make a dramatic change in how property is assessed for the purpose of real property taxation. lt is my position as Mayor of the City of Brandon that the proposed changes are for the most part positive and will benefit all Manitobans. The following is a

summary of those points, gentlemen and ladies, which I believe to be positive in the legislation:

(1) The new legislation in corpor ates many provisions of the Weir Report, which I believe is an appropriate change in direction for the assessment in Manitoba.

(2) Pr ovince-wide assessment standards, including the City of Winni peg, are introduced for the first time.

(3) Assessments will be at market value or at least close to market value, with the current market value for the year 1990 being set with the year 1985.

(4) Removal of provincial education tax from farm land and farm buildings is also very positive.

(5) The assessment will be at full property value so that the assessment and property tax process will be more comprehensible to members of the public.

(6) The move toward the 10-acre exemption for school and hospital property is a positive step.

Wednesday, January 3, 1990

(7) A tax-exempt status for non-profit licensed day care centres is also positive.

(8) Exemption from taxation for heritage buildin gs for a two-year peri od during renovations is also positive.

(9) Tax-exempt status for all perma nently abandoned farm buildings over 60 years of age is also supportive. (10 ) A move to remove the tax exempt status from resi de nces of public and pri vate schools as well as Bible colleges can also be supported, par ticularly if financial assistance will be made available to the schools affected as suggested by legislation.

(11) Inclusion of a definition of "i mprovement" so as to distinguish more clearly between buildings and land is a positive development as the value of the land on which a building sits may vary radically from the value of the building itself.

(12) The concept of assessment at "value" as mentioned above is positive, although the province is intending at this point to use a three-year reference period. For example, an assessment in 1992 will use 1991 data and will be used in the 1993 tax year, in fact will make the cost of going to a shorter assessment period, at least initially, not reasonable.

Therefore we can support a three-year period. (13 ) The move to a standard refere nce year, whether an appeal is made by any property owner or not is in our opinion fair, so that all property owners will be facing the same reference year so long as the provincial municipal assessor in its re-evaluations will be flexible in add ressing changes to the assessed value for reasons they may have missed at the time of the assessment. (14 ) The chang es to the assess ment in agricultural land and indeed any other of the categories of assessment, should they prove very large, must be introduced slowly over time and the legislation contemplates such a gradual change in approach.

While the list of items, gentlemen and ladies, I believe to be positive in the legislation is lengthy, there are several concerns as well, my primary concern being the absence of a definition of a value within the statute. For a number of years now the method for determining the assessed value of property !or the purpose of expropriation has been set out in The Expropriation Act, and I believe a definition similar to or the same as the definition that is contained therein is appropriate. ! am pleased to note the Minister has already announced his intention to add a definition of value to the proposed legislation.

Second, I have another concern relating to the size of exemptions for the school and hospital lands which I would like to see expanded. Third, I would like to see 200 some changes in the method of assessing farm lands around major urban centres such as Winnipeg and Br andon so that while those lands are used for agricultural purposes they will be assessed on their value for agricultural production purposes, although the province may well wish to consider a move to retroactive reassessment for such farm land should the use change to a use which gives the land· a much higher value. In

summary, it is my position that the existing asse ssment legislation is very da ted and very cumbersome. Further, many provisions relating to the assessments are contained in statutes other than The Municipal Assessment Act. The new legislation does repeal much of the other assessment-related legislation which will assist in making the assessment process more comprehensible to many members of the public. I am not suggesting that the new assessment legislation is perfect. I do believe, however, Mr. Brown and his staff have taken every reasonable effort to give us legislation which is workable.

I believe the legislation can be supported and should be passed so that we can proceed immediately with the 1990 assessment so that the residents of Ma nitoba learn what their assessments will be and in turn what their taxes will be in the nearest possible future. Respectfully submitted, thank you very much, Mr . Chairman. Mr. Chairman: Thank you, Mr. Borotsik. Are there any questions from the committee to the presenter? Mr. Borotsik: lt was very nice, if I may, to follow MAUM. I assume most of the questions have been already asked of MAUM, but I am prepared to answer any questions. Mr.

Plohman: Perhaps the mayor could explain perhaps what he means by a move to retroactive reassessment for such farm lands if there were to be a dual assessment system put in place. Is he suggesting that perhaps it could be implemented a year down the road, but the benefits of that established under the new system would apply as a discount on that year retroactively for the intervening year or two or whatever it might be before it is put in place? Mr. Borotsik: Mr . Chairman, through you to Mr.

Plohman, the retroactivity certainly with the farm lands in both Winnipeg and Brandon particularly being urban centres, it has been discussed at some length, Mr. Plohman, certainly with the other Members. We agree certainly with comments that were made around this table previously that there should be some vehicle in place whereby agricultural lands within urban centres right now should be taxed and assessed as agricultural lands if they are in that particular production. I do not know by which the vehicle you are talking about, Mr. Plohman, please. Mr. Plohman: Mr .

Chairman, read ing this now I understand you are agreeing with what has been presented previously, that there would be a retroactive recovery when the use changed. However, what I was asking ab out, and I was misreading what you said but I would still like your

Wednesday, January 3, 1990 opinion on it as to whether in fact as the Min ister says the computer system is not set up to establish a two value system for agricultural land, it is all based on the value as of 1985, whether in fact if this was put in place a year or two down the road that a person paying $75 tax per acre on land that would after it is put in place, a dual system, be only paying saying $7.50, one-tenth of that, whether they would be able to recover that the following year on a discount on the taxation for that year where they paid the higher level. Mr.

Borotsik: I believe that there should be a base year at this point in time, Mr . Plohman. When we do the reassessment for the 1985 value if you will, if it is an agriculture property in agriculture production, then it should be assessed at that basis. If it is now being assessed at a higher value, it should be reduced to that agricultural production basis. Should it then five years down the road, Mr . Plohman, be changed and the use change, then that five-year period should be recovered as to the market value of the property when it was sold for development purposes. Mr. Plohman: Mr.

Chairman, we agree on the last point. lt is just a question of whether the implementation date, from what the Min ister has said it is almost impossible to put into place effective for 1990, that there would be this dual system with the lower assessment based on agricultural value where currently perhaps it is assessed at an industrial value. Mr. Borotsik: Okay, I understand, Mr . Plohman, you are suggesting rebates at a future date. I have no difficulty with that at all. Mr. Taylor: To Mayor Borotsik, in your point 13 in your submission, you mention the fact of going to a value method.

Of course you are looking for definition, and I noticed that otherwise in your presentation as well. So are we looking for that same definition, because the statement is there but the definition is not. Further on in point 13 you say you are comfortable with the use of a benchmark, a 1990 benchmark. We have used the terminology "freeze" instead of "benchmark" in effect that we will be living with the 1990 level for the succeeding three years. *

(1200) I was wondering if you are aware that in other jurisdictions, instead of putting a freeze in place, there is a legislative requirement that the assessments for the province-and the example on one I am going to use is British Columbia. They can be no more than two years behind. lt is instead of picking a one-year benchmark, in this case 19 90, and you live with something and it is called 1990. lt is saying that at any given point the assessment process cannot be more than two years out of date.

I was wondering if you are aware that sort of system is in place and that of course it is possible to do that today because of computerization. I wondered what your reaction might be to that sort of a system, if we could look at that for Manitoba as opposed to this, although updated, still rather archaic approach to assessment. 201 Mr. IBorotsik: Mr . Chairman, through you to Mr. Taylor, I am aware of B.C.'s assessment procedure with two-year assessment process.

Certainly with a three year process that is being supported or being "",.,"'""''Ion at this time under legislation, it is far what we have at the present time where we now back to reconstruction cost based on the 1975 value, in some cases in Winnipeg going back to 1950 value, Mr . Taylor. I would be very pleased to be able lo have some factor of a 1985 market value that I personally can relate to. I think what is being suggested is far superior than what we now have in place in legislation.

As for the British Columbia model, I believe there are still some bugs and some problems that they are having associated with that model. I am not familiar with it. I personally, Mr . Taylor, would agree with you, I would love to be able to go to same-year market value assessment. Whether financially or economically it is probable or can be accomplished, I do not know. I am not an assessor nor do I know what the computeriz ations req uir ed from the provincial Government or the provincial assessor's department. I would love to see that, Mr . Taylor.

If I have a choice between a three-year and a two-year, certainly I would propose and I would pick a two-year. Again, I do not know what the financial ramifications are, and if I have a choice between the three-year that is now before me and something that goes back to 1975, I will choose what is before me right now, which I am told can be accomplished. There is no question, Mr. Taylor, I would like to see a two-year, and by the way, in the brief before you we have suggested perhaps we could work towards this end .

Whether it is logical to suggest that we can put it into place and accomplish it either this year or next or 10 years from now, I do not have those answers, I am sorry, Mr . Taylor. Mr. Taylor: Mr. Chairperson, the mayor brings up an interesting point and that is, what is the cost of it. I think anybody in Government has to ask that sort of a question.

I just wonder if he was aware that after they put in an assessment corporation for the whole province and eliminated the municipal assessor, for example, in Vancouver, in Victoria, that in reality what happened is there were half the number of total assessors for the province, the cost went in half, and with computerization I wonder if the mayor that they are only six months behind, not two years behind.

You can go the B.C. municipal assessor's office whether you are in Victoria, Vancouver or you are the central location that they have and say, want to do it for my property, here is the address, and within minutes they can give you a printout. lt is only six months behind, and am wondering if that had appeal to the mayor. Mr. Borotsik: Certainly a reduction of assessment cost by 50 percent appeals to me, Mr . Taylor. I do not know if that can be confirmed in writing at this point in time, but I would certainly take it back with me if I could. As for the six months in the B.C. model, as I not familiar with the B.

C. model, whether that be a six month market value assessment at that date or whether they take it to a year benchmark, I do not know. That is the ultimate, and there is no question I would prefer

Wednesday, January 3, 1990 to be able to walk into a provincial assessor's office and suggest that my assessment is based on factual timely data. As I say, what I see under legislation right now as being proposed is far superior than what I am familiar with right now in legislation that is now existing. All I can say is, I support what is here at the three year benchmark or three-year freeze, if you will. If it could be a two-year freeze, a year or two years down the road, based on progression, I would be very, very pleased Mr . Taylor, very pleased. Mr. Taylor: Mr.

Chairperson, to the mayor, do you feel that with the freeze in place and once you get past year one, 1990, and you look at a 1992 or '93 context based on the 1990 benchmark year, and something happens to the property adjacent or there is a significant downturn in the market for wherever, but let us say Brandon, heaven forbid, but say there is a very major downturn in the housing market in Brandon and the bottom has fallen out of prices and people are seeing a one-third reduction in their values, but meanwhile the taxes are 1990 taxes.

People say, well, I think I would like to appeal this and then of course they are told, well, I am sorry but you are going to have to wait to post-1993 until we have a new benchmark or a new system. What sort of grief do you think that might give you at the municipal level? Mr. Borotsik: Thank you, Mr. Taylor. First of ali i believe when you said 1990 taxes you meant 1990 assessment. That is what we are dealing with.

That is fine, but there would still be equity and fairness, because all of the assessments that were benchmarked in 1990, if it was a market fall generally throughout the economy, then there would still be equitability and fairness because a!! of the properties would be affected equally. So there would be a very simple explanation as there is right now. Lookin g at asse ssments ba sed on 19 75 reconstruction costs, there is supposedly some equity and some fairness. Unfortunately, there is not in most cases.

However, you could still suggest that it is general across the assessment properties, residential in this case, and therefore there is some equity. You have a point I suppose, Mr . Taylor, should there be some specifics dealing with a specific property where the assessment or there is some act, some problem that may affect one specific pro perty.

Th ere is opportunity under the legislation, I believe, that the assessor can do a subsequent assessment of the property and therefore bring the assessment into line. lt is not an appeal process as has been suggested before, but there could be a subsequent assessment that the assessor himself can trigger, if I am reading the legislation properly. As for the three-year, again as I say if it is a possibility for two years I would be most pleased. I do not know what the ramifications are. I really do not. Mr. Patterson: Mayor Borotsik, I would just like to ask you the same question I asked of Mr.

Wiebe. lt has been mentioned that the current legislation is some 60 202 years old, so admittedly it is archaic. lt creaks and it groans, but nevertheless it is working after a fashion. Just what significant or irreparable harm would be done to the City of Brandon and any of its taxpaying citizens or organizations to carry on for a 61st year? Mr. Borotsik: Well, Mr . Patterson, certainly we could continue.

I do not think the world would come to an end, nor do I think Romania would get any more democratic than it is now, nor do I think there would be a number of other things happening in our society if this legislation should not pass. I suppose to answer your question, Mr. Patterson, we could survive. We will collect our taxes, we will pay our bills, and we will clean our streets. That is not a fair answer, and I will try to give you another less facetious answer. The legislation I believe is very important, that it be put in place as soon as possible. We can, certainly, delay the legislation for a year.

I suppose if that is the answer, could we delay it for two years or could we delay it for three years, we have done it for 60 years. Certainly we can survive for another three and perhaps another 10. I believe honestly that this legislation and most assessment legislation, there is a requirement for fai rness and equ ity. If we do not im plement this legislation as soon as possible, that equity is becoming less and less and less all the time. I believe that we have to react, and we have to react as quickly as possible. You as legislators have to decide the best fashion that legislation should come out.

I also mentioned in my brief, Mr. Patterson, that nothing is perfect. I know a number of pieces of legislation put through by this House and not one of them is perfect. There are always necessities for change and there are always errors in legislation. This is probably no different. I do not know where the errors lie right now, but I am sure after implementation in a year or a two-or three-year process of this particular assessment legislation, we will know where those errors lie, and we can then change it at that point in time. Nothing is perfect. I would like to see it as quickly as possible.

To answer your question very quickly, it can definitely go on for another year, that is not a problem. We will not die because of it. Mrs. Charles: If this legislation were to pass this year, what is the time frame that you would have to have the knowledge of, whether it is going forward or going to be changed? We are looking at how long we have to bring forward amendments in order to put it through as we think it should be done, or whether we should wait and bring forward the whole package or as the alternative, put it through as it is now and see what rises or falls as the case may be.

What is the time frame you need to have from us to implement it this year? .. (1210 ) Mr. Borotsik: Thank you for that question. lt is a very important question and the answer is immediately. We had anticipated that and by the way, I just have to preface this with a comment.

Wednesday, January 3, 1990 We at the City of Brandon recognize that there are going to be a number of problems by our citizens in the City of Brandon, recognizing a number that is now put on the tax assessment notices opposed to a compa rable number that was done last year. There are going to be substantial problems with that. When you have an assessment value now increased tenfold our phones will be ringing off the hook . I can attest to the fact that it has happened before and it will happen again.

What we had hoped to be able to do is to include the assessment notice with our tax notices when they go out in the fall. In order to do that, the city, like any other governmental organization , cannot react very quickly. We need some lead time. In order to do that we will have to know what the assessment procedure is, so that obviously the provincial assessors can get us the proper numbers so that we now can put our mill rates together, so we now can put both of the little not ices together in one little package which goes out, I believe in July, June if we could, believe me.

People love to get tax notices , we like to get them as soon as possible. Again , not being facetious, we would like to know as quickly as possible , and again the legislation is not going to be life or death to the City of Brandon. We will collect our billings based on the assessments we now have with our mill rates that we will strike .

We would like to see something that is comprehensible, that when our people get a notice in their hands they understand that it is a 1985 market value, and they have some benchmark that they can go back to compare with , and we would also like to be able to get our notices out as quickly as possible. To answer your question, as soon as you can possibly do it. Mr. Chairman: Any other questions to the presenters? If not, I want to thank you very much, Mayor Borotsik . Mr. Borotsik: Thank you very much, Mr. Chairman. Mr. Chairman: I will call Ms.

Brenda Leslie from the Manitoba Association of School Trustees, our next presenter . Carry on, Ms. Leslie . Ms. Brenda Leslie (Manitoba AHociation of School Trustees): Thank you very much. I would like to sincerely thank the committee for extending their lunch break to hear our presentation before they break. We certainly appreciate it. Mr. Chairman, Mr.

Minister, committee Members, on behalf of the 57 school divisions and districts of Manitoba, I am pleased to appear today to provide our comments on Bill No. 79 and some of its implications for the members of the Manitoba Association of School Trustees and the communities that we serve. In opening, I would like to express our appreciation to Mr. Robert Brown , provincial municipal assessor , for providing an excellent briefing to representatives of our association on the significance of Bill No. 79.

We recognize and appreciate the focus of this legislation on the reform of the assessment process is to ensure fairness . School boards are not actively involved in the 203 process of prop erty assessment. However, we do apply our local scho ol division levies to the existing assessment base, just as the prov incial Governmen t uses the existing assistant base to collect its educationa l support levy.

Because of this reliance on proper ty assessment to raise funds for education, we applaud the work that has been done to enhance that basic principle of fairne ss as realized thro ugh assessmen t reform, and MAST endorses many of the steps being taken to ensur e quality in assessme nt. We appreciate this opportunity to make our observations on aspects of this legislation which are of particular interest and concern to public school boards.

Our association over the last number of years has taken pos itions which are suppo rtive of the establishment of a single assessment authority , supportive of assessment of all real property at current market value , sup por tive of the establishment of additional property classes, including a classification for charitable and non-profit organizations . We have been supportive of portioning of the valuation of each class of property to ensure that each class continues to contribute approximately the same to the total assessment base . We have been supportive of assessment and taxation of farm residences.

We have been supportive of assessment of farms based on the value of the operation rather than the land value. We have supported retention of present tax exemption and have strongly supported exemption of all school division property from taxation . The removal of the provincial Government's Education Support Levy from farm land and outbuildings is a move that will be welcomed by Manitoba school trustees . The application of the Education Support Levy to farm land raised some $20 million last year. This was offset by approximately $16 million in tax credits .

This peculiar process has created the impression that the province's educationa l taxes are greatly inflated and contributes to general misunderstanding of educational taxes . We also appreciate that the new tax Bill will report separately the Education Support Levy and the school division's special levy. Previously, these were reported as a total only, and taxpayers were unable to distinguish between school taxes levied by their locally elected trustees ·and those taxes levied by the provincial Government. This change will promote greater accountability at each level.

The removal of the exempt status from residences of public and private schools is a matter of some concern. The statement that additional financial assistance will be provided to schools affected is too vague to provide consolation. Specifically, we would seek assurance that the taxes levied on the residences of public schools will be fully offset by gran ts and that these grants will be ongoing rather than transitional in nature . However, our comments in this regard are superseded by our concerns with the limited exemptions available to school divisions for their properties.

Provision of a flat 10-acre exemption for schools and property is an improvement over the current situation which now only exempts four acres and requires

Wednesday, January 3, 1990 ministerial approval for exemption of a further six acres. This change will simplify the process and ensure that the same exemption is received in all cases. We are however concerned about the adequacy of the 10-acre limit given the size of some of our high school properties. Because we received the information on Bill No. 79 at such short notice, we were unable to obtain the data that might be relevant to the limitation that has been put on the 10 acres.

We were unable to obtain this information from the Public Schools Finance Board and I guess we would ask this committee if they have been provided with that information and whether they could assure us that the 10-acre limit is indeed adequate? We have however a fundamental concern about the principle of taxing any school division property for municipal purposes. Currently, only school division holdings used for instructional purposes qualify for this exemp tion. Bus ga rages, school board offices, administrative buildings, school holdings larger than 10 acres and vacant schools are all subject to taxation.

We question the rationale for levying municipal taxes on the property of public school boards. School buses and admin istrative offices are essen tial to the effectiveness of the experience within the classroom itself. There is also a strong argument that can be made for the merits of extensive green space as a complement to outdoor education or agricultural program ming. Decl ining enrollment is one of the most di fficult problems facing many of our school divisions. lt is often resulting in the closures of schools. To impose a new tax after a school has been closed is not justifiable.

Many properties essential to the operation of a school division are currently subject to municipal taxation. The cost to school authorities of this municipal tax Bill will surely increase significantly as a result of more thorough assessment practices. Under current legisla tion, municipalities are not req uired to pay either the Education Support Levy or the school division special levy. Their property is exempt under the current legislation. The Manitoba Association of School Tr ustees believes that the converse should also be true. Properties owned by a school division should be exempt from municipal taxation.

We urge you, as members of the committee reviewing this legislation, to introduce amendments to exempt all school division properties from municipal taxation. In conclusion, I would like to state for the public record that Manitoba school trustees continue to urge this provincial Government to reduce the reliance on property taxes as a means of funding public school education. Although provincial Governments, past and present, have agreed in theory with this principle, their actions to date do not appear to support that principle. *

(1220) We look forward to real progress in this area when later this month the Mi nister of Education and Tr aining (Mr . Derkach) will announce the level of funding for public schools for the 1990-91 school year. Recognizing that, the implementation of this legislation will present 204 difficulties at a variety of levels. We encourage the various Government departments involved, particularly the Department of Education and Tr aining, and Rural Development, to ensure that all affected parties are kept informed and consulted as they implement this new Bill and legislation process.

On behalf of the Manitoba Association of School Tr ustees, I thank you for this opportunity to make presentation to you this morning. Mr. Chairman: To Ms. Leslie, I guess the first of the questions are-Mr . Taylor. Mr. Taylor: Ms. Leslie, one of the main points you make is about this exemption and the size of the exemption, in fact, the acre cap that is discussed.

You say, well, it is an improvement but-your suggestion to the comm ittee is that you did not have ample opportunity to analyze the legislation, nor were you given a presentation which said this is the rationale for having within the Department of Rural Development determine that 10 acres is the solution. Is that the case then? Ms. leslie: We were not on the preferred list of this dr aft legislation in June. We received information on this legislation three working days ago. We would like to have data to provide to you in regard to the 10- acre limitation.

We really cannot make an informed comment on the 10-acre limitation because we were unable and did not have the time to obtain that information. Mr. T aylor: In the last sentence of your opening paragraph though, you said you did get some sort of a briefing, or the representatives of MAST did, from Mr . Brown. Ms. leslie: We did, three working days ago. Mr. Taylor: Okay, all right, that was what I was trying to- Ms. leslie: I am sorr y. Mr. Taylor: Okay, thank you very much.

Earlier in the public delegations, the Manitoba Health Organization also talked about this exemption for hospital land, a similar sort of exemption. They said the same thing, it is better, but-. The position they took was that there should be no acreage cap that it should be total. I really am seeing the same thing in this presentation. Institutions such as hospitals, schools and the support facilities for both, however, do put some demand on municipal services and municipal infrastructure.

Has there been discussion in MAST that while they do not wish to be in the position of being taxed, because they are in effect another form of government, another level of government, that there should be something that comes across to the local municipalities to compensate them for that which they have to provide to your members' school boards? I am asking specifically about some form of pass through, either directly from the province, or pass-

Wednesday, January 3, 1990 throu gh, through the school boards to the municipal Gove rnm ent, which would pay for that which you consume in the form of municipal services, and at the senior levels of Government they are called grants in lieu. The federal Government does it virtually 100 percent. Much of the provincial buildings and lands pay to the municipality grants in lieu that are virtually 99 percent, 100 percent equal to what the taxation levy would be.

In short, has there been discussions within MAST of there being a similar sort of a setup to deal with paying for those municipal services which are consumed? Ms. Leslie: MAST does not certainly have a policy statement, nor have they discussed tax assessment and how taxes should be decided at the provincial level. I think it is important to note that school divisions have one taxing base, and that is a property tax.

When the municipal jurisdiction imposes a taxation on their prope rty, school divisions go to property owners to collect that tax, and as in the case of hospitals and as in the case of municipal properties, it does not serve the public interest to take money from all of these levels in order to pay the same kind of maintenance. I think municipal councils have sources of revenue that school divisions do not have available to them . Does that answer your question? Mr. Taylor: It does somewhat, and I guess what you are pointing out, Ms. Leslie, is the limitation on the ability to tax. Ms. Leslie: That is correct.

Mr. Taylor: The limitation is similar, but a little broader at the municipal level, and it gets broader as one goes up the hierarchy of our national structure. I guess the point I am concerned about is that by the luck of the draw certain facilities and institutions can be in one municipality and not in another . Therefore, a certain municipality can have very real costs in the sense of services and capital as well to serve those institutions. In this case we are talk ing school board facilities.

How do you come to a fairer way to make sure the municipality is fairly dealt with and at the same time do not put a burden on the school board? I wondered if there had been any sessions within MAST, any discussions or brainstorming sessions which talked about totally different approaches to deal with this very real situation . Ms. Leslie: I think the question you are asking me is whose responsibility it is to pay the taxes on publicly owned property, and the truth is that the highest percentage is dependent upon property taxes.

School division property is publicly owned, the same as municipal property is publicly owned, and it is maintained by the public tax dollar . Again, if school divisions incur the costs of higher taxation on their property, their only means of raising that revenue is to go back to the local property tax owner to pay that additional taxation. Mr. Chairman: Before we carry on, the time is 12:30. What is the will of the committee? Do you want to continue on? Mr. Taylor: Complete this delegation , Mr. Chairperson . Mr. Chairman: Okay. Mr. Taylor. Mr. Taylor: Thank you very much. Ms.

Leslie, you mention about the fact that there are municipal tax levies today on various types of school board facilities . Has that to date included taxes on empty or partially empty schools , or has it only been on the support facilities, i.e., the garages, the grounds maintenance buildings and school board offices? Has it only been the latter? Ms. Leslie: I understand as soon as a school building has closed and is no longer being used for instructional purposes , that property is taxed, and I think that has been evidenced throughout rural Manitoba.

A lot of our single story old school buildings that might be nice to cont inue to have had in our rural communities have been taken down, because they have been taxed when those buildings have become empty. Mr. Taylor: Does that also apply to the context in the larger schools in the various divisions when the buildings are partially empty? In other words, would a par tial tax be imposed if, say, 30 percent or 40 percent of the classrooms were no longer in use, but the balance were? Would there be partial taxes imposed, or was it only in the context of a totally unused building? Ms.

Leslie: To my understanding, only if a building is no longer being used for instructiona l purposes will that building be taxed. Mr. Taylor: In the case of then a building

Document details

Collection	Manitoba — Debates (Hansard)
Citation	34-2-ma8
Type	hansard
Volume / chapter	34th 2nd hansardpdf ma8.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	4bdaa10246031032accc5363b2d6050b64c981a8

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