The $20 assessment of the air-traffic-control tower at Victoria International Airport is a narrow interpretation of the law that borders on the ridiculous. The B.C. government must alter legislation to ensure that such facilities pay their fair share of municipal taxes.
The B.C. Assessment Authority had set a value of $1.43 million on Nav Canada鈥檚 control tower and other properties at the airport. The Property Assessment Appeal Board slashed that assessment to $20, on the grounds that the property couldn鈥檛 be used for any other purpose.
The airport lies within the boundaries of North Saanich, which appealed to the B.C. Supreme Court, which upheld the low assessment. The ruling applies to other airports in Penticton, Pitt Meadows and Castlegar.
That means North Saanich will lose the $26,000 a year Nav Canada pays in property taxes. That鈥檚 a big hit for a small municipality.
This is quite the trifecta: A Canada-wide agency that doesn鈥檛 want to pay its taxes, a provincial Crown agency that doesn鈥檛 see why it should and a judge who wants the politicians to do the hard work.
The low assessment overlooks the intent of the property-assessment process. The aim isn鈥檛 to set a price for the real-estate market, but to determine what share of municipal taxes should be paid, an attempt to ensure taxes are paid in proportion to services used.
Market values are taken into consideration in the assessment process, and that link is logical in most cases. Before market values came into play, assessments were determined by a convoluted formula that was confusing and had little connection to reality.
But it is not realistic to say a control tower is worth only $20. And it is not fair to municipalities that build roads and provide services to such facilities. To be sure, the real-estate market shows few air-traffic-control towers changing hands these days, but the strict letter-of-the-law ruling ignores the spirit of the law.
鈥淪mall communities rely very heavily on every assessment,鈥� notes Sav Dhaliwal, president of the Union of B.C. Municipalities. He has called on the province to help develop a strategy to deal with Nav Canada鈥檚 campaign to appeal assessments of more than 120 properties in the province.
鈥淭here would be a major impact on [municipalities鈥橾 abilities to provide services they are committed to,鈥� said Dhaliwal.
A statement from the Ministry of Community, Sport and Cultural Development said that while the government respects the independence of the assessment appeal system and the role and authority of the judiciary in the appeal process, it is important to ensure stability and certainty for property taxpayers. The province also expects that all taxable owners and occupiers pay their fair share of reasonable property and school taxes, the statement said.
The statement said the ministry and B.C. Assessment are reviewing the implication of the court鈥檚 decision on any Crown-lease or public-use properties.
There鈥檚 a precedent. B.C. Ferries appealed the $47-million assessment of its Horseshoe Bay terminal. That appeal cut the assessment to $20, which would have cost West 91原创 $1 million a year in tax revenue. The province and B.C. Ferries worked out a compromise.
If such a compromise cannot be worked out with Nav Canada, the government needs to quickly close the loopholes in its legislation regarding assessments. An arrangement such as grants in lieu of taxes, paid to municipalities by senior governments on public properties, could be made.
Too often, municipalities must shoulder the load dumped by senior governments bent on cutting costs. It鈥檚 not fair and it should be fixed.
