Third Session, 42nd Parliament

(2022) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Thursday, October 6, 2022

Afternoon Sitting

Issue No. 227

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Orders of the Day

Committee of the Whole House

Bill 28 — Municipal Affairs Statutes (Property Taxation) Amendment Act, 2022 (continued)

P. Milobar

Hon. S. Robinson

D. Ashton

B. Banman

T. Shypitka

B. Stewart

R. Merrifield

L. Doerkson

THURSDAY, OCTOBER 6, 2022

The House met at 1:02 pm.

[Mr. Speaker in the chair.]

Orders of the Day

Hon. M. Farnworth: I call continued committee stage, Bill 28.

Committee of the Whole House

BILL 28 — MUNICIPAL AFFAIRS

STATUTES

(PROPERTY TAXATION)

AMENDMENT ACT, 2022

(continued)

The House in Committee of the Whole (Section

B) on Bill 28;

J. Tegart in the chair.

The committee met at 1:03 p.m.

On clause 1 (continued) .

P. Milobar: Again, clause 1, just some more overarching questions for the

minister, as we then get into more of the detail in 2.

We touched on the regional districts. I know the minister would

like to just move on from that. But again, there are the areas, as the

minister has acknowledged, around UBC and Cultus Lake and other

high-population areas in the Metro area especially, but likely in the

capital regional district area as well, where we’re currently taking

this debate.

It seems that there wasn’t the thought to include them in. How

difficult…? The minister says to try to not delay the legislation, but

this has been questioned and talked about and brought forward to this

chamber for the better part of four years now.

[1:05 p.m.]

It seems that the fastest and easiest way would be while you’re

doing a review of which clauses within the Community Charter, within the

Vancouver Charter, and then, by extension, the Local Government Act. The

fastest and most effective way to do that would be to do them all at the

same time.

If we do finally hear from the regional districts, because they

were cited by the minister several times as being part of the reason

this needed to take an extra few years, how fast could the minister and

the ministry have complementary legislation in front of this

chamber?

Regional district areas like those around UBC are feeling pressure

as well, especially as SkyTrain starts to be developed. How fast would

that be in front of this House? Or would they be expected to wait

another three or four years — and by extension, those businesses that

are impacted have to wait another three or four years — before they get

the type of relief that the people who could be literally right across

the street from them would be receiving from the city of

Vancouver?

Hon. S. Robinson: I want to welcome everyone back from lunch, and I want to assure

the member that I’m happy to talk about regional districts. I don’t know

where he’s getting this sense of urgency to move along, except perhaps

from local businesses that are looking forward to seeing this pass in

the Legislature. But I’m happy to talk about regional

districts.

Again, I want to reiterate to the member that this was first

raised — I actually did a little bit of digging — as a concern back in

2010, when members opposite were on this side. In fact — I checked —

there was no action taken at that time. We started hearing about it in

2019 — again, after we formed government — and started to take a look at

it, and that’s when things were actioned.

That’s when we put in the interim…. We worked quickly to get an

interim solution while we did the significant heavy lifting that people

in the ministry had to do in terms of consulting, understanding where

the pressures were, how to work with a very complex tax framework that

currently exists and find the right tools to use that would deliver what

needed to be delivered. That was a significant undertaking done in

consultation with the business community, with local governments,

understanding what we were all looking to achieve and the best possible

way to do that. And so this is here before the House.

I want to assure the member that right now we haven’t heard

anything from regional districts, including the one that he is

mentioning. But staff assure me that now that we have a framework that

is in place, it would be more easily accomplished to create a tool for

regional districts if it is requested and desired.

P. Milobar: Well, I guess again we’re trying to get to the root of why they

were left out of the consultation, why they weren’t asked. I don’t know

many local governments that would say no to added flexibility within

their own tax rolls, given that it’s up to their discretion whether they

want to implement or not, to action this or not.

The regional districts were repeatedly cited by the minister. So

why did the minister not instruct her staff, who have been working on

this for three years, to proactively engage with regional districts to

make sure that the Local Government Act actually did not have what has

now turned out to be — and I’ll use the UBC area as an example — an

inequity between areas within the electoral area around UBC and the rest

of the city of Vancouver that borders right on it, when they are both

facing the same types of development pressures, assessment growth issues

and pressure on those businesses on those parcels?

[1:10 p.m.]

Hon. S. Robinson: I want to remind the member that it was regional districts — in

fact, it was the Cariboo regional district — that didn’t want it. Again,

regional districts aren’t saying that they want this tool. In fact, they

voted against it at the UBCM. So it’s for that reason it did not make

sense to invest the additional time and energy that would be required to

have a tool when we know that businesses and not-for-profits in urban

centres have been asking for something.

Again, I want to correct the record. It’s been two years that

we’ve been working on this. We said that we would…. We created an

interim solution, given the heavy lifting that needed to be done, the

amount of analysis that needed to be done, the amount of understanding.

Remember we’re working in a complex system, with 189 different local

governments.

Regional districts were clear that they did not want to see a

blanket. They did not see that they…. They did not support a UBCM

resolution looking for this. So that also fed into our system. Having

said that, if there is a regional district or electoral area that sees a

need for it, we’re certainly willing to take a look to see how we can

fit them within this framework.

Now that the framework has been established, it will be,

certainly, another piece of work to see how it would work for regional

districts. But I don’t want to hold up an important piece of legislation

to adapt this legislation before us to a group that has not requested it

and, in fact, has voted against it.

P. Milobar: Well, I’m sure the rest of the regional districts will be

surprised to hear that the Cariboo regional district speaks for all when

it comes to regional districts. Here’s the problem with everything the

minister just said. It, in fact, passed at UBCM. It was 46 percent

against, 54 percent in favour. Votes at UBCM are not separated between

regional districts and municipalities. Everyone votes equally, and it

gets blended together. So it wasn’t a regional district vote at UBCM,

and the vote itself was not against this concept.

In fact, on March 2, in 2020, this is what the minister had to say

in this chamber. “We certainly heard opposition to the resolution that

was proposed at the last UBCM, with delegates from Victoria, Cariboo

regional district, Whistler and Lantzville arguing that implementing a

new commercial subclass would create challenges around fairness in who’s

in and out of the subclass.”

Well, the interesting thing is that the minister seemed to take

100 percent that Cariboo regional district meant no regional districts

wanted this, yet seemed to ignore Victoria’s concerns or Whistler’s

concerns or Lantzville’s concerns and still forged ahead with the

Community Charter.

Again, the question is: why did the minister not proactively reach

out — especially to the regional districts that would be greatly

impacted by this, like Metro — when there was already supposed to be

consultation happening with the broader Metro area to begin with? Why

was the board of Metro Vancouver…? Why was the electoral area within

Metro Vancouver the only piece of consultation that didn’t seem to

exist? The business groups were talked to. Mayors were talked to — some,

at least, not all.

It seems that the Cariboo regional district carried a fairly good

heft with the minister when it comes to why regional districts shouldn’t

even be consulted. But the city of Victoria was totally ignored, because

they had the same opinion.

Again, why no discussion with the electoral area in and around UBC

and Cultus Lake, where we know there are these exact same types of

pressures, which is now going to lead to further delay for relief for

businesses in those areas?

Hon. S. Robinson: Well, UBCM was certainly at the table. They were part of the

consultation, and they are the body that represents all local

governments. I’m happy to read into the record what UBCM had to say

about this piece of legislation.

Again, I want to remind the member that we were working as quickly

as we could over the last couple of years. In spite of a pandemic, staff

have been working diligently to get to work on this, knowing the

pressures on businesses in almost exclusively urban

situations.

So we have before us a piece of legislation that will help deliver

the relief that businesses and not-for-profits are seeking. Staff have

not heard from any regional district seeking this. They have, however,

heard from municipal governments, so that work is focused

there.

[1:15 p.m.]

The UBCM said: “The legislation introduced today addresses a

concern that has been raised by UBCM members.” This is from Jen Ford,

the president of UBCM, the new president. “This change enables local

governments to provide tax relief for commercial properties that have

seen dramatic increases in the assessed value of their land. Local

governments were consulted as part of the process of developing this

legislation.”

UBCM, I want to remind the member, was at the table. They

represent all local governments. She goes on to say that she welcomes

the province’s action to address this issue. To suggest that there

wasn’t any representation from regional districts is actually not

accurate, given UBCM’s participation. They represent all local

governments.

As I’ve said to the member, and I’m assuring this House, should we

hear from a regional district where, typically, you don’t see these

sorts of pressures…. Should that arise, staff would be happy to

undertake an analysis to determine how to best deliver for regional

districts. Again, regional districts tend to be more rural in nature.

It’s not always the case, but that is the tendency. To date, we have not

seen or heard from any regional district in the province that has asked

for this kind of tool, given the kind of jurisdiction that they are

responsible for.

Clause 1 approved.

On clause 2.

P. Milobar: A few questions around the sections that have been added here —

198.1(1), and it’s around the definition of “development

potential.”

I know the minister may feel that I’m trying to be difficult here,

or she will probably by the end of my questions on this

section anyways,

but when I read “development potential,” it seems to be a contradictory

explanation for how you get to the calculation.

So: “‘development potential’ means the difference between (

a) the

assessed value of a property, and (

b) the actual value of the property

determined taking into consideration only the actual use of the land and

improvements that comprise the property and not taking into

consideration any other use to which the land or improvements could be

put.”

I guess the question I have is…. My understanding is that B.C.

Assessment would come in. Part of the reason we’re here today is because

B.C. Assessment does look and take into consideration the other use of

the land that could be put, and that’s how you wind up with your

assessed value that’s creating the problem.

If the calculation is the difference where you subtract the two….

So (

a) is the assessed value of the property. That’s created by B.C.

Assessment, and that’s created on the highest and best use of the

property. Then you’re supposed to subtract away the actual value of the

property.

Who will be making that valuation of the existing footprint? B.C.

Assessment typically is the one that makes all of those valuations. I

don’t see anything in here that says who would be the designate to say

that no, in fact, because of the land and the existing use, it’s really

only worth X. B.C. Assessment says it’s worth Y because of the

higher-use potential. Who will be the one to make that determination of

what the lower value is to get you that other half of the equation you

need?

Hon. S. Robinson: It’s B.C. Assessment that will provide those values.

P. Milobar: Just to be clear, B.C. Assessment would only bother going through

those types of calculations if they’re asked by the municipality, by the

landowner? Or will it be an automatic assessment? When the original

assessment comes out, they’ll have a secondary assessment sitting on the

books for people.

[1:20 p.m.]

Hon. S. Robinson: The municipalities will be able to ask for it from B.C.

Assessment.

P. Milobar: My understanding is that we get our assessments in the fall. A

typical homeowner would have the ability to appeal, but it has to be

filed within a very short time frame to get that appeal.

Would municipalities, to ask for this secondary classification, be

subject to that same time frame? Or is B.C. Assessment doing this

completely independently, and it’s dependent on when municipalities

decide to pass a bylaw exempting, or not?

Hon. S. Robinson: The roll is completed in the winter, and municipalities can ask

for it as soon as the rolls are complete.

P. Milobar: Yeah, I get that they could ask as soon as the roll is complete.

I’m wondering: when is the deadline that they could ask for it after the

roll is complete?

Again, if I’m a homeowner, I have a very short window of time to

file an appeal. My understanding is that October 31 the properties have

to have the use on it already so that B.C. Assessment can conduct their

assessments properly with the business operating on it. But

municipalities have until the spring to get their taxation bylaw in

place and set their rates as they normally would any other

year.

It’s during those discussions, typically, that the municipalities

would start trying to decide whether or not they’re agreeable to doing a

tax shift, because this is what it is. If they’re providing relief to

that business property, to that business owner, unless they cut their

taxes collected as a city, they need to then move those dollars over to

all the other rate classes.

I know the minister fully understands this, as well, but that

would all happen at the same time while you’re developing a budget,

because you’d have to know just how impactful this is going to be to

other ratepayers and which rate class you’re going to put it to. Are

there other commercial properties? Is it heavy industry? Is it

residential?

What timeline has been built in? I don’t see the dates anywhere in

this. That’s why it’s important that I think people get an

understanding, especially in municipalities with brand-new councils

coming in. What timeline will they have to actually be able to action

B.C. Assessment coming in and providing that secondary valuation that

they could then use to figure out what type of taxation they’d be

waiving or not?

Hon. S. Robinson: Well, typically, the rolls are finished by December, and they have

until May 15 to pass their bylaw. It’s within that time frame that a

municipality, I would imagine….

I would hope that in January, early on, they would identify what

their plans are around helping these particular property owners and ask

for them as soon as they can to get these evaluations so that they could

carry on making their appropriate plans that they need to do.

P. Milobar: What types of conversations have been held, then, with B.C.

Assessment around staffing, around resources? I would assume that they

would just be: “That’s the time frame.” They’re just coming off of

finalizing things. They’re finalizing all of the appeals that get filed

on a regular basis. If they’re like every other organization, once you

finish a real busy time, that’s when people start to look to go on

holidays and things of that nature.

What types of discussions have been held with B.C. Assessment

around their capacity to be able to deal with any reasonable volume of

actioning by municipalities on this type of a measure?

[1:25 p.m.]

Hon. S. Robinson: I want to assure the member that B.C. Assessment has been part of

the working group, so they are fully aware of the additional activities

that would need to be undertaken, and they are fully prepared to support

municipalities, particularly through this first go-round, which I think

will be a learning opportunity.

Moreover, we’ve heard from B.C. Assessment that they are prepared

to help local governments, and staff are eager to help local

governments, around bylaws and preparing them, given that this is new

legislation and a new tool. We’re really eager to help them be

successful in helping not-for-profits and businesses with some of these

additional challenges that they face.

P. Milobar: What mechanism, then, with these valuations, is in place? What are

the dates and timelines for an appeal?

A municipality appeals to B.C. Assessment to go out and give a new

valuation based on just existing use. They provide that to the owner,

and the owner still takes issue with that and says: “Well, no. Actually,

you’ve well overvalued the existing use.” Although they are getting some

form of tax relief, it might not be as great as they actually should be

eligible for. The regular appeal process timelines would have come and

gone.

Does the municipality have a new extended appeal process for this?

If so, what are those timelines, and what’s the process that has been

developed?

Hon. S. Robinson: I want to just remind the member that the assessed value of the

property is the assessed value of the property. That isn’t changing with

this bylaw. If any business or any property owner wants to challenge the

assessed value, normal procedures apply.

What is different here is that the actual value of the property

determined gets taken into consideration, which B.C. Assessment is

providing the municipality. The municipality can use that information to

help determine how to apply this bylaw.

If a business owner, a property owner, isn’t pleased with the

bylaw, then they can take that up with the municipality.

P. Milobar: But the new mill rate that that business owner would pay would be

predicated on the valuation. It’s a backwards calculation.

The problem is…. Just to use round numbers, if a piece of land is

worth $1 million, according to B.C. Assessment…. The landowner and the

municipality agree for some form of tax relief under this. B.C.

Assessment comes in and re-evaluates for land only — not the highest and

best use of the land but the existing use of the land — and they say

it’s half a million dollars. But the landowner says: “That’s still not

right. It should be $300,000.”

Is the minister saying that there is no appeal process for that

new valuation — that it’s whatever B.C. Assessment says that shall be,

and there is no appeal process for the municipality or the landowner to

contradict what B.C. Assessment has come up with a land value

of?

[1:30 p.m.]

Hon. S. Robinson: I worry that the member might be conflating two different things,

so I want to be really clear that the assessed value of the property is

the assessed value of the property. There are regular appeal processes

that continue to exist. That doesn’t change.

The municipality is given additional information, should they

request it. Then the municipality can choose to give permissive tax

exemptions or not. They can also choose to not give permissive tax

exemptions. That’s at the local government level. They determine how

much relief and whether or not there is relief.

Anyone who feels that they should get more relief or less relief….

Not that I would imagine anyone saying, “Give us less relief,” but if

they wanted more relief, then they would take that up with the local

government and go through the proper processes around any other

permissive tax exemption that currently exists on the books.

P. Milobar: Thank you, but again, this is predicated on a municipality

deciding. If a municipality decides that these types of properties that

are being re-evaluated, reassessed, qualify to go from a mill rate of

$10 down to $5 per $1,000 of assessed value on the land, that is a tax

relief for that property owner.

One would assume that they’d be thrilled with that. But if that’s

capturing a dozen properties and one of those dozen properties feels

that they really aren’t, as a chunk of land, worth half a million

dollars and that they should only be at $300,000, that’s still a

significant difference to that individual business’s property tax

bill.

So although the municipality has taken action on mill rate, just

like they do with the homeowner, the homeowner then has the ability to

go to B.C. Assessment and appeal, and then there’s a recalculation the

city does if they lose a whole bunch of appeals, eventually. It takes a

little while to work its way through, but that’s the crux of it. This

will all happen well after those standard appeal processes are closed

for businesses or for homeowners.

So is there no appeal process for, I guess, the business owner to

appeal the new valuation that B.C. Assessment comes out with for the

land value?

Hon. S. Robinson: I was listening very closely to the words that the member was

using. No one is being reassessed. Their assessed value is their

assessed value. They can continue to use appeal if they feel like the

assessed value of their property is not accurate. That mechanism still

exists. It’s not changing.

The municipality can ask B.C. Assessment for the actual value of

the property on the actual use of the land, what the valuation is, based

on that. Then it’s up to the municipality to make the determination if

they’re going to use this permissive tax reduction, not exemption. They

get to determine not just whether or not they will receive it but by how

much. That’s a decision of the local government. The appeal process, if

that’s the case, would be with the local government, because the

assessment is the assessment. That isn’t changing.

P. Milobar: I understand. I think the minister is conflating the two things

I’m trying to say. That could be on me trying to explain it, so I’ll try

to separate this out once again.

I fully understand that businesses will get their existing

assessment notice and they’re going to have their existing time frame to

appeal that. However, that assessment is based on highest and best use

of the property, and they’re probably going to lose that appeal. They

generally do. They might have it shaved off a little bit, but that

appeal process has to be wrapped up.

They have to file, I believe, by January once they get their

notice at the end of October, beginning of November. They have a very

short window, as does every property owner in the province, to appeal

that assessed value. So let’s park that off to the side. I understand

that.

[1:35 p.m.]

What I’m saying is, after that appeal time frame is over, the

municipality, in their deliberations — they have until May-ish to make

this determination — says: “You know what? We’ve heard from enough

business owners that highest and best use is really hammering them this

year. So we’re going to deal with 20 properties. We’re going to reduce

the mill rate on the highest and best use down to $5 from $10.” They go

to B.C. Assessment, and they ask them to assess on actual use of the

property.

I’m talking about the actual use assessment that happens. That

actual use assessment comes in and says: “Yeah, it wasn’t really $1

million. It’s half a million dollars.” The landowner then says to the

municipality: “No, no, no. The other 19 all agree with their

valuations.” The one says: “It’s really $300,000, not half a

million.”

Is there no appeal process for that landowner to try to get that

assessed value of actual use to better reflect what they feel it is?

They might still lose the appeal. It sounds like the minister is saying

that’s 100 percent conversation with the municipalities. If they agree,

they agree. If they don’t agree, they don’t agree. But there is no B.C.

Assessment appeal process for either the municipality or the landowner

to then trigger to try to get a more reflective actual use valuation if

they don’t agree with that valuation.

Hon. S. Robinson: Again, I want to remind the member that we are providing

municipalities with wide discretion to pick the properties and extent of

relief using tax rates and assessed values, recognizing that because

municipalities are right on the ground, they have a better sense of

where tax relief is needed.

The actual value of the property determined, taking into

consideration the actual use of the land that is provided by B.C.

Assessment, is provided to the municipalities as additional information

that helps the municipality make the determination about how much relief

to provide. They can receive this information and decide not to provide

any relief. They could easily choose to do that.

So this is just another way to help local governments, because

this is part of what they’ve asked for, with information that allows

them to make the determination about how much relief to provide. If a

business feels that they should have more relief than what they’re

given, then it really is up to the local government to make that

decision based on some additional information that they’ve received from

B.C. Assessment.

However, I want to remind anyone who’s listening that the assessed

value of the property that comes from B.C. Assessment — they are free to

question that and to appeal that to B.C. Assessment.

P. Milobar: It sounds, in a roundabout way, like the answer is no. There is no

appeal mechanism if a munici­pality triggers the actual valuation

of the land moving forward. I’ll get into more detail on that as we get

to subset (4) in this clause.

[1:40 p.m.]

In subset (2): “For the purpose of relieving the impact of

development potential on eligible occupiers, an annual property tax

bylaw may impose property taxes under

section 197 (1) (

a) on eligible

land at reduced tax rates.” I’m just making 100 percent clear for the

record — and based on all of our back-and-forth already, I think it’s

abundantly clear, but let’s make sure all the landowners understand —

that this is not for any improvements on the land at all. This is

strictly land value that we’re talking about.

Again, to use simplistic numbers, if you’re at $100,000 of land

and a $5,000 assessed building, you’re still going to pay full tax on

the building portion of the assessment. It would just be the land

portion that the municipalities have the ability to try to structure a

different tax rate?

Hon. S. Robinson: That is correct.

P. Milobar: Again, these will…. Because this is such a long clause, with so

many of the details actually in it, I’ll bounce around a little bit. We

have the 95 percent factor: the land value has to be 95 percent of the

overall assessed value. So you have 95 percent. Again, we’ll use the

$100,000. So it has to be $95,000 worth of land, $5,000 worth of a

building.

Was there any discussion with that 95 percent calculation about

the worry of basically incentivizing what would otherwise be

well-maintained, smaller commercial operations to let themselves run

down so that the improvement on the property, the building on the

property, suddenly becomes only 5 percent of the overall assessed value,

versus actually encouraging people…?

As with most town centres, most tax revitalization bylaws, if they

deal with facades and things of that nature…. Municipalities are trying

to waive tax to encourage people to actually make their buildings nice.

This would actually have the opposite effect, where you’re actually

encouraging people to let the building run down to try to make sure that

they can meet the 95 percent threshold.

So why was that threshold created so high? Was there not concern

or discussion about the very real problem that this would actually be

counterproductive to trying to keep neighbourhoods looking nice and neat

and tidy waiting for redevelopment by actually encouraging business

operators and landlords to essentially let their buildings become

decrepit and dangerous-looking so that they can meet the assessed value

thresholds to get a tax break?

Hon. S. Robinson: Well, first of all, I’m very familiar with these properties. My

community office is right where some of that activity is happening in

terms of development potential. Remember these are about development

potential properties, where there have already been either neighbourhood

plan adjustments, some OCP adjustment, recognizing that they are

development properties. So we already see some of the concerns that the

member is suggesting with these properties.

Again, this is a good…. This can only be used for up to five years

per property, so letting it languish for 20 years is just…. This tool

can’t be used for very long. It’s only available to a property for five

years while we wait for the redevelopment potential. So the risk that

the member is suggesting is pretty minimal.

P. Milobar: My office is in one of those areas, as well, and tenants come and

go. It’s in a good condition building, but it doesn’t take long to have

buildings go from that to something else in a hurry.

[1:45 p.m.]

My understanding through the briefing was that staff had indicated

that the five years is there but that there is the potential for

extensions if the municipalities can make a case for it or wish to

extend it on.

Were staff mistaken with how they characterized that in the

briefing, or is the five years a hard, absolute stop?

Hon. S. Robinson: Again, let’s go back to what the intent of this legislation is.

Local governments — I know that the member was a mayor and that the

member next to him was a mayor — know what their communities need when

they’re looking to redevelop. Where there are neighbourhoods that they

identify for redevelopment, they change the OCP. That creates the

problem that we’re trying to fix. It is up to the local government to

help move things along, using the tools that they have. So we have put

in here up to five years, as a tool in continuing to encourage their

redevelopment.

It’s really up to the local government to make the determination,

based on what’s happening on the ground. If they should need an

extension for whatever reason, they’d have to make a case for it. That

tool could be made available to do that; that’s certainly a possibility.

What we’re all trying to do here — local governments, provincial

government — is to facilitate the redevelopment. That’s the reason why

we have put a time limit in — we also recognize that things can change

on the ground — and making sure that that’s available for the local

government.

I have not come across a mayor or a council that would be content

to see a series of run-down buildings in their downtown core and be

happy to continue to provide relief if it was detracting from the

overall health and well-being of their downtown core.

At the end of the day, what we’ve heard from local governments was

that they wanted the flexibility to be able to make decisions based on

the needs of their community. That’s why we have this as a permissive

tax exemption.

P. Milobar: Speaking of flexibility, as I read this, currently under the

Community Charter, if you do a tax exemption area, you have to have a

fairly defined purpose and outcome for it. It cannot be

business-specific. You can’t just target doctors’ offices, for an

example. There has to be a broader geographic area. If you run a paint

store and you meet the criteria, you get the tax benefit. If you run a

doctor’s office and you meet the criteria, you get a benefit.

They can be used to help redevelop areas into housing. I’m fairly

familiar with the ones in Kamloops. When we first brought them in, we

had the ability for facade improvements in the downtown core. It was a

tight area that has been expanded over time, and what qualifies or

doesn’t qualify has changed over time as development ebbs and

flows.

You really had to prove to the province — to get those bylaws

approved, ultimately, by the provincial government — that there was a

very defined, targeted outcome that was desired. It had to be very broad

so it wasn’t seen to be targeting any one individual. This seems to be

able to have not only property-by-property exemptions, but two

properties, side by side, could actually have different rates attached

to them, it looks like. It does say that there are various rates in

various areas.

Can the minister confirm that if the member next to me and I had

properties across the street from each other or backing onto an alley —

where one might be on a transit line, and one is on the other side of

the street, technically — one could qualify for a totally different rate

than the other, and one could just be not qualified at all by the

municipality?

[1:50 p.m.]

Hon. S. Robinson: First of all, I need to make sure that the member understands you

cannot set the rate property by property. It’s one rate. I think that’s

really important to understand. Also, there are some provincial

eligibility criteria that must be met in order to make use of this

bylaw.

It must have land and improvements in class 5, light industry, or

6, which is business and other; may not be split-classified with any

other property class other than class 1, which is residential; may not

receive any other exemption from municipal taxation, to be subject to

land assessment averaging; must be occupied as of October 31 of the

previous tax year; and must have a class 5 or 6 land value that is a

minimum of 95 percent of the total class 5 or 6 assessed value, which we

canvassed earlier. That makes them eligible to use the bylaw.

Now, the other thing is that while the proposed legislation gives

wide discretion to municipalities to determine eligibility and set

relief to target certain properties or areas, the relief provided must

be for the purposes of relieving the impact of development potential on

eligible occupiers. There is a requirement that municipalities must set

out the objectives and the policies in relation to the provision of

development potential relief in their annual financial plans. So they

have to be accountable as well.

Similar to other property tax relief mechanisms that currently

exist, like permissive exemptions, municipal councils are expected to

set their policies and objectives for the relief and are expected to

apply those policies in a fair and just manner. Municipalities must be

satisfied that the application of the relief is defensible within the

scheme of the legislation, as well as their own objectives and policies.

They need to be consistent in how this gets applied.

P. Milobar: Well, the reason I asked the question…. The first part of the

Minister’s answer gets a little confusing, then, and moving forward, it

could very easily be misinterpreted by municipalities and mayors,

councillors and administrators because, under clause 2, it says: “

(4) An

annual property tax bylaw may specify different percentages under

subsection (3) (

b) for different areas, properties or kinds of

properties.”

For (3), I’ll just read the whole. “

(3) An annual property tax

bylaw that provides relief under this

section (

a) must identify the

properties for which relief is provided, (

b) must specify for each of

those properties the percentage of the eligible land, comprising the

property, that is to be taxed at the reduced tax rates….”

The very next subsection is (4), which says that there are

“different areas, properties or kinds of properties” eligible at the

discretion of municipalities.

Is the minister now saying that that is in fact not the case, that

a mill rate adjustment on one area of town automatically has to take

effect if they choose to do other properties on the opposite side of

town? Or can they have a 50 percent mill rate reduction on the east side

of town and a 20 percent mill rate reduction on the west side of

town?

[1:55 p.m.]

Hon. S. Robinson: First of all, it is one reduced rate. Let’s say, for the ease of

example, the decision is a 10 percent reduced rate. As the member used

an east side and a west side, I’ll stick with the same

analogy.

Let’s say that on the east side of town, there is high development

potential. It has been identified as of high development potential,

based on decisions that the council has already made in their OCP

changes. The council could decide that the reduced rate applies to 50

percent of the land value. On the west side of town, there’s just some

medium or moderate redevelopment potential. So it’s the same 10 percent

reduced rate, but they’ll only do it on 20 percent of the land value, or

30 percent. That’s what this is.

Recognizing that there are different development potentials will

require different reductions. You pick one reduced rate, but it’s a

percentage of the land where that reduced rate could be altered — based

on the decisions of the council on their OCP changes,

typically.

The Chair: I’m going to recognize the member for

Vancouver-Kensington.

M. Elmore: I seek leave to make an introduction.

Leave granted.

Introductions by Members

M. Elmore: I’m very pleased and honoured to welcome the grade 11 class from the

John Oliver Mini School digital immersion program. It’s the first time

they’ve been on the road all together in person. They’re just a great group,

very dynamic. It’s a terrific program that they run in Vancouver-Kensington

at John Oliver. They’re very active and engaged.

They’ve been here in Victoria overnight and have been busy in making

the rounds and visiting different activities and locations. It has been a

real pleasure. They are here with teachers Thomas Hoffmann and Irving Lau —

great young leaders. I’m so happy they’re here. I’d just ask everybody here

to please welcome them and to give them a very warm welcome to our

legislative chambers.

Debate Continued

P. Milobar: It sounds like councils would have the discretion to confer more of a

discount on taxes to one property owner than the other. I understand it’s

the percentage of the land value, but ultimately it’s dollars out of the

bank account that a business owner cares about. Their tax bill would be

reduced more, if a council deemed it, in one part of the city versus the

other.

That’s not unlike the current permissive tax exemptions, where they

can set different parameters on different parts of the city. That I

understand. For further clarification, though, I get back to the example.

We’re back on the east side properties. They’re both slated for high-density

development.

They both meet all the criteria, but can the city, through this,

decide that one qualifies and that one does not qualify, simply because

they’re a block apart?

Hon. S. Robinson: As I said earlier, they would have to justify that distinction. They’d

have to have a policy in place that identifies why that’s the case.

Typically, we would imagine that one would have a higher development

potential than another. That would be an example of why you would have that

sort of distinction.

P. Milobar: If they both qualify in that area, can they do, “Well, you qualify for

50 percent of your land value,” but “You qualify for 20 percent of your land

value,” so that it’s not all or nothing but that they can actually decide

different percentages of land value that they’re going to reduce?

[2:00 p.m.]

Hon. S. Robinson: Yes, they could, as long as they’re consistent with their policies. It

has to be grounded and acknowledged about how it is that these different

properties are treated differently, and they have to have that shared as

part of their own accountability.

P. Milobar: I guess the question to the minister is: accountability to who? I

don’t see in here who they would be accountable to. If you go to override an

official community plan, there’s a process in place for that. They could

confer more density on a property that previously wasn’t slated for that in

the OCP, but there’s a process to go through that. You go through a council

meeting. You need, I believe, a two-thirds majority vote if you’re amending

an OCP, not just a standard majority. There’s a public process, but it’s

local. It’s not provincial.

So is the accountability for them picking and choosing the properties

strictly within their own community and their voters and landowners? Or is

it a provincial override? In other words, is the province having to sign off

on every single one of these exemptions that might be granted?

[S. Chandra Herbert in the chair.]

Hon. S. Robinson: Again, this needs to be in the property tax bylaw as well as in their

financial plan that goes through local government processes. I’m sure, as

the member was mayor, he remembers those meetings well — the various

readings that have to be undertaken.

That’s where the accountability lies: with the people that they

represent. They have to demonstrate, just like with any other permissive

tax, activities that are currently being undertaken. That has to be part of

their property tax bylaw, part of their financial plan. That’s what they’re

accountable to — the people who vote for them.

P. Milobar: So if I’m hearing correctly, then, the province has no oversight. If a

landowner feels that they have been unduly put upon compared to their

neighbour, their only appeal process is to appeal back to mayor and council,

if they even have an appeal process in place. But there’s no avenue for them

to interact with the Municipal Affairs Minister or the Finance Minister to

appeal the decision that they may feel is unfairly impacting them and

providing a benefit to a competitor right across the street.

Hon. S. Robinson: Again, I just want to remind the member that this is no different than

other permissive tax opportunities that currently exist for local

governments to use. It is at their discretion. They could choose to not use

any of this at all. The landowners then need to take that up with the local

government that is making those sorts of choices. This is in the hands of

local governments to make choices.

We are giving them a tool to use in order to help ease some of the

challenges that businesses and not-for-profits, I believe like in the

member’s own community…. I believe I’ve heard from the Chair how challenged

some of his constituents have been — and eagerly awaiting the passage of

this legislation to urge the city of Vancouver to use this so that they can

get the relief that they’ve been seeking for some time.

[2:05 p.m.]

Again, I want to remind the member that there is an avenue with the

local government, whether it’s participating in public hearings — around the

tax bylaw, around the financial plan — being involved at council meetings,

and following through with local governments, who are decision-makers around

property tax and who will now have a tool to use to help provide the relief.

If there are some concerns with how that is being applied, then the local

government is the right place to take those concerns.

P. Milobar: The minister referenced that Vancouver was clamouring, waiting for

this to come forward. If memory serves, the minister in her previous role as

Municipal Affairs Minister brought in a temporary measure. I believe she was

not the Finance Minister yet. I believe she was Municipal Affairs, but I

could be corrected. Either way, she was…. I’m 100 percent sure she was a

minister. That was supposed to provide temporary relief and temporary tools

for municipalities to use until this piece of legislation came

forward.

Could the minister share with us what municipalities have used any of

those temporary measures that were brought in over the last couple of

years?

Hon. S. Robinson: I was Minister of Municipal Affairs back when we brought the interim

measure in. We worked as quickly as we could, given the significant

pressures that we were hearing, particularly for small businesses and for

not-for-profits — particularly in Vancouver, but certainly in my own

community of Coquitlam and other communities as well.

We were hearing that there were some significant and sudden changes in

the valuation assessments of developable properties. So it was for that

purpose that we worked quickly to bring in an interim legislation that we

said was not the permanent fix. We knew that it was flawed, but we felt that

this was an important step to take, given that there needed to be lots more

consultation happening with business, with local governments, with B.C.

Assessment.

I know that the member is likely to bring up private members’ bills,

and I’m happy to describe how it would not have worked, given the analysis

that we did. We looked at every single suggestion that came to us, and we’ve

done the analysis. I’d be happy to share it with the member, should he ask

the question.

While some municipalities did express interest, and they did look at

the interim business property tax relief legislation that we did bring in,

we did get some feedback that it was a bit cumbersome and complex to

implement on behalf of the local governments. For example, municipalities

felt that determining and verifying triple-net leases would be really

challenging for them — that they didn’t have the staff ability to do

that.

We brought the legislation in, if you recall, in March of 2020 — the

very first week of March — and we all know what happened ten days after

that. Everybody downed tools, and everybody pivoted to addressing COVID and

a COVID response. So it’s in that context that we didn’t see this interim

legislation get picked up by anybody. However, we continued to do the work

of bringing in a permanent fix, which is the legislation we have before

us.

We continued, and I want to give kudos and raise my hands to those

that did partner with us: the staff from various municipalities who worked

closely with our team, folks from UBCM, from the business community, from

the round table who consulted with us to help us identify exactly what we

needed to do in order to find the kind of legislation that would provide the

much-needed relief. We have heard from our partners that we consulted with

that this will certainly help move everyone in the right

direction.

P. Milobar: Could the minister then point us to where and what in this bill is

substantially different that gives her confidence that this will actually be

actioned by local governments, given that the temporary bill…? What in this

bill is different than the temporary bill, given that it sounds like not one

municipality actioned, for even one property, the temporary

legislation?

[2:10 p.m.]

Hon. S. Robinson: There are a couple of things that make this easier for municipal

governments. It’s part of a sort of existing framework that they have for

imposing tax rates on eligible land. So they already have the tools on how

to do that. This authority is an extension of the regular

property-tax-setting authority, and the usual requirements for passing a tax

rate bylaw apply. That makes it, certainly, familiar to them.

We also have removed what was burdensome, which was the triple-net

lease piece, which they said was too hard to check. So we’ve removed that.

That’s not a requirement in this legislation.

There was one other thing. Getting additional information from B.C.

Assessment to help them make the decision is also different. Those are the

three biggest changes that would make it simpler and less cumbersome for

local governments to use.

P. Milobar: Again, keeping with what seems to be some contradictory push-and-pull

within this piece of legislation, it seems that on the one hand, to this

point, the minister has been talking about how this gives municipalities

ultimate flexibility, ultimate autonomy.

There’s no appeal process back to the province. It’s strictly to the

mayor and council. The mayor and council can choose which properties qualify

or not. They can choose what rate of tax applies or not, the percentage of

the land value that will be exempted or not, which part of town it is in or

not and, even within that same portion of town, if things are different or

not. There’s no feedback to the province for the landowners in that area to

appeal.

On the one hand, it sounds like the minister is trying to say, “We

trust you, municipalities,” and then there are a bunch of clauses that say

they don’t. I guess I’m looking for better rationale as to 95 percent of

land value needing to be the qualifying mark, instead of letting

municipalities decide, given that they’re the ones that have to cover off

and shift in the taxes and account for that with their own

taxpayers.

There’s no provincial money coming into any of this. Why have they

been hamstrung by a ratio that will essentially tell people you either have

a derelict building or you don’t qualify?

Hon. S. Robinson: Again, I want to remind the member that this is really about

development potential properties. This was what we were trying to target and

trying to address. This is what we certainly heard from municipal

governments. Trying to identify how you determine development potential is

certainly a challenging one. But it’s one where…. Again, I want to thank the

public service partners that we had from a number of local governments that

worked with our staff to do some analysis about what it should be, what it

should look like, to identify what development potential properties

are.

It’s not like there is a definition for them somewhere in a B.C.

Assessment book anywhere, so trying to really understand and, again, narrow

the scope for what properties we’re talking about. That is what local

governments were looking for. They wanted to have some sort of working

definition.

Properties with development potential have a high land value because

they often have a dated or fully depreciated improvement, and most of the

value, of course, is in the land. So staff determined, using data analysis

in consultation with this core group of municipalities as well as with B.C.

Assessment, that a ratio of at least 95 percent would ensure most properties

with development potential would be eligible.

[2:15 p.m.]

This was the work of folks on all sides of this equation coming

together and making sure that this would work. That’s what these very smart

people did, from all of our various component parts, from the province, from

local governments, from B.C. Assessment, to try to find exactly how to work

with and develop a new tool.

P. Milobar: Well, B.C. Assessment…. The whole reason we’re here is because B.C.

Assessment has been assigning development potential for properties for years

now. That’s the root of the problem — that B.C. Assessment overlays an

official community plan and says that this property with a little, small

grocery store on it is not highest and best use, that it needs housing, it

needs more commercial space, it’s land heavy, building light.

So they’ve already assessed and increased charge on that. They’ve

already determined, by way of their assessments…. And in fact, they’re going

to continue to do that. And then we’re going to phone them up, if you’re a

municipality with this bill, and say: “Oh, could you come back and reassess

it for actual use?” We’re going to ask the same people to come back and

reassess it. Those people have already determined development potential

properties.

Given that they’ve already identified those, the 95 percent is

essentially saying to the small grocer who has had a piece of property — and

there’s many of them out there, especially in larger centres — where they

ran a small store of some form….

They’ve owned it for 45 or 50 years, and the property all around them

has grown in value exponentially. They just want to operate, and they want

to be able to pay reasonable taxes. What this bill is telling them is: “Stop

taking pride in your building. Let it run down if you want to qualify for

the next five years for a tax break.”

Why so little trust in municipalities that you would bind the hands of

municipalities to make a judgment based on their own neighbourhoods, their

own development, on what they would like to see as storefronts while

awaiting development?

Why tie their hands so tightly with a 95 percent threshold, which will

greatly reduce the ability for municipalities to try to bring any type of

meaningful change in the short term and will lead to a cavalcade of property

owners going to B.C. Assessment to appeal their assessment? Not the land

value — they’re going to start appealing their improvements, because they

need the improvements to plummet in value to qualify.

Why was there not more flexibility given to municipalities? Why is

there a lack of trust in municipalities — that on something like this, they

don’t know what’s good for them, but on a whole bunch of this other stuff,

they do?

Hon. S. Robinson: I want to back up what the member said, because I think he needs to

recognize that it’s local governments that make the decisions about where

they’re going to be forcing or pushing or urging or encouraging development,

and they do that through their OCP change. I know that the member knows

that. Local governments make those decisions, and then that is what creates

the added value of the land. It’s not like B.C. Assessment, out of nothing,

decides to make changes. It’s usually because there’s been an OCP change.

That stimulates the change in the land use.

If you are living in a residential area and it continues to be a

residential area, then the market value is really about how things are

selling in your neighbourhood. But if the local government makes the

decision to change the OCP and put higher density, medium density into that

neighbourhood, then the land values are going to go up. We know that. We

have seen it. We have experienced it. So the local government already starts

the process by making that decision.

So the way to recognize that is to have a tool that the local

government can use in conjunction with that to ease the pressures in the

interim until the redevelopment happens. Again, it’s still in the hands of

the local government. The member is somehow challenging that it starts with

B.C. Assessment, and it doesn’t.

[2:20 p.m.]

If local governments are choosing to leave things as they are, then

they don’t make OCP changes; they leave them as they are, and things

continue as they are. This is a tool that allows local governments, at their

initiation, when they make an OCP change saying: “We want more density….”

That pushes on the land value — not on the building value, on the land

value. That allows them to, then, provide some relief while waiting for the

redevelopment to happen.

This is what local governments asked for, and this is what we’re

delivering here with this legislation.

P. Milobar: I didn’t indicate that B.C. Assessment invented development potential

assessments. In fact, I referenced that they overlay an OCP as they do their

assessments.

It’s just not something that’s brand-new and difficult, as the

minister had suggested in her previous answer. It has been well defined for

quite some time how this development potential assessed value comes into

play. The minister didn’t come anywhere close to answering the question that

was actually asked.

Municipalities have been asking for flexibility and the ability to

deal with this. This bill ties their hands by saying: “We don’t trust you to

give a tax break to anyone unless the land value is 95 percent of the

assessed value.”

If your building is worth 6 percent, you can’t qualify. If the

building is worth 7 percent, you can’t qualify. No matter how much the

municipality wants to try to help you out, you don’t qualify. You know how

you qualify next year? You let your building run down a little bit more, and

you appeal it to B.C. Assessment. You hope land value goes up a little bit

at the same time. Next thing you know, you’re at 95 percent, and then you

can qualify.

By this bill…. The minister doesn’t seem to trust that municipalities

reasonably know what is having trouble trying to redevelop and what they

would like to see for a streetscape, while properties are going through very

complex development processes to get everything in place.

They’ve got to work with the municipality around servicing of the lot

to make sure that the water and sewer capacities are in that area. They have

to figure out parking. They have to figure out all the engineering. They

have to figure out all of the geotechnical work and the subsoils. That is

all going to take a year or two, even at the best of times, let alone with

the shortage of all the professionals, let alone a shortage in municipal

planning departments.

Why has the minister chosen to tie the hands of municipalities and

say, “We trust you, except we don’t really trust you to make a decision on

behalf of your own town unless it meets this, essentially, 5 percent

criteria,” and have a derelict building sitting on a property, instead of a

reasonably nice-looking building, that everyone knows is slated for

demolition sometime in the next five years?

The Chair: I will go to the Minister of Finance.

I see you as well, Member. Just one second.

Hon. S. Robinson: I suspect the member down the way is going to introduce these lovely

students. So I’ll take my seat, if I might, and allow her to introduce the

students.

M. Elmore: I seek leave of the House to make an introduction.

Leave granted.

Introductions by Members

M. Elmore: I’m very pleased to welcome here a grade 12 class from the John Oliver

Mini School digital immersion program.

The members met the grade 11 students. They’re being led by teachers

Teresa Laumen and also Pat Lee. Parent Sandra Boehm is here.

Just a terrific group of students who have been here, very dynamic,

very energetic, very engaged, really future leaders in our community and in

our province. I’m pleased they’re here to be able to hear the deliberations

of the municipal affairs statutes — that’s what we’re doing here — and to

hear some of that process.

They’re hard at work lobbying their MLA to increase support for the

mini school. They want to see a safety crosswalk put in, and they want to

see more support for community engagement. So there you go.

I’d ask everybody to please give them a very warm welcome

here.

[2:25 p.m.]

The Chair: Welcome to the students.

Debate Continued

Hon. S. Robinson: Welcome, JO students. It’s lovely to see you here. We’re doing a

lovely back-and-forth as we go through a very exciting bill related to

property tax in local government.

Members opposite are in the opposition, the King’s loyal

opposition. It’s their job to ask questions and make sure that the

legislation is good and sound.

Welcome to healthy democracy. It’s good to see you

here.

The member had asked about local governments and why we have

drafted this legislation and presented this legislation looking at 95

percent of the value in the land. Perhaps the member wants to talk to a

seatmate about what local governments have been asking for, which is

exactly this.

They wanted a framework, and they wanted a structure. They asked

us very specifically. “Don’t leave it wide open. Give us a framework

that we can operate in.” So we sat down with them and their

representatives, together, to figure out what would be the right

balance.

This is what collaboration looks like when you work with the very

order of government that is asking for a tool. You sit down with them,

and you co-create a tool that is going to work for them. That’s exactly

what we’ve done, and that’s why you see this in this piece of

legislation.

P. Milobar: Well, this appears to be structured to work for only the most

expensive properties in, frankly, the Vancouver-Surrey area. This

doesn’t take into account the very real pressures that would be faced in

centres like a Kelowna, a Kamloops, a Prince George, redevelopment

areas, a Langley.

Where the building is likely still in reasonable repair, it’s not

going to meet the 95 percent threshold, but it’s still going to be a

very onerous tax hit to the owner trying to redevelop the property to

accomplish the goal. They can’t, by no fault of their own, speed things

along any faster than they can. Yet they’re still going to continue to

get hammered, because the municipality has no flexibility.

If the goal of this is to take properties that are improvement

poor and land rich and get them redeveloped, why does the improvement on

the property, which can only be 5 percent of the value — so on a lot of

properties, not a very attractive-looking building…? Why does that

actually have to be occupied with a tenant that would likely not really

want to be located in a property that has now become run-down and

derelict, waiting for the inevitable redevelopment to happen?

Hon. S. Robinson: What the member describes is exactly why this is here. Local

governments don’t want their streetscapes boarded up while the landowner

chooses not to redevelop but gets a tax break. This is about…. You get

the tax break if there’s somebody in the property.

Remember, these are the small businesses that were struggling

under this burden. That’s who this is for. It’s not for the land

developer who might be just sitting on a boarded-up property. We want

them to redevelop it.

This works really well for local governments, in terms of making

sure that there’s somebody occupying these buildings. You don’t wind up

with just boarded buildings all the way down your main street, and these

landowners are getting a tax break. That would create the opposite of

what we’re trying to do here.

P. Milobar: Well, they would only get the tax break if the local government

gave them the tax break. They have zero flexibility because of the 95

percent. They’re forced to try to get people into these

properties.

Municipalities, quite easily…. I could see them actually having a

criteria, an internal criteria. Are you in the development application

process? Are you actively seeking a building permit? Are you engaged

with our planning department? If you’re not, you’re probably not going

to qualify for the tax break over the next five years, because you’re

nowhere near going to actually be up and running with the

development.

[2:30 p.m.]

This bill seems to be at cross-purposes. If the stated intent is

to help business owners to be able to afford to stay in business, you’re

forcing them…. The only way they qualify is to let their physical

building run down enough while still trying to stay in business so that

they can qualify for a tax break at 95 percent. It does make sense when

you overlay it with the “must be occupied,” but the “must be occupied”

doesn’t make sense with the 95 percent threshold.

Municipalities surely have more than enough wherewithal within

their operations to understand and set their own criteria. They’re going

to have to set a whole bunch of other criteria anyways, based on this

legislation, to justify who qualifies or doesn’t qualify.

To set a 95 percent ratio of land value versus improvement ensures

that just like the temporary measure, no municipality is going to

meaningfully be able to engage this to provide what is supposed to be

relief for business owners that are feeling unfairly taxed because the

tax on their current operation and property they’re operating out of has

absolutely nothing to do with what they’re currently doing. It’s all

about future development potential.

Mr. Chair, saying all that, I have an amendment ready to go. So I

propose to introduce an amendment at this time.

The Chair: Thank you, Member.

I’d ask if we can just stand in recess for a moment so we can

distribute the amendment to all the appropriate parties, as is the

case, in this House. So we’ll take a short recess to make sure

everyone gets a chance to look at the amendment and that it gets to

all those that are interested in seeing it.

The committee recessed from 2:32 p.m. to 2:35 p.m.

[S. Chandra Herbert in the chair.]

The Chair: Calling the committee back into session, on Municipal Affairs

Statutes (Property Taxation) Amendment Act, 2022, Bill

There is a proposed amendment.

P. Milobar: I’m moving an amendment on Bill 28, intituled Municipal Affairs

Statutes (Property Taxation) Amendment Act, 2022. Essentially, the

change is to strike out the provision of the calculation that 0.95

percent of the value has to be land to qualify for a municipality to

make a judgment or not.

[ CLAUSE 2 , by deleting the text shown as struck

out and adding the underlined text as shown:

(5) Land is eligible for relief under this

section

(

a) the land is classified as property class 5 or 6,

and

(

b) the property that includes the land meets all of the

following criteria:

(

i) the property includes an improvement that

(

A) is classified as property class 5 or 6,

and

(

B) was in use on October 31 of the taxation year

immediately preceding the taxation year to which the annual property tax

bylaw relates;

(ii) the property has a land-value ratio equal to

or greater than 0.95, determined by taking the quotient

(

A) the assessed value of the land that is

classified as property class 5 or 6, and

(

B) the assessed value of the land and

improvements that are classified as property class 5 or

( iii ii ) the property is not

disqualified under subsection (6).]

On the amendment.

P. Milobar: With your indulgence, I am able to speak to the amendment now.

This amendment is really quite straightforward. It’s really, as I’ve

said in a couple of previous questions and in diving into this bill:

you’re either in or you’re out. Municipalities are able to control

development in their communities, are able to make decisions based on

what their local taxpayers would like to see, what their local

businesses would like to see, and how they would like to guide

development in their communities.

Throughout this bill, and in questioning with the minister, she’s

confirmed that municipalities would have the flexibility to make

determinations on their own whether or not properties would qualify —

make determinations that would be appealed strictly to them. If a

landowner didn’t agree with the decision of the municipality, it does

not go back to the province for sign-off. It does not go back to the

province as an appeal mechanism. It does not go back to the province in

any way, shape or form.

It’s up to a local government to decide if there will be a benefit

to a business owner and a landowner or not, how much that will be, what

part of town it would qualify in or not. If it’s in a high-density area,

a planned high-density area, it can qualify for more than in a

medium-zoned area. All of those provisions are flexible for the

municipality.

The problem is that the clause I’m trying to remove would bind the

hands of municipalities, which would say that if a property has 6

percent of its value in the building, it doesn’t matter that the

municipality wants to help out that building owner and the business.

They’re not allowed to. They’re suddenly not adult enough in the room to

be able to make their own decision for their municipality.

They will be making these decisions, as the minister has pointed

out and confirmed, based on having to shift property taxes around. So

they’re not going to do this lightly, because if they reduce down and

confer a benefit on certain properties, unless they reduce their overall

budget by the same amount, they’re going to have to shift those dollars

to either homeowners, which is never a very popular thing to do, or to

other commercial properties or to heavy industry. They’re going to have

to actually take responsibility for their actions.

The clause that we’re trying to remove does not allow them to have

that responsibility. It says: “No, municipality. We think you kind of

have the right intentions, but we’re going to make this threshold so

high that the only businesses that will qualify are ones that are

essentially derelict. And oh, by the way, if they’re derelict, you still

have to find somebody to actually operate it as a business, or they

won’t qualify, because it has to be actually operating as a business.”

The minister is not sure where I get that, but it’s right in the

bill.

[2:40 p.m.]

This is the problem. The 5 percent threshold will work very well

if you’re a small operation on a chunk of land that is zoned for

super-high density and is very expensive. But it doesn’t help the

business owner that’s on a piece of land that is zoned mid to just about

high density, who is still facing the same pressures of a jacked-up

assessed value but happens to take pride in their business, has a

well-maintained building, has a good clientele coming and going —

because, let’s remember, B.C. Assessment also assesses you based on your

business and how your business is doing — and you suddenly don’t

qualify.

Your landlord doesn’t qualify, which means you, as the small

business owner, have to pay 100 percent of the tax even though the

property right next door that has been allowed to run down to get under

the 5 percent suddenly gets a tax break. There’s nothing the

municipality can do about that — nothing. But with this amendment, they

would have something they could do about it.

Again, let’s treat municipalities like the responsible elected

officials they are, in charge of local taxation issues. That’s what the

whole municipal campaigns are about right now. So to say to them, “We’ve

brought this bill in — our temporary bill not one of you wanted to

action. But we still know what’s best for you, so we’re going to bring

in another bill where the only substantive change to the bill that

didn’t get changed was not this,” simply isn’t good enough.

I hope the minister can see the spirit of why we’ve made this

amendment. This is about not trying to chip away at the other clauses.

This is about trying to give autonomy to municipalities so that their

mayors, their councils, their chief financial officers and their CAOs,

along with their public and the community within that area, can actually

make informed decisions on how they want to guide the direction of

development in their communities.

There’s not a 95 percent threshold for property tax exemptions for

other forms of developments for municipalities. There doesn’t need to be

with this. The minister, coming off a failed bill that not one

municipality has used, I would think would want to try to make it as

accessible to municipalities as possible, because the worst outcome

would be that it’s actually getting used and providing tax relief to

businesses.

But simply having a piece of legislation on the books where the

minister can then try to walk away from the problem of skyrocketing

business taxes on development properties doesn’t actually help the

business owner if it’s not an accessible piece of legislation. It

doesn’t help the municipalities if it’s not an accessible piece of

legislation.

By removing the 95 percent and letting municipalities act like the

adults in the room in their own council chambers, we’re letting

municipal councils, municipalities, towns, residents take control of

their own redevelopment in their own towns to try to spur on growth that

they need, to try to bring actual housing and actual new mixed-use

commercial developments into their areas that they are so desperately

wanting to see happen, without overly penalizing the existing small

business operator on that property who right now is facing no

relief.

Under this bill, if it stands without this amendment, they would

continue to see no relief moving forward, as past history has proven by

the temporary bill that not one municipality actioned even once for one

piece of property.

So I hope people will support this bill. It keeps the spirit and

the intent of the bill. It just provides municipalities the ability to

actually control their own affairs, as they’ve been duly elected to. In

fact, they’ll be duly elected in eight or nine days from now to do the

exact same thing moving forward.

Hon. S. Robinson: To the J.O. students, the member across the way decided that

perhaps he had an idea to change this bill, and so now we’re debating

his suggestion.

[2:45 p.m.]

Frankly, I’m a little bit confused because earlier, as we

discussed an earlier clause, the member was suggesting that there needed

to be an appeal process, that local governments couldn’t be trusted. Now

he’s speaking out of the other side of his mouth, suggesting that we

absolutely have to treat them as the adults that they are. So he has to

pick a lane. That would be great, but he seems to be contradicting

himself.

There was something else that the member said that I thought was

really quite interesting. He was talking about allowing buildings to be

derelict and then you can’t rent them out, that that would be bad, and

then they couldn’t get the tax relief.

However, if you don’t let your building get derelict and you rent

it out, then you often don’t pay the taxes, because, as a result of a

triple-net lease, it’s the tenant that pays the taxes. It really is

folly to allow your property to become derelict so that you can no

longer rent it out, and then you have to take on the burden of the

property tax. It’s a little bit inaccurate to suggest that that’s how

these landowners operate.

I also want to remind the member that there is a revitalization

tax exemption that local governments…. It’s another tool that they could

use, should they deem it appropriate. There are a number of tools that

local governments can use. But given that the member has taken it upon

himself to suggest that we eliminate this 95 percent requirement, I want

to know which local governments he consulted with that would like this

tool, because we spent a considerable amount of time consulting with

local governments, and they were very clear with us that they wanted

this framework.

We’ve done the analysis with them about what that would mean in

their communities, and they were the ones who really appreciated having

this in the legislation. I’ll read again into the record what we heard

from UBCM, because they are the voice representing local governments,

who said that “this change enables local governments to provide tax

relief for commercial properties that have seen dramatic increases in

the assessed value of their land. Local governments were consulted as a

part of the process of developing this legislation,” and they “welcome

the actions that we’re taking to address this issue.”

So I would like to hear from the member who proposed this

amendment which local governments he consulted with in order to bring

this forward.

The Chair: We are still on the proposed amendment, just to be clear for

everyone.

D. Ashton: I would like to say ditto for ten minutes in a row, saying what my

peer from Kamloops north has talked about. With all due respect, I came

out of a small business — a small business that operated in quite a few

towns in British Columbia, in retail.

Back in those days, I knew the intricacies of what it takes to

have a business. Went through many ups and downturns that seem to

continue on an all-too-frequent basis. Used to be seven years. We’ve

come through one of the best times ever in the last 12 years, where

we’ve had tremendous opportunities in this province.

But right now we’re probably at the top of the bell curve, or on

one side of it. Hopefully, we’re still on the uphill side, but I don’t

think we are. I think we’re about to start sliding down on the back side

of it. Development is a great way to revitalize your community and your

downtown core. Myself, as the minister and as my peer from Kamloops

north…. We’ve come out of local government, and that’s what you want to

do. That downtown core is the heartbeat of your community.

The opportunities that redevelopment gives to the community keeps

accentuating how important downtowns are, but when you start bringing in

taxation as a municipality, on air and the possibilities that may or may

not happen on there, and leave that up to the individual businesses,

whether it’s a triple-net lease or whether it’s a gross lease, the taxes

still have to be paid.

The taxes in a triple-net lease are being paid by the tenants. The

taxes in a gross lease are being paid by the tenants. If the tenant is

the landlord and is looking forward to something that’s going to happen

in the future in the area, all of a sudden, he’s stuck with these

incredible tax increases that this high-density development takes. I

really think that by the amendment suggesting that the 95

percent….

[2:50 p.m.]

I take a look at the buildings that (1) we leased and (2) we

owned. A 5 percent value in a building, especially in recent

construction costs in the valuation of a building, whether it’s a

middle-aged or older building, is very, very difficult for anybody to

reach that load, to say that a building’s only worth that much

money.

I would hope that there might be some flexibility — to the

minister and the ministry staff — to really take a look at this. Because

I think what we’re trying to do…. My hat’s off to government saying,

“Look, we are trying to extend something that may help facilitate those

tenants, those landlords, those owners that are caught up in this

taxation block that is now popular in some areas in the community and in

the province where they are taxing ‘air.’” Here’s an opportunity. But

the parameters that appear to be set on this….

Again, I’m going and sitting here listening to the minister and

listening to my peer from North Kamloops. I’m looking at it as a

“previous owner” and a “previous renter” who paid the taxes. It goes

both ways. I’m thinking: “How would this fit?”

To be frank, my family owns an old, old building, built in 1904,

that is fully occupied, with four tenants. It is old. It could sure use

development. The family bought it in 1992 to redevelop, and my dad

passed away, and we put a hold on things and have limped it along up

until this point. But I can tell you right now that the valuation of

that building is a heck of a lot more than 5 percent.

Yes, the municipality where it’s at would love to have it

redeveloped. No, I’m not being charged airspace on it at this point in

time. But if it were there, I would have a hard time trying to get B.C.

Assessment down to a 5 percent value on the gross amount of assessment

of the entity of the land and the buildings. I just don’t see it as

possible. It’s been mentioned that if it were a derelict building, it

doesn’t qualify, because it’s going to have to be occupied. I just don’t

see what kind of business would be in a building where the percentage is

5 percent.

Don’t forget that B.C. Assessment also takes a look at income.

They not only take a look at the gross value of the property, but they

take a look at the income. I would really just ask that the minister

think about this and really consider this, along with her great staff

from the ministry, to take a look and make this so that it’s a little

bit easier to fit into what most places are asking for at this point in

time.

Also, as a mayor, I can remember when the multiplier effect…. In

the community that I was fortunate enough to represent — Penticton —

there was talk, in a downturn, about taking that multiplier charged to

commercial and industrial and adjusting that. Well, the only place that

the money came from was from residential, because commercial properties

don’t vote. Industrial properties don’t vote. But residential properties

do. The cries of anguish that came from the municipality and the

citizens…. Council backed away from it.

I would just really like to ask if the minister — and those that

she is working with in the ministry and those that she has talked about,

that she has consulted — would take another look at this and make this

more applicable for all the communities that are affected at this point

in time directly and the tenants/owners and any other communities that

may be affected by this within the five-year parameter that is being

talked about. Let’s have another good, sober second look at this and try

and make it so that it is more applicable to more.

Let’s keep those downtown cores as the heart of our communities.

Let’s promote the expansion. Let’s promote the redevelopment so that we

keep the shine on that downtown core entity that we are all so proud of

in our communities.

[2:55 p.m.]

The Chair: We are still on the proposed amendment, so we’re not into

question back-and-forth, as in committee stage, because we’re

discussing the amendment. Are there other speakers to the amendment

before we…?

B. Banman: We’ve heard the Premier talk about how we all need to be in a

collaborative effort, that in times like now, both sides of the House

need to work together.

I talked about this the other day. I also was the mayor of the

largest city, by land, in British Columbia. A lot of people don’t know

that Abbotsford is actually the largest city by land in British

Columbia. Yet in spite of that, the developable land that’s left is

actually pretty much reduced, and we all agree that going up versus out

is better.

We want to densify. We want to see multi-use. But here are a few

things that need to be considered. Not all cities have the Lower

Mainland super-high skyrise densification that’s possible. Many of these

cities are going to be mid-rise. They’ll be five, maybe six storeys

high. They’ll be wood construction versus, perhaps, concrete. They’re

not going to be skyscrapers, but those still drastically affect the

value of the land.

In addition to that, a city comes in with its OCP, and they do

neighborhood plans. What happens is that you say: “You know what? This

is what’s going to be allowed in this particular neighborhood.” The day

after that happens, it drastically affects the value of the land. But in

many cities, what you now need to do is actually get all of the pieces

of property together. You need to assemble those pieces of property

together to actually build a viable project. So what then ends up

happening is that it can take literally years to assemble all

these.

Now what’s left are small businesses. In all due respect to the

minister, the tone deafness of, “Just let the small business pay for it.

Just let the legion pay for it. Just let the social groups that happen

to be there pay for it. Let the places like the Foundry pay the excess

taxes,” is what we’re trying to point out. What I hear from the minister

is, rather than sit back and say: “Maybe this side of the house has an

idea that we hadn’t considered….” I talked about how the devil is always

in the details. Well, here’s a devil one right now.

Charity groups that happen to be, are now going to be charged for

the airspace. The landowner isn’t going to pay that. That’s going to

fall on the backs of the charity. Not all charities have permissive tax

exemptions from cities. Small businesses. We’ve already heard of small

businesses in Vancouver that were forced to close their doors because

they could not afford the air tax. That’s kind of what has triggered all

of this.

What we’re saying is: allow the flexibility of the town council

to, on a case-by-case basis, figure out whether or not this particular

piece of property qualifies. By using 95 percent, it’s far too

restrictive. It’s way too restrictive. What I feel is happening is yet

once again, the other side of the House…. The government just decided

that: “No, our legislation is perfect. How could anything possibly be

wrong with it?”

[3:00 p.m.]

The other side of the House, even though we were all elected to

represent the people of this province…. “The opposition can’t possibly

have a good idea. They can’t possibly be right. We’re going to go ahead

with this anyway, as is.”

When I used to sit around city council, part of what could happen

is that you could have a position, but you were supposed to sit there

with an open mind and open heart. My colleague…. Well, you can see him

nodding. He will back me up on that. There were often times that I had a

position — that was allowed — yet I would hear one new piece of

evidence, and it totally changed my mind.

In this particular case, I don’t know why this government would

insist on punishing a charity by getting them stuck in a catch-22 based

on some made-up percentage. It makes zero sense.

I know the minister used to sit on city council and came from

municipal politics. For the life of me, I do not understand why the

minister is digging the heels in so strongly on this when damages to

small business, to charities, to user groups such as things like the

Foundry that traditionally are looking for exactly these kinds of

properties because they can get an inexpensive lease….

Well, the affordability of that lease vanishes instantly if they

are at 6 percent versus 5, and there is absolutely nothing council can

do to change that. We have basically tied council’s hands behind their

back. That’s not the intent of this legislation.

I commend government for bringing this legislation forward, but

for the life of me, I hope the government sits here with an open mind

and open heart and realizes that this particular detail, the devil in

this particular piece, is out of sync with what the overreaching goal of

the legislation is. I would hope that after five years, this government

would go and say: “You know what? There’s no shame in the fact that we

didn’t get it 100 percent right.” As a matter of fact, it doesn’t show

weakness. It shows great strength, and it shows compassion, and it shows

cooperation.

We hear the words of cooperation from government. Well, now is

your chance to prove it. Now is your chance to say: “You know what? We

think that this actually has some merit. We think that we can actually

trust the elected officials in their city, that know it best, to make an

informed, accurate decision on what works best in their particular

situation, in their locale.”

I am pleading with the minister to pay attention to this side of

the House. I am pleading with the minister to show that she actually

does believe in cooperation, that she believes that everyone in this

house was elected to represent all of their constituents. The failure to

listen….

What’s going to happen, as government decides to do this, will

speak volumes as to whether they believe in the legislation that they

put on this floor or not. This particular area is such a small,

insignificant little bit that can make such a huge difference in a

charity’s bottom line or a small business that’s just clinging

on.

[3:05 p.m.]

The minister said, rightfully so: “Hey, what’s the big deal? It’s

going to get passed along.” Well, if that happens to be the dance class

that she wants to take her children to, which can no longer afford to

pay those taxes and has to shut their doors, maybe the minister might

have a different point of view. And that’s what we’re trying to point

out here.

This amendment…. All it does is eliminate the land-to-value ratio

and put it in the hands of local elected governments, who know best what

is required by their city. This one-size-fits-all does not work, and

I’ve given some examples as to why. It may not be a 30-storey skyscraper

in Abbotsford, for instance. It may only be four or five storeys, but

it’s still going to be mixed-use. This allows that tool to be used by

local governments on a case-by-case basis. They’re going to do what’s

right by their citizens. They’re going to do what’s right on a

case-by-case basis.

There is no need for this particular percentage to be in the

legislation. It actually goes against the heart of what the legislation

is. I think that for once, the minister should listen intently to what

this side of the House is trying to say, because it is actually helping

the legislation, not hurting it. Furthermore, it’s not like the taxation

is going to come out of the provincial coffers. It’s going to come out

of local government’s coffers, and they will decide what’s best and how

to do that correctly, based on each individual situation that comes

before them.

Hon. S. Robinson: Well, we had two rousing speeches from members opposite —

absolutely rousing speeches.

Interjections.

Hon. S. Robinson: It can go back and forth.

What I find interesting…. I was listening very carefully, and I

want to thank the members for getting on their feet. But there was talk

of cooperation. That’s exactly what we did with this bill, to craft this

bill.

We cooperated with local governments. They asked for this

framework. They asked for 95 percent. I haven’t heard from any member

over there who they consulted with in suggesting that this be taken out.

Who did the member from Abbotsford talk with about whether or not this

would work for them? I’m going to guess he didn’t speak with

anybody.

We did the work of cooperating with those who are going to be most

impacted. We spoke with businesses. We spoke with the UBCM. We heard

from very specific local governments who worked with us, who came to the

table and cooperated with government to say: “This is what we need.”

They said: “We want a framework. We want you to give us a guideline, a

framework for how to make these decisions.”

As a responsive government, we said: “Okay. What would it look

like?” So we got to work. That’s what we’ve been doing over these last

18 months: working with those who are most impacted.

The member’s right. We didn’t consult with the folks on the other

side. We didn’t. We focused on those who needed the guidelines for

implementing this permissive bylaw. Let me tell the members opposite

what would happen if we adopted their amendment, which they consulted

with no one on: it will not get picked up. They said to us clearly: “We

want a framework.”

So what did we do? We put together a framework. Then we met with

them again, and we modelled the framework: “How would this work in your

community? What would it look like? We’ve pulled up the number of

properties. Would this work?” We tweaked it. We went back and forth

until they felt like this was a framework that would work for them.

That’s what working in cooperation means: working with the people that

are most impacted. So we did that.

What’s the member from Abbotsford talking about? He’s talking

about working cooperatively with them — members opposite — who consulted

with no one. Well, I hope that the members opposite will support the

bill as is, without the amendment, because that is what we heard from

local governments.

[3:10 p.m.]

I’ll read into the record, in case the member wasn’t here, what we

heard from UBCM, as a representative of local governments. I know the

member was a mayor and is very familiar with the role that the UBCM

plays.

This is what the UBCM had to say about this bill: “The

legislation…addresses a concern that was raised by UBCM’s members. This

change enables local governments to provide tax relief for commercial

properties that have seen dramatic increases in the assessed value of

their land. Local governments were consulted by government as a part of

the process of developing this legislation….”

They welcome the province’s action to address the issue. I think

we should be listening to local governments. They are happy with this

piece of legislation, and I look forward to all members of this House

supporting it, without amendment.

T. Shypitka: I take honour in speaking to this amendment here to strike out the

provision of the 95 percent threshold. We’re having some very spirited

debate here, and that’s a good thing, in the hopes of collaboration. If

it is such a unanimous decision by municipalities to hold to that 95

percent, then the flexibility shouldn’t be an issue, as they will all

stick to the 95 percent.

I was a business owner for a long, long time, and I can’t imagine

the layering of taxes that I would have encountered if I were still in

business today. The cost of living is going up, with high fuel prices.

We’ve seen taxation like never before from this government in the last

five years, quite honestly, and now the taxing of airspace and the best

usable space.

This Bill 28 is a good bill. We agree that the tools to

split-class and split-assess the value of the land is a good thing. It

was a bill that was brought forward about five times by a member on this

side. So we all agree that way. You know, the devil’s in the details.

It’s the tools that we use that will really utilize and bring the best

value to this bill for those businesses that are suffering right

now.

The 95 percent land value requirement is a bit of a…. I see some

inconsistencies with it. Land values in the Lower Mainland are extremely

high. Some of them are the highest in the world right now,

whereas, in

the rural areas where I live, in Cranbrook, and in other areas like

Kelowna, are not as high.

We heard the other day, in debate, that a local restaurant, a

White Spot somewhere down in Vancouver sold for a quarter of a billion

dollars — $250 million. That’s incredible. There is a high land value.

I’m sure it’s not all based on the improvements on that land. I’m sure

the deep fryers and deep freezes inside the White Spot restaurants

aren’t what’s making that $250 million. It’s all the land value. That

doesn’t transcend right across the province to every corner. The land

values become increasingly lower, which makes those thresholds harder

and harder to achieve.

I sat on city council for a few years. One of the initiatives that

we brought forward was a downtown revitalization incentive, which meant

that we would forgive some taxes for businesses that would spend money

to beautify — put money into — their buildings to improve the downtown

core, to revitalize it. Much to our pleasure, a lot of building

operators did that. They spent hundreds of thousands of dollars. They

put in new facades on the front, they put in new, energy-efficient

windows, and they really dressed it up in the town’s downtown core.

Cranbrook is the beneficiary of that.

This threshold may impede those types of incentives. Trying to

reach the 95 percent threshold should be allowed, for municipalities to

gauge the way they see their downtown or their commercial areas being

done. Without that flexibility — with it being hard-wired at 95 percent,

when land values in places like Cranbrook, or wherever in rural B.C. you

are, are a lot lower — it’s very hard to reach that 95 percent threshold

of land value versus improvements. So it does not incentivize businesses

to make those improvements on their lands and/or on their

buildings.

[3:15 p.m.]

I sat in debate yesterday, and all I heard, over and over again,

was this chant: “Local government knows best. Put it in the hands of

local government. We’re supportive of local government.” For the most

part of this bill, that’s what it does — except for this piece of

legislation or part of this bill that hard-wires 95 percent. There’s no

flexibility, no room. If a business is teetering on the edge and is

close to 95 percent, nothing doing.

Local government, all of a sudden, doesn’t know best, and it’s

provincial government that knows best. That’s what we’re trying to

trying to amend here, to give local government that flexibility so they

can customize their own approach to how local businesses will function

and who gets relief.

The Minister of State for Trade is here in the chambers. Yesterday

his quote was: “The government is coming to the rescue for local

businesses.” Well, I think, quite honestly, local government doesn’t

want the Big Brother of provincial government coming to the rescue. They

want to rescue themselves. They want to do it. They want to customize

their own approach to how municipalities run.

So I’m in total support of this amendment. I think we need the

flexibility. I think local governments do know best. I think we should

be putting it back in the hands of those municipalities and those

chambers and councils that operate them.

B. Stewart: I stand today to speak in favour of the amendment. I just couldn’t

help but think about the comments that the minister just finished

sharing with us here in the House. I think it’s great that the ministry

did a consultation in terms of trying to find out what that threshold

was.

I guess the question I’d ask the minister is…. UBCM is essentially

an organization that represents municipalities. It doesn’t represent, so

much, the communities. It doesn’t represent the business interest of the

people that are in those communities.

[J. Tegart in the chair.]

So I guess I value what UBCM does and represents, but it’s the

municipalities that are the ones that they represent. And in the

municipalities — when you say that you’ve consulted with them, Minister

— my question to you is: is it actually the people that are affected by

this?

The split assessment impacts the people that happen to rent a

business or that maybe own a building. The fact is that the surrounding

property around them has risen in value because, of course, there are

always changes to the OCP and those types of things, those issues that

drive property values up — the shortage of housing and the fact that

communities….

Like anything in the Lower Mainland, for the most part, but even

in our area, in the central Okanagan, we’re faced with a land shortage.

We’ve got a massive amount of land that appears to be undeveloped, but

it’s in the ALR. We have the lake, we have the mountains, and then we

have what land is there. So what happens is that because of that

shortage of land, prices….

People move in, and as we’ve seen in many communities, especially

communities that have desirable housing investments…. We’ve seen large

investments come into the marketplace that have driven values up without

regard to how much a business can actually afford to operate.

Minister, I think that the consultation you’ve done is flawed. I

think that it’s flawed because the fact is that when you’re talking to

the municipalities, who in that group…? How would you know, from your

past experience, about what the value of what cash flow means to a

business that all of a sudden is seeing assessments skyrocket? Because

through no benefit…. Nobody is doing a test on their business — their

business’s ability to pay those increased assessed values.

[3:20 p.m.]

The 95 percent, in your particular case…. I want to use a simple

example. Take a business that happens to, on the appearance, look very

successful. It maybe is very successful, as the member for Penticton

pointed out. They own different buildings. They lease buildings, gross,

triple-net — all of those different combinations of how one can

essentially operate a business. But at the end of the day, the

municipality is not looking at their cash flow or the profitability in

doing this.

That’s what the business community has been screaming out: that

they basically can’t afford the increased assessments. It’s through no

fault of their own. Essentially, it’s other factors within the

municipality. What I would argue, in this particular case, is why the

level of consultation that we have currently is lopsided. It’s because

the municipalities — I don’t know if it’s the people in council, the

bureaucracy or UBCM — are well qualified in what they do, but I wouldn’t

say they’re well qualified to run the business and know what the impact

of the increased assessments is going to be.

Now, Minister, I will tell you that at a similar point in time,

back in 2010, when I was the Minister of Muni­cipal Affairs, we

had the very same thing happen in Richmond. We had a broad-based change

in the use of lands after the Richmond Oval was built. We had all of

these businesses — autobody shops, small businesses that were down

around the Fraser River — impacted severely by the fact that Richmond

had decided, in its wisdom, that it wanted to up-zone all this

area.

There was no ability for these businesses to seek relief in

getting realistic values. All of a sudden, overnight, their property

values had shot up because of that. We were trying to work through that

with the city of Richmond. They’re not the only ones that have ever done

that, but I use that as a primary example. Although people were elected

to improve the community and build on those things — maybe it was their

decision — I would say that one of the things they wanted to do was to

drive those businesses out of those areas.

I mean, I know that there’s a lot that has gone on since then. The

River Rock Casino is there, and we’ve got the night market and other

things. At the end of the day, it drove those businesses to have to find

other locations to build their body shops and the other things — auto

suppliers, all those types of people that are in what was considered at

one time to be just industrial lands. Of course, it immediately impacted

it.

I believe that the amendment that has been proposed, Minister, by

the member for Kamloops–North Thompson is reasonable. It does put the

decision and the ability for business owners to not have to deal with

the provincial government, but being able to deal with their locally

elected officials about making the case as to what has happened in this

situation.

I might have a successful business that has a building that’s

worth $1 million on it, but if the land values have, all of a sudden,

gone to $40 million, as my colleague from Kootenay East just mentioned

here — I’d forgotten about it: the original White Spot location in

British Columbia — who would have thought that a place on West Georgia

would be worth that much money? I’m sure that they were pleased by that,

but it wasn’t the deep fryers and everything else that added to

that.

I just think that this is a practical way of doing it. If there

were more flexibility to local government, it would have allowed them to

deal with situations, municipality by municipality. I continue to stand

in favour of this amendment. I look forward to when we get a chance to….

Hopefully, Minister, we can find a way to convince you that there’s more

than one way to skin a cat on this one.

Hon. S. Robinson: Madam Chair, I’ll be brief. Again, it was interesting listening to

the member for Kelowna West, who was the minister in 2010, as he pointed

out. I believe they did do something for Richmond — it was around

SkyTrain, if I recall — but it’s interesting that they didn’t do

anything that was broader.

To be aware of the issue and not do anything broader is somewhat

disappointing, given that here we are 12 years later and that we have

local governments that have been asking for a tool. Again, I’m going to

remind the member that we worked with local governments — they told us

they wanted this — because it’s local governments that have to adopt the

bylaw. They have to adopt the bylaw. Without this, they will not adopt

the bylaw.

[3:25 p.m.]

What would be the point, then? It would be moot. All of our time

spent, all of the consulting that we have done with local governments,

all the consulting we have done with business — and they are pleased to

see this come forward — will have been for naught by taking out the one

piece, the one piece, that they asked us to put in the legislation,

which was: “Give us a framework for making the decision.”

We modelled this for them. We walked them through it in their

communities. We looked at the communities where this was the greatest

pressure, and we engaged them. We modelled with them how this would

apply. We want this to work for local business, we want this to work for

the not-for-profits, and we want this to work for local governments, but

this is the piece that makes it work. If local governments see it

without this piece, they’re going to say: “We don’t want to touch it.”

Then where would we be?

Again, I want to say to the members — I know that there are more

who are going to speak to support it: think very carefully, because

everything is in Hansard , and I will be happy to let your

communities know that you want to take it out. The very thing that your

local governments have been asking for, you want to take it out, because

you want to make political hay in some way.

Fine. You get to do that, but it’s not based on the real work that

we have done in cooperation, in collaboration, with business and with

local governments. That’s what staff have been doing for the last 18

months: to try to find a solution that works for everyone. That’s what

we have before us.

R. Merrifield: “Consulted with no one.” That is patently untrue. I just made a

list, just for myself, of those that I have spoken to since this bill

hit the floor. I’ve spoken to three chambers of commerce or boards of

trade, four city mayors, three city managers and at least 20 businesses.

That’s in four days.

I am but one of 27 of us that all have networks, connections. I

take offence to what the minister just insinuated and threatened. I am

connected to my community. I am on text message and in constant

communication with not only my mayors and city managers but also the

businesses who have taken it on the chin and begged for this split

assessment legislation.

I am very passionate about making this work, which is why I am

standing up in support of this amendment. We need to make sure it works.

I wish the minister to actually be reminded of who supported the last

failed attempt at this split assessment. As I was trying to google the

full letter from UBCM, I found the one from February 28, which was

actually in support of the last attempt at legislation on a temporary

measure. News flash: it didn’t work. It didn’t work.

This bill cannot have it both ways. We cannot be both downloading

the responsibility onto our municipalities and not giving them the

flexibility to make it work. Municipalities need both authority and

responsibility. If they’re asking…. I don’t know which ones you’ve

consulted with. I actually don’t know that, because it has not

transparently disclosed.

I would love to see the list. I’d love to see if the mayors and

the city managers that I’ve spoken to are in favour of this. News flash:

I know that some of the city managers and some of the mayors have no

intention of using it, because it’s not effective for their purposes.

You can’t have it both ways.

[3:30 p.m.]

The other quote that I’ll use are the very specific local

governments that have been actually addressed. This is too high of a

threshold. Let me just give some examples. If we have a situation where

the difference between the future zoning and the current is not a

high-rise, is not a 23- to 46-storey tower — which, news flash again, is

not a form of affordable housing, is not what we want, necessarily, to

see built everywhere — this is not going to work. That land value will

not be only 5 percent of the actual value.

Here’s another news flash: developments take time — too much time,

I would argue. In Vancouver, they can take up to ten years. That is ten

years of a building that you’re asking to depreciate and literally go

into disrepair. It has to be occupied, which means you need to have a

business in these buildings. I’m not sure what buildings are going to be

able to actually take on that amount of tax. What ends up happening is

that you’re going to have boarded-up houses and businesses.

Another thing that happens is that markets shift. While a

development may be planned for a particular area, or the city has given

zoning in a particular area of plans for housing or for office buildings

to take place, then it sits and pauses.

I’ll remind this House of the last recession that we had, which we

may be going into again, where we had an absolute freeze on new

developments — maybe not in certain locations, like the city of

Vancouver. If the city of Vancouver is the city that you sat down with

and went through all of the different aspects of how this works in the

framework, well, that’s not the rest of British Columbia.

The other thing that happens is that cities pre-zone. Cities have

official community plans that actually predict 20 years into the future.

What happens to those small ma-and-pa operations, the one- and

two-storey units that are being occupied currently? They go up, and the

property taxes are excruciatingly high. But 20 years? Are they going to

suffer through 20 years of high property taxes? No, they won’t. Are they

going to hit that only 5 percent of 100 percent? Well, no. The 95

percent land value requirement is just too high of a

threshold.

I won’t single them out, but I can think of three non-profit

agencies that currently operate in these one- and two-storey buildings

on land that is zoned for much higher densities. They’re bearing the

burden right now, unnecessarily, and split zones could have a very

positive effect.

Am I desperate? Yes. Do they deserve relief? Absolutely and

unequivocally. Does the fact that we amend this to take out that one

aspect of the 95 percent ratio make this unusable? I would argue that it

makes it more usable. Can you still offer that as a suggestion from

municipalities? Absolutely.

This amendment would eliminate that land value ratio. That would

actually make it more usable and give both authority and responsibility,

rather than just the responsibility, to our municipalities.

Hon. S. Robinson: Again, I listened as the member was speaking, and she clearly

doesn’t understand what we’re trying to do here.

The local governments asked us, very specifically, for a framework

like this so that they could apply it and understand the framework.

Again, as I said earlier in my remarks, if the member had been

listening, she would know that we consulted with most of Metro

Vancouver, as well as Victoria and Kelowna, on this framework. That is

exactly who we consulted with, because that’s where the bulk of these

sorts of very specific properties are.

[3:35 p.m.]

Again, we worked collaboratively and in cooperation with the local

governments that have been asking for a tool that would work for them.

If the member was listening…. I will say it again. Most of Metro

Vancouver, Victoria and Kelowna. It’s my third or fourth time saying

this into the record so that the member doesn’t have to go through

Hansard .

Again, as I’ve said, this needs to stay in the legislation.

Otherwise, local governments won’t use it, and that would be really

unfortunate. It’s for that reason that we are not going to adopt and

accept this amendment. I know that the member is going to continue to

put it forward.

Interjection.

Hon. S. Robinson: Again, they keep talking about…. The member is heckling about

collaboration with them. But really, the people that we need to

collaborate with are local governments, because this is a tool for them

to use. I didn’t hear any of the members offer who they collaborated

with, in terms of making sure that they understood, in a meaningful way,

with the staff who would be responsible for implementing it.

It’s for that reason that we did a very fulsome consultation with

the business community, making sure that they understood what we were

trying to do here, with the local governments. It has taken us some time

to get here, but I’m thrilled that we got here. I hope that we can

continue to move forward with this bill this afternoon.

P. Milobar: There’s a famous expression about someone protesting a little too

much. That’s what it seems like with the minister and the various

rebuttals. Frankly, I’m a little surprised how agitated the minister

seems to be about a fairly straightforward amendment.

Let’s be clear. We asked about the consultation in the briefing.

The minister’s staff told us: “It’s confidential.” Well, the minister

wasn’t part of that briefing, but the minister’s staff made it very

clear. There was a specific question about consultation. Finance

Ministry staff jumped in and said: “It’s confidential.”

Now, the interesting thing is that this bill…. By the looks of the

clock, we’ll still be dealing with this bill when we come back. It won’t

be finished today. Why that’s interesting is because next week we’re

away for Thanksgiving. So I look forward to the minister — if these are

not confidential consultations — providing us, as an opposition, the

notes and the dates and the people involved in the consultation over the

next week so we can review that. So when we come back to finish up with

this bill….

Now, I know the government likes to charge people the $10 fee.

We’ll gladly pay that, if the minister would like that fee as well to

try to circumvent FOI. But my bet is that coming out of this afternoon,

when we try following up with the minister’s office, the response is

going to be: “You’ll have to FOI that consultation.” I would be glad for

the minister to prove me wrong and provide it for us, wilfully, Tuesday

or Wednesday next week, after the long weekend. It would give us the

time to review it.

Here’s the other thing. The minister asked: who did we consult

with on this bill? Well, I started off the questions pointing out that a

bill that impacts municipalities was brought to this House in the middle

of municipal elections. I guess I could have…. I don’t know.

There was a mayors debate last night and the night before in

Kamloops. I could have submitted questions to the mayors debate and

asked all the candidates, with an open mayors chair in Kamloops, what

they think of this bill — if they’ve read it, if they know what clauses

it contains. I could have done that across the province, but let’s be

realistic. That’s not going to happen, and rightfully so. They’re busy

in their own re-election campaigns.

So the minister can tout that all she likes. I have yet to have

been to a UBCM — after going to, well, 17 in person — to see local

governments say: “Oh no, government. Oh no, provincial government.

Please don’t give us more flexibility. Please don’t give us more

autonomy. We want you to bind our hands a little bit. Please, please. We

won’t be able to contain ourselves. We won’t be able to control

ourselves.”

[3:40 p.m.]

Removing the 95 percent, like this amendment does, does not weaken

the overall ability of a municipality to use this legislation. It gives

them more flexibility to use this legislation. The minister can say that

this was insistent on being in. When I asked the minister what

significant changes were different between this bill and her failed

temporary bill, which not one municipality for one property used in the

province, she didn’t say 95 percent was the make or break. She said it

was triple-net leases. That was the only significant change she said she

made — triple-net leases, not the 95 percent.

This amendment does not touch the changes to triple-net leases

that supposedly were the reason that no municipalities used this

minister’s failed attempt at previous legislation around this. That is

why we’re saying, simply put: let’s give municipalities more autonomy,

more ability to control what happens in their own municipalities, not

less.

Let’s have it line up with some of the other provisions in this

that do give them that flexibility, instead of clinging to something

that is: “Provincial government knows best. We don’t trust you to make a

responsible decision, so we’re going to tighten this down so much that

it could only possibly apply to a couple of properties here and

there.”

That’s not right. It’s not fair to the surrounding property owners

that should have the ability to properly lobby their own municipal

government to make sure that they’re treated just as fairly as the

surrounding properties around them. But this bill, as it stands, does

not allow for that. The bill, as we’re proposing to amend it,

would.

That is why we brought forward this amendment. That’s why we’ve

encouraged people to support the amendment so that municipalities can

actually be treated like the adults they are, like the responsible

decision-makers they are and actually control the taxation system within

their own authority without the government coming in, patting them on

the head and telling them they know best and that they’re going to

protect them from themselves with land values.

Hon. S. Robinson: Well, first of all, I want to correct the member. The interim tax

exemption that we brought forward did have a land value ratio in it. He

did ask me what was new and different from that. That’s why I didn’t

list it.

But I also want to point out that in the Vancouver Sun ,

October 4, Katie DeRosa interviewed Mayor Kennedy Stewart, and he said

in a statement that he’s pleased with the proposed legislation — this

legislation that’s before the House — which gives municipalities

flexibility to provide tax relief on a case-by-case basis.

He also said that depending on when the legislation receives royal

assent, it could be implemented as early as 2023 to provide immediate

relief to eligible properties. This is why we brought it in as quickly

as we did, early in the legislative session, so that it could be ready

for councils to consider, going forward. So again, this is about

providing the tax relief that businesses and not-for-profits have been

asking for so that it’s ready in time for the next tax year. That’s what

we committed to doing, and that’s why it’s before the House at this

time.

The Chair: Seeing no further speakers to the amendment. The amendment is

before the House to amend clause 2.

Amendment negatived on division.

P. Milobar: I’m just wondering if the minister can provide some clarity around

the bylaw that needs to be passed for municipalities to approve this and

move forward.

So many bylaws need to be approved, sent forward and approved by

the province befo