Orders of the Day

Hon. M. Farnworth: In this chamber, I call committee stage, Bill 26.

Committee of the Whole House

BILL 26 — ENVIRONMENTAL MANAGEMENT
AMENDMENT ACT, 2022

The House in Committee of the Whole (Section B) on Bill 26; S. Chandra Herbert in the chair.

The committee met at 1:34 p.m.

Hon. G. Heyman: I’d just like to introduce staff who are here with me — Chris Doyle, acting chief conservation officer.

On clause 1.

R. Merrifield: I just wanted to start off, with my first question, by talking about the conservation officers.

[1:35 p.m.]

Obviously, the minister did a fantastic job yesterday of explaining, in detail, what their jobs are, what their jobs entail and how great they actually are, which we all agree on. My question is: when were the changes that were made back in 2019 first acknowledged by the minister or understood by the minister?

Hon. G. Heyman: I’d just like to ask the member for clarification. Obviously, I introduced the changes. I’m wondering if the member means…. When did we realize they needed further amendment, or…? Okay. Thank you.

The problem first became apparent…. I can’t be absolutely sure of the date, but it was likely in 2020, when the first conservation officer went for a detention order and realized that it was not for the full 12 months that it had been previously. Then staff had to go through the process of getting time with leg. counsel to draft the amendment and getting time on the legislative calendar to bring it forward. At the point at which the request for legislation was ready…. That’s when it was first raised to my attention.

R. Merrifield: If it was brought to the minister’s attention first in 2020….

Okay, the minister is making gestures. So I’ll rely on the minister to change what was being said there.

It was brought to awareness in 2020 when the first conservation officer actually went forward and was only given a three-month, rather than a 12-month, warrant. Then it went through the due process.

Could the minister please describe a little bit more of what that due process was and why this bill wasn’t brought forward sooner?

Hon. G. Heyman: In response to the member, the first request for legislation was prepared in 2020. Then it be­came a matter of the many pieces of legislation that were priorities for the government to bring forward in the subsequent legislative sessions.

While I spoke at some length about the administrative problems and some of the ways time could have been better spent and will be better spent, we didn’t lose any of our authorities, although a possibility, as I noted yesterday, did exist that a judge might at some point decline to give an extension. We didn’t expect that would be likely, and it, in fact, didn’t happen. Certainly, it’s an administrative problem we wanted to fix.

[1:40 p.m.]

In terms of the decisions that are made about the legislative priorities on the calendar, those are made on a range of issues, many of which are addressing issues for which there is no legislation or any authority. Those took precedence in the calendar.

R. Merrifield: Yesterday, in the minister’s comments in opening this bill, we heard detailed analysis of the time and the inefficiencies that were created through this omission. We also heard details of everything that a conservation officer actually has under their purview to do, including the sustainability of our environment, the education of our next generations and the education of our communities.

In this era of such a climate emergency and with such heightened awareness of how we need to steward our environment, I find it difficult to understand why we are waiting three years for this type of amendment. The good news is that all of the extensions were granted, but I will ask the minister: was there an opportunity to bring this forward faster?

Hon. G. Heyman: I appreciate the concern that the member has for the activities of the conservation offi­cers, and I totally agree, as I stated repeatedly yesterday, that they have important work to do. Anything, even an hour out of their day preparing material to seek an extension, is an hour they could have spent doing other more important things, which of course is why we brought the bill forward.

I would say many of the initiatives that were brought forward over the last two years — I’m sure the members of the opposition would agree — were extremely high-priority as well. There were many issues being dealt with by my ministry and the climate action secretariat on climate, specifically, to ensure that we had full development and modelling of plans to address the impacts of climate change.

In terms of my having an opportunity to bring this forward more quickly, it is not up to a minister in any government to set the timetable of government’s legislative calendar as a whole. That’s a decision that is determined collectively and that ultimately is managed by the House Leader.

R. Merrifield: Just to help my understanding…. Forgive me; I’ve only been here for two years, so I don’t have the full complexity, but the two years span two of the three years of this omission. I’m trying to recall or remember….

I’ve only been in this critic role for a short amount of time. Perhaps, could the minister please just refresh my memory? Which environmental bills have actually superseded or taken precedence over this amendment for the conservation officers?

Hon. G. Heyman: I’m going from memory, so if I if I miss a bill that came in since 2019, my apologies. I’ll ensure that I give the member the information.

[1:45 p.m.]

To the best of my recollection, following 2019, when we also did the Climate Change Accountability Act, the only bills that were brought forward were amendments to the Parks Act and Protected Areas Act — amendments that are regularly brought forward to the House. The member asked it in the context of which bills I considered more important than this. Again, I would say that I consider all bills from the ministry important.

If I were allowed to bring them all forward as soon as I thought I was ready to bring them forward, I would likely do so, as would any minister. But it doesn’t work that way.

First of all, we have to have legislative counsel draft bills. If legislative counsel are busy drafting other bills, which they often are — in fact, they always are — there is a lineup for their services. It is an overall determination of government as to what the priorities are.

Then, of course, as I’ve already said, it is ultimately the House Leader, acting on the broad priorities of all of government, as determined by cabinet and the Premier’s office, that sets the legislative calendar.

R. Merrifield: I know that I asked the minister an unfair question. It was like asking which of your children is your favourite. I mean, they’re all your favourites. Yes, of course.

I don’t mean that. I actually am concerned. I’m trying to draw attention and maybe sound the alarm bell a little bit in the middle of all of these climate emergencies, coupled with the floods and the fires and the landslides, on top of some of the infrastructure that failed during those times. I welcome the fact that we did do the Parks Act amendments. I got to ask the Minister some questions about one of those, because those parks were so important to British Columbians during that time, as are the conservation officers so needed as a form of protection of our environment during this time.

I was trying to quote here. The minister just said that it’s the “overall determination of government” on what the priorities are. One of the criticisms about where we’re at with CleanBC and the Roadmap to 2030 is that they don’t have legislative teeth. There isn’t enough momentum behind them. Could the Minister just describe how this bill takes precedence over others that could actually be used to move our environmental sustainability and protection forward?

Hon. G. Heyman: Thank you to the member for the question. First of all, the role of conservation officers on a range of things is very important. A small subset of what they do could be directly related to climate, but generally, it is protection of humans, it’s education, it is protection of wildlife, and it’s protection of the environment from environmental harms that could be performed in a variety of ways. I suppose a couple of those could be related to climate change, if they had to do with burning or fires.

I think the member’s question was kind of the reverse of the previous question: on why I, as minister, don’t consider that some further legislation on climate is more important than this bill, and premised on an assumption that a criticism of CleanBC is that it doesn’t have enough teeth. That’s a criticism that…. It’s fair for people to have opinions and critique actions, but I believe that we have a very thorough climate plan.

[1:50 p.m.]

We have a number of pieces of legislation that support that, such as the Zero-Emission Vehicles Act, the low-carbon fuel standards act. When we created the Roadmap to 2030, we outlined a number of places where we saw a huge potential to reduce emissions and that we would do some of that by incentives, some of that by regulation, some of that by policy and some by legislation.

A number of those pieces of legislation that are potential exist in other ministries, primarily the Ministry of Energy, Mines and Low Carbon Innovation. Work to create those pieces of legislation is actively ongoing and involves consultation with industry, consultation with the public, consultation with Indigenous people, which is critically important, in general, but also because it’s required by our own Declaration on the Rights of Indigenous Peoples Act.

Work on necessary pieces of legislation is ongoing. Of course, we have said — I have said many times, as the member herself has said — we’re in a climate crisis. We have a good plan, and we need to not let up in our implementation of that plan. We need to ensure that all of the measures that we’ve outlined and that we say can successfully help us meet our targets are implemented in a timely manner in order for us to do that, not simply wait to two minutes until 2030 and then bring in a bunch of changes and say: “We’ve met our promises.”

E. Ross: I’m happy to speak on behalf of Skeena, talking to Bill 26, the Environmental Management Amendment Act, 2022.

First, I’d like to start by saying congratulations to the minister for talking two hours yesterday on basically one section. That’s quite the skill. That’s the designated speaker’s job, for those millions watching at home. But it was quite impressive.

For the record, so everybody understands what we’re talking about, the one section we’re talking about is section 107.1 of the Environmental Management Act. I won’t go through the rest of those headings. But subsection (a): “in subsection (1) by striking out ‘anything seized by a conservation officer under section 107.02 or 107.03 (2)’ and substituting ‘anything seized by a conservation officer under section 107.02 or 107.03.’” And (b) is: “in subsection (3) by striking out ‘anything seized in a search under section’” blah, blah, blah…. Okay, done.

Then the second one is just basic commencement, saying that this act comes into force on the date of royal assent. That’s what we’re talking about here today.

I was quite interested for the last five years listening to the government talk about their commitments to UNDRIP. We heard the minister talk about it yesterday in his speech regarding Bill 26, and we just heard him mention it just now in an answer to my colleague from Kelowna.

So we’re talking about seizing — anything seized by a conservation officer. And just to keep it in general terms for a second, I was the chief councillor of Haisla from 2011 to 2017, and I was quite shocked when I found out that my public works people would not shoot a grizzly bear that had taken up residence in my community. They were actually living behind our convenience store right in the heart of our community.

It took two weeks before a conservation officer would respond. Two young grizzlies freshly kicked away from their momma bear, and the conservation officer wouldn’t do anything about it. It took a letter from me saying: “If you don’t do anything about it, I’ll do something about it myself, because my public works people are afraid to do anything about it.”

It has direct relation to what we’re talking about here, because my public works guy wouldn’t do it, even if there’s a designated shooter, because previously when they have done it, the conservation officer seized his rifles. He never got them back.

[1:55 p.m.]

Yet this goes back, historically, to a time when my community members, the leaders, would go to the local watershed that was about seven miles away, and they’d monitor the grizzly bear population. When they saw it was getting too much, they’d start killing grizzly bears. So in terms of making everything right with UNDRIP and this vague idea of Aboriginal rights and title in today’s context, that was lost, where we lost the ability to manage black bears, grizzly bears — not only in neighbouring watersheds, but also bears that have taken up residence in our community.

Just in the last two days alone, in my community of Kitimaat Village where I live right now, a grizzly bear has been living in a new subdivision. Two black bears are living in our community. People are scared, and our council is powerless. They have got to wait for the conservation officer, and who knows how long that will take.

When I’m hearing the minister talk about UNDRIP and the relationship with Aboriginals, and we’re talking about seizing — anything seized by a conservation officer — has there been any talk about what Aboriginal leaders can do on reserves, proactively, in terms of the management of a grizzly bear population or a black bear population? If that conversation hasn’t happened, have there been any conversations happening around community leaders having the ability to keep their own community safe, autonomously and away from the conservation laws that we’re talking about here today?

[2:00 p.m.]

Hon. G. Heyman: Thank you to the member for the question. First of all, without having more detail on the particular instances the member raised, I can’t comment much, except to say that if a community, Indigenous or otherwise, feels that there is a threat that is not addressed by the conservation officer service in a timely manner, it should certainly seek a meeting with the conservation officer service, the area supervisors and, ultimately, potentially with senior staff from the ministry or with me to see if we can work something out.

I have lots of conversations at UBCM and, potentially, conversations at gatherings of the First Nations Leadership Council with communities about how they can be better served. I’ll just put that out as a general comment.

We have different discussions and relationships with different nations around managing wildlife, around auth­orities in some cases. We, as I said yesterday, strive to have more Indigenous recruits in the conservation officer service and to train them. However, unless there is this very specific funding arrangement that is provided, a trained conservation officer from a nation would not necessarily be resident in that nation’s territory specifically.

However, there are arrangements with some nations around that, that have their own police services to apply for and get, I believe, special conservation officer status. That has happened and could happen. In other cases, there are certain authorities under the Wildlife Act to act to protect communities against a threat from an animal, and all of those could be explored. Probably this isn’t the best place to explore them in depth, but we could discuss that further if the member wanted.

Finally, it is a work in progress. We have discussions with a number of nations around how we can collaboratively manage parks and protected areas, how we can collaborate on their guardian programs and align the work of the guardians with the work of conservation officers so that they’re working together. Those discussions may evolve to different forms of recognition of Indigenous Guardians or Indigenous officials with certain authorities that currently rest with the conservation officer service.

I’ll simply finally say that if there is an immediate threat — and I know the member talked about bears that are resident in the community — that would then be a matter of “is that an immediate threat?” as in somebody was charged and being attacked, for which they were defending themselves. Or is it a potential that the community wants to address and alleviate?

In any case, it would be our goal — the conservation officer service’s and mine — that there be a quick response to calls and issues that are raised. I’m happy to discuss that further, directly.

[2:05 p.m.]

E. Ross: Well, that contradicts the conversation I’ve heard for the last five years in this House. That actually contradicts what I just heard yesterday in your speech and your answer you gave, previous to my answer, to my colleague from Kelowna, because all I’ve been listening to was this new relationship under UNDRIP and all those rights and principles under UNDRIP.

Really, what I’m hearing now, in terms of a leader like myself having the right to protect my community being taken away…. Lord knows when…. I don’t know when that right got taken away. Whereas, if I went out and I shot a grizzly bear on my reserve, my rifles get taken away. Maybe I get charged, and to add to that, that’s on reserve, where the province is not welcome, in most cases. The province has no jurisdiction on reserve.

I don’t really know how this law came about where the conservation officer…. I understand maybe a law of general application, but UNDRIP doesn’t mention that. Basically, what we’re talking about now is that a historical right to protect the community has been taken away.

We can talk about re-establishing that right, but only if that authority is granted by the Crown, in cooperation with the Crown. Somehow the government has got to be a part of it, to grant that authority to a First Nation leader to look after the safety of the community — even though that community, historically, understood how to protect their own communities, and that was through wildlife management, brutal as it may seem.

We’ve been living with wildlife forever. It’s not new to us. What’s new to us are the laws that restrict us from protecting our community members.

So to keep the question simple, then, without getting into this long years and years of negotiating some type of authority granted by the Crown: if a First Nations leader shoots a grizzly bear on reserve to protect their community, will that community leader have their rifle confiscated by the Crown?

Hon. G. Heyman: The Wildlife Act gives people the right to kill an animal to protect their own life or to protect domestic animals. So if that could be demonstrated that that was what happened, then that would be within the provisions of the Wildlife Act.

The Chair: Shall clause 1 pass?

Interjection.

The Chair: Sorry. Clause 1 is the question, and then we would be on clause 2, and that’s the act.

So no questions on clause 1?

Okay, so that’s moved on, then.

Clause 1 approved.

On clause 2.

[2:10 p.m.]

R. Merrifield: I apologize for my confusion.

Annually, how many search warrants are issued under section 107.02 of the Environmental Management Act?

The Chair: Just to be clear, clause 2 is just the commencement. Clause 1, I think, is what the member is hoping to ask questions about still, which is why I asked if there were any questions on clause 1. But if the member does still have questions on clause 1, I don’t want to limit that. If there’s unanimous consent of the House, we can reopen clause 1 so we can go back to questions on that. Is that what the member is hoping for?

R. Merrifield: Yes.

The Chair: It is. Okay. To be clear on the terminology we use here, clause 1 is the one that says “No. 1.” Some peo­ple refer to it as section 1, but clause 1, section 107.1, is what we’re discussing here, and we call it a clause because it hasn’t passed into law. If it was a law, then it would be a section.

I’m seeking unanimous consent to reopen clause 1, as there are some questions still.

Leave granted.

On clause 1 (continued).

The Chair: Okay, so we’re back to clause 1, and I return to the member for Kelowna-Mission.

R. Merrifield: Thank you, Chair. Would you like me to re-ask the question?

The Chair: That would be ideal.

R. Merrifield: Perfect.

Annually how many search warrants are issued under section 107.02 of the Environmental Management Act?

Hon. G. Heyman: It is hard to put an exact number on it for a couple of reasons. It varies from year to year. I would say a couple of dozen might be a reasonable average. One investigation may, in fact, involve several warrants. But to get a precise answer, I’d have to go and do some research in records, which we could wait to have happen now, or I could simply provide the information later — whichever the member would prefer.

R. Merrifield: If the Minister could provide it at a later date, that’s fine. I don’t need any searches right now.

My next question is: annually, how many warrantless searches in exigent circumstances are conducted under section 107.03(2) of the act and under section 107.03(3) of the act?

Hon. G. Heyman: In terms of searches of homes, the acting chief conservation officer is not aware of any warrantless searches in that circumstance. But there are frequent searches in the course of the daily work of conservation officers. That might be a search of a car. It might be a search of property. It might be a search of a camp.

[2:15 p.m.]

Those would be recorded in reports, but they wouldn’t have been aggregated at this point. Again, we could do that. It would take some work to do that, but there would be a considerable number, because that would often be…. If there was any report that there was a suspicion of wrongdoing or poaching or whatever, attending to that would involve some form of search and investigation.

R. Merrifield: Could the minister describe, just in generalities, what that number would look like? Just an order of magnitude perhaps, if that’s possible?

Hon. G. Heyman: First of all, searches happen under not just the Environmental Management Act but under a number of pieces of legislation, including federal legislation. I think all we can say at this point is that it’s a regular occurrence. But to try to ballpark a number, I think, would be a disservice, because without actually digging through huge piles of reports from all the conservation officers in the province, we’d be just throwing a number in the air.

R. Merrifield: I guess what I’m attempting to ascertain is just when the minister says it’s a regular occurrence. It’s frequent? It’s many? We’ve got 24-ish on the 107.02. Is it 30? Is that a regular occurrence? Or is it 300? Is it 3,000? Is it 30,000? I’m just looking for an order of magnitude on that.

Hon. G. Heyman: It’s very difficult to answer the member’s question, because an officer may be investigating, and in the course of that, they find something. Is that a search? Is that something going to be seized? Let’s just say that there are about 160 conservation officers on the job, and most days, they are out doing their job.

Some of doing their job may be a human-wildlife conflict, which doesn’t involve an investigation. It involves addressing the conflict. Much of their work is called out to investigate, and they would be conducting the investigation. It’s just hard to…. The member is really asking me to guess, and I just don’t want to do that.

R. Merrifield: I’m going to ask this next question, and if the answer is the same, then the answer is the same. I’ll just ask the minister to perhaps dig down and get some of this information for me. For those warrantless searches that occur, not knowing the number of them, under 107.03(2), where delayed to “obtain the warrant would result in a danger to human life or safety,” how often does a search result in the seizure of something?

[2:20 p.m.]

Hon. G. Heyman: Again, we could determine that number, but it would take a considerable amount of work and staff time. It would involve going through all of the reports of all of the searches to see which ones resulted in seizures.

R. Merrifield: I don’t want to be assumptive in any way. So I’m going to ask the minister…. For the warrantless searches that occur under section 107.03(3), where a delay to “obtain the warrant would result in the loss or destruction of evidence….” How often does such a search result in the seizure of something?

[2:25 p.m.]

Hon. G. Heyman: I’m not sure the member asked this. With respect to section 107.11, the question being where there’s a danger to human life or safety…. How often is there a warrantless search? Almost never is the answer to that. Where it does occur is where a delay necessary to obtain a warrant would result in a loss or destruction of evidence. That happens much more often.

I don’t have the figure today. If the member wants to know the answer, it will take some work to get it. If the member wishes us to do that, she can let us know, and we will ask the sergeants in each zone to review their exhibit reports and give us the number. I’ll leave it to the member to determine if she wishes us to ask the conservation officers to spend time doing that review work to answer the question.

R. Merrifield: What percentage of cases would the conservation officers have to go back to court for extensions on?

Hon. G. Heyman: If the consideration is that material is being prepared for a recommendation to Crown counsel for charges, almost every case, if not every case, would require an extension. Three months would simply not be enough time. If there is a different outcome, and on review of the information and the material a decision is to deal with it in some other way — for instance, writing a ticket or issuing a fine…. Many of those could be completed within the three-month period of the initial seizure.

R. Merrifield: When the minister refers to “many”…. A ballpark percentage of how many of those would be resolved within that three-month time frame.

[J. Tegart in the chair.]

Hon. G. Heyman: Again, we’re ballparking. The majority of cases, let’s say somewhere around 60 percent but not a precise 60 percent, would be capable of being resolved within the three-month period. They are not going to proceed with building a case for charges for Crown counsel. They’ll be dealt with by administrative fines or tickets.

The Chair: Member.

[2:30 p.m.]

R. Merrifield: Thank you, Madam Chair. Nice to see you.

During second reading comments, the Minister stated that the conservation officers frequently end up having to go back to court, sometimes as many as three times, before the 12-month mark in order to get extensions. The Minister has indicated…. I won’t hold the minister’s feet to this number, but we’re talking a majority, 60-ish percent, of those would need to be amended and extended.

Since the 2019 amendments were made, which resulted in this inadvertent omission that we’re amending under this current bill, how many times has a conservation officer had to go back and actually get this extension?

Hon. G. Heyman: I think the context in which I was addressing the issue during second reading was the context of preparing charges, which is, of course, the instance where I’ve indicated that three months is usually not adequate. To give a number, we would have to go through all of the case files of charges and recommendations that were being prepared for Crown counsel and see how many of those required an extension request. That would be, basically, a laborious review.

R. Merrifield: To the Minister: how often is there, then, an application made to detain seized items beyond one year?

Hon. G. Heyman: Again, we don’t have the number in front of us, and we would have to review files to determine the number. But I think it’s fair to say that it is less frequent that an extension that exceeds 12 months would be required.

R. Merrifield: So we don’t know how many searches result in seizure under 107.03(2) or 107.03(3) or even have a ballpark, really. We don’t know what percentage of cases…. We have 60-ish percent that actually go for extensions. We don’t know how many of them since 2019 have actually gone for extensions, and we don’t know how many of the items have been extended past a year.

My question is this. How does the minister understand this to be an issue? Maybe I’ll reframe it in just a little bit of a different way. How did the minister’s staff present him the urgency or priority for this environmental bill?

[2:35 p.m.]

Hon. G. Heyman: I think, in answer to the member’s question, the context here is that we’re correcting and restoring to 12 months the period that previously existed before a drafting error in 2019 included the mention of a subsection of 107.03(2) instead of all of 107.03.

What we’re talking about is the number of cases where material for prosecution is being prepared so Crown counsel can consider whether to lay charges. In most of those cases, three months would not be an adequate time frame to hold evidence, and, therefore, work has to be done to prepare an extension request and notify the person whose items were seized so that they can appear and make a counter-argument if they want.

But those cases are precisely the most serious cases — the ones where material for prosecution is being gathered and prepared. The ones that aren’t as serious are the ones that can be dealt with without preparing material for prosecution. So, in that sense, ensuring that we correct the administrative drafting error and restore the 12-month period is important because it deals with important, serious cases.

R. Merrifield: The importance, then, is not on how many times this occurs. The importance that the minister sees is on the severity of the cases in which this 12-month extension is necessary.

Did I understand that correctly?

Hon. G. Heyman: I think I would say the importance is partly related to the fact that where extensions are required — because three months is not an adequate amount of time and 12 months likely will be, although not in every case — those are the more serious cases, the ones that involve serious infractions or where preparing material for potential prosecution for Crown counsel would not be occurring. The conservation officer would simply issue a fine or a ticket or some other form of corrective action.

That’s why there’s a connection between the length of time evidence needs to be held and what we’re actually trying to address — in other words, the seriousness of the alleged infraction. And for any one of these cases, being able to hold the evidence for 12 months without having to return to seek an extension is important, no matter how many there are.

R. Merrifield: So if only the very few cases require an extension past those three months, if only the most severe of cases require that length of time to go past, does the minister have any data on how many that actually is?

[2:40 p.m.]

Hon. G. Heyman: First of all, I want to correct…. I am not saying that the most severe cases are the only ones that require an extension. For instance, it wouldn’t be the most severe 2 percent. It would be any case that is required to prepare a case for prosecution for Crown counsel. Those are the more serious cases, but there’s a spectrum of them. There’s a range of them.

To the member’s question, I don’t have that number, as I’ve said a number of times today. We can get that number. It will involve a significant amount of work by staff that will take them away from other duties. Perhaps the member can have a discussion with me or people in my office about whether a representative sample from one or two zones, which would involve far less work, would be adequate for the member’s purposes, rather than canvassing every single zone in the province, which would require extensive work.

R. Merrifield: We have used a half of the day yesterday, a quarter of a day today to argue or debate a bill that we have almost no data on in terms of what the efficiency that we’re actually trying to improve is. Is it 24 hours a year over 160 conservation officers? Is it ten hours a year over 160 conservation officers?

But we’ve spent a lot of time — in fact, the minister spent two hours of time yesterday — talking about how urgently this amendment was required. I really don’t want to send conservation officers that are overworked, underpaid and have massive areas in which to oversee…. I don’t want to send them on a wild goose chase for more numbers.

I want to give them more power. I do. I think them having the equipment and the legislation that they require is absolutely necessary. I’m just concerned that we’re spending, in our six weeks of this fall session, basically, essentially, almost a day on a small amendment that may or may not affect a handful of conservation officers every single year.

My next question is this. Clause 1(b) possibly will rectify this. But currently if an item is seized through section 107.03(3) and is considered a pollutant or an environmental hazard or is contaminated by a pollutant, what happens to it?

[2:45 p.m.]

Hon. G. Heyman: First of all, I just want to respond to the member’s preamble, which is simply to say that what we do in this House is debate legislation. Some pieces are long and complex, and others are relatively short, but they nonetheless contain important provisions — in this case, giving a necessary tool to conservation officers that they previously had.

Notwithstanding the member’s comments, I think it is time well spent in this House, as we did yesterday, to talk publicly about the important work conservation officers do, as well as to remind the public of the role they have in reporting pollution or poaching.

To the member’s question, I’d like to ask some clarification. If the member is referring specifically to hazardous material, substances or pollutants, is the member asking how we dispose of that?

R. Merrifield: Yes.

Hon. G. Heyman: It would, of course, depend on, to some extent, the nature of the material. But generally, we would contract with a company licensed to handle and dispose of hazardous waste to dispose of it appropriately and safely.

R. Merrifield: Under what time frame would that disposal or destruction take place?

Hon. G. Heyman: For the period of time the substance or material was required as evidence, it would be kept in a secure, safe container until such time as it was ready for disposal. If only a small sample of the material was needed, that sample would be retained in that manner, and the remainder would be disposed.

If theoretically…. I have been trying to think what this might be. Perhaps it might be radioactive material, although if it was something that posed an immediate hazard and couldn’t be stored safely, we would seek to dispose of it immediately in a safe manner.

R. Merrifield: Thank you to the minister for all of the answers today.

In querying through these, obviously the most important thing that we can do is look for data to inform our legislative choices and our legislative decisions. I agree with the minister that we are here for that exact purpose — to debate and to bring forward issues.

I would just say that in debating through this — really, what is an administrative change, back to where we were in 2019 — my concern is, and I’ll quote the minister, that this time frame has been what has been the overall determination of the government as to what the priorities are.

So with that I’ll conclude things.

Clauses 1 and 2 approved.

Title approved.

Hon. G. Heyman: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 2:50 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

BILL 26 — ENVIRONMENTAL MANAGEMENT
AMENDMENT ACT, 2022

Bill 26, Environmental Management Amendment Act, 2022, reported complete without amendment, read a third time and passed.

Hon. G. Heyman: Mr. Speaker, I call continued second reading of Bill 28, the municipal affairs statutes act.

[J. Tegart in the chair.]

Second Reading of Bills

BILL 28 — MUNICIPAL AFFAIRS
STATUTES (PROPERTY TAXATION)
AMENDMENT ACT, 2022

(continued)

B. Bailey: I’m pleased to rise and take the opportunity to speak to Bill 28, the Municipal Affairs Statutes (Property Taxation) Amendment Act, as the representative of Vancouver–False Creek.

The people and the businesses in my riding are among the most affected by this important property tax amendment. In Vancouver, small businesses are simply the heart of our community. According to data from the city of Vancouver, there are nearly 80,000 small businesses in Vancouver. The city defines small businesses as those ranging from a sole operator to those of 50 persons.

Ninety-eight percent of all businesses in Vancouver are small businesses. Interestingly, though, on the flip side, the majority of jobs in the city are with large businesses. Although there are fewer large companies, they employ a much larger segment of the population, but that is not to say that small businesses aren’t important. In fact, that couldn’t be further from the truth.

Even if you do work in a large company, for example, where do you shop? Where do you eat? Where do you work out, get your suits dry cleaned? Who fixes your broken plumbing, provides child care? These are all likely small business folks, and our society desperately needs them.

Small businesses are, and have been, under a lot of stress. Of course, the pandemic is one reason, without a doubt. The help that our province and the federal government provided often made the difference of keeping the lights on or not. Now these same businesses are experiencing cost escalation from many, many sources.

[2:55 p.m.]

Now, I just want to be very clear. I believe in the health services tax, and I agree that freeing individuals from paying MSP is a positive move for our general populace. It does have an impact on small businesses. So, too, does the requirement to provide five sick days. Again, I very much support this legislation. Workers deserve to be protected and not compelled to go to work sick. It’s better for workers, and it’s better for customers for sick folks to stay home. That cost is borne by business.

Inflation, supply chain challenges and worker shortages are adding cost pressure for these companies. So we must support additional measures to ensure the success of small businesses in our communities. What kind of a community would we have if small businesses were unable to succeed?

One of the first issues I was made aware of when I became the MLA for Vancouver–False Creek was the challenge for businesses on West 4th and elsewhere who are experiencing vast increases in property tax, passed on to them through the triple-net model of commercial property leases.

For those who are unfamiliar, I’ll just simplistically explain what I understand to be triple net. These leases have, as implied, three components: the base rent, maintenance and property taxes. These are shared out to lessees by the percentage of the commercial space that they’re using. So if you’re leasing 50 percent of a commercial building, you cover your rent, which is a calculation based on your square footage; your maintenance, a percentage of shared space; and then 50 percent of the property tax. If you’re the only tenant, then, obviously, 100 percent is on you. The vast majority of commercial leases are, of course, structured in this way.

B.C. Assessment considers the highest and best use of a property when determining the assessed value. This is a standard of commercial appraisal that’s used throughout North America.

A small business may have a multi-year lease in a commercial building whose highest and best use is to be used to build a multi-storey building. Those additional floors, not yet built, are part of the tax calculation. Because leases are triple net, the increase in taxation for those not-yet-built floors is passed on to the lessee. Sometimes, often, these are small businesses. If those additional and not-yet-built storeys are designated commercial, the taxation rate is about three or four times higher than the residential rate — again, passed on to the lessee.

We do want landlords to build housing. It’s an important and worthy social objective. It’s a massive social challenge that we’re facing.

Increasing housing is a reasonable social goal, of course. However, our property market in Vancouver has been anything but reasonable. Rapidly increasing valuations have led to dramatically higher property taxes, again, most often flowing through to the lessee. This is also happening because of rezoning, community plan changes and ram­pant speculation. As a result, commercial tenants can be responsible for higher taxes associated with an assessment value that reflects the future use of the property, like a new residential highrise, for example.

This issue is most significant in Metro Vancouver, where speculation and increasing density to accommodate our growing population have led to really significant property value increases in recent years.

This bill, Bill 28, the Municipal Affairs Statutes Amendment Act, will allow municipal governments a tool to work with, with their communities to address this excessive tax burden on small businesses. The proposed legislation will provide this new tool to municipalities to help commercial tenants and owner-occupiers in their communities by reducing the municipal tax rate on all or a portion of the assessed value of the land.

Municipalities can implement this tax relief voluntarily where they feel commercial properties are paying unfairly high property taxes because of development potential. B.C. small and medium-sized businesses are an integral part of our economy, and this is just one of the ways that we’re helping them recover and grow.

[3:00 p.m.]

As mentioned, Metro Vancouver is home to about 50 percent of the identified properties. The question might be: why wouldn’t we introduce a provincewide program? But in reality, this is an issue that’s only occurring in specific municipalities, and a provincewide solution could cause unintended effects. So having this as an opt-in tool makes sense.

The new tax relief tool is permissive. It’s not automatically applied. Municipalities and taxing First Nations can decide whether or not to implement it. For properties that meet the provincial eligibility criteria, the municipalities can choose which properties receive the relief and set the percentage of land that will be taxed at the lower rate. The tax relief tool will be available to eligible properties for as long as five years. In reality, municipalities know best whether this relief is necessary and what types of properties they need to target, as well as the extent of the relief required.

For these reasons, I’m grateful for Bill 28. I want to thank both MUNI and Finance and for all of the small business associations that participated and consulted. I know that this is going to be very helpful for my community.

D. Ashton: It gives me a good deal of pleasure to be able to speak to Bill 28. I would like to thank the ministry staff for, I know, the hard work that they had done on this and also for the minister bringing it forward. Now it’s my understanding that it has been swung over to the Minister of Finance, although it is an issue that has been dealt with by businesses in the municipalities.

One of the big things that I heard that throws a red flag up for me — and I heard this from the Minister of Finance this morning — was “may,” “could” and “might” help. Well, those three words are flags for me. I think that after two very serious years of COVID infection and what that has done to businesses and to people’s jobs, the last thing in the world that businesses need is a continual high taxation on air.

I really, really hope that the minister and ministry will realize that businesses are challenged these days. All businesses are challenged these days, and more so, I would say, where municipalities have now begun to tax airspace for a possibility of future development. It doesn’t affect the whole province. I would even question whether it would affect somewhere in my community. But there are communities in the valley where I live that I’m quite sure, if not at this point in time, will be subject to some other taxation like this.

I would hope…. I’ve heard this on numerous, numerous occasions in this House, about every one of us: we should all work together. Well, I issue that challenge back to the ministry, to the minister and to the good staff at the ministry: that we all, collectively, need to sit down with municipalities and that we need to sit down with businesses. We’ve heard some things back from UBCM, but again, the vast majority of members of UBCM are not individuals from the Vancouver area or the major communities in British Columbia.

I really think that some collective decisions have to be made about taxation for businesses these days. You know, the Internet has caused great consternation amongst businesses. When I take a look at the businesses, I’ll speak specifically to Penticton, where I had the great fortune not only to be a councillor but to be a mayor, and also the opportunity to chair the regional district. I look at what business brings to communities and the hearts of downtown — which are usually occupied; they have the greatest density of businesses in the downtown cores — and, you know, how they continue to contribute.

[3:05 p.m.]

I look at Penticton — being fortunate to come from a family that was involved in many communities in British Columbia with a retail business — and about the supports that those businesses generate into the communities and contribute to that community and to that community spirit. Those businesses today, too, are also facing, unfortunately, some of the social aspects that many of these communities are facing today. That’s another cause, and this is just layer upon layer upon layer.

I don’t need to look around here today, or look at yourself, Madam Chair, to think about how many boards we have boarding up some of those businesses that we knew, that prospered so well in many of our communities. Without straying away to business principles in general, additional taxation for possible future development is just one more straw that will eventually break the camel’s back.

I really, really hope that the minister and the ministry staff will take a look at this and will use the authorities that they have, because this is being left up to municipalities. This is going to be left up to individuals that right now are possibly proposing themselves to their communities for a position on council or as a mayor. It’s other individuals that are running again and trying to stand on what they’ve done for their communities and done for the citizens that they’ve been fortunate to represent. To be frank, they don’t have the time right now.

I had the opportunity to talk to a staff member, and it’s “Dan, we have an election.” What’s the date today? The fourth? So, 11 days. I mean, pre-voting opens up, if I remember correctly, on Saturday. I think it does. There’s an election taking place, and this bill could be done by that time. I hope that everybody, collectively, will understand what’s taking place right now with the election. I don’t think, personally, it’s fair. You’re going to be looking at a whole bunch of new council members and, quite possibly, a bunch of new mayors in the communities.

Further to that, I think you’re going to be looking at staff in the municipalities that are facing their own challenges with the increased cost of labour, the increased costs of policing, the increased costs in the communities, and they’re going to be whispering in the ear of those councils and to that mayor, saying: “Good idea, Your Worship. Good idea, council. We can’t really afford it this year.” Whack; again it happens, where these people are going to be left out in the cold.

I think that cooler heads need to think out and be collectively working together on this. This was a great idea. I’m still in favour of it. Please don’t get me wrong; I am. I’m just hoping that as it rolls out, the timing on this and the ability for the province — I have to choose my words carefully here — to help facilitate municipalities for, possibly, the revenue that they may be losing for this air taxation, that is prevalent right now, from B.C. Assessment.

After all these years, if I remember correctly, it has been the last three years, and it has come forward five times, that a peer of mine from Kamloops South has proposed this. It seems, at the 11th hour and 59th minute, all of a sudden, the government is saying: “Well, here we have a solution. You have to act on this if you want it to be coming into the 2023 tax year.” I’m a little bit hesitant that municipalities and the good councils that are there are going to have that opportunity to do it and get it done in time.

I had mentioned the member for Kamloops South. He worked tirelessly on this, and he had seen and has heard — as many of us here, collectively, and on the government side, have been hearing — from the citizens that we represent about what air tax is doing to some of the businesses.

We all know that there’s pressure in the downtown core. Again, as a councillor, lucky to be a mayor, you look at where you are going to densify. You look at the best places to do that: in the city cores. It always turns into the city core. We’re to take a look at the opportunities of densification, but along with that densification comes the business cycles.

[3:10 p.m.]

To be frank, I think we’re very close to — if we’re not in right now — the end of a very long business cycle. Usually, I think, if I remember correctly, they’re seven years, give or take, and I think we’re pushing 12 at this point in time. There’s a lot of discussion in the media, and there’s a lot of discussion by the pundits out there, that has said this isn’t going to be pretty. This is going to rival 2008, if not exceed it, and there are going to be businesses, again, that are affected by an air tax and are going to struggle.

We can’t forget that, lots of times, those businesses, those buildings, aren’t occupied by the owner. They’re occupied by people like what our family was, retailers, or somebody else that is a lessee. Those lessees…. Those costs, those triple-net leases, just flow right on down to the tenants, and those tenants are the ones that are going to be continually challenged, especially with the predicted downturn that is about to take place.

I would really ask that the government — specifically the minister and the ministry staff — take a look and just say…. You know, this is a good bill. This is an opportunity that is being presented. But there’s no real teeth in it for a municipality to take it and run with it. The former Attorney General, the MLA that is now seeking the leadership of the government party, has come out — I think a week ago, if I remember correctly — with a carrot and a stick for municipalities for the development of housing, saying: “If you do this, we will look at this. But if you don’t do this, we will also look at that.”

I would hesitate to say that maybe he should be looking at this bill also and saying: “As a government, we are providing municipalities an opportunity to address the B.C. Assessment air tax on it, on the particular locations. However, if you don’t address it and help those businesses out there that are directly affected by this air tax, maybe there are other things that we could look at that might be the carrot for you.” I guess that’s a good way — not a stick, a good carrot. How’s that?

Again, I would ask…. I’m glad to hear that government has been listening to the opposition and the long list of businesses that have not only approached each and every one of us here on the opposition side but — I’m very, very sure — those that have been approached on the government side just to listen to the causes and the concerns.

Again, being involved in municipal politics before, that business multiplier is something that I really had an issue with. During my tenure, there was always a push to increase it, if it was like…. Instead of 1 to 1 with housing taxes, it was like 1.5, and there was a push to get it to 1.75 and a push to get it to two times what a normal single-family residence or a home would be taxed at. It doesn’t sound like much if it rolls off the top of your lips really quickly, but businesses are….

Again, those challenges that they face and that additional taxation that they already pay, and then to say, well, with the possibility of a development taking place here, the possibility…. It’s happened here, and it’s happened here. You’re the meat in the sandwich between the two office towers, and there’s nothing to say that somebody might come along and buy that property and develop a tower and airspace, and now we’re going to start taxing you on it.

I can tell you that municipalities are looking in every pocket that they can because of the ongoing expenses that unfortunately are downloaded. They come federally, and they come provincially, and municipalities and citizens are being asked to pick up more and more and more. At some point in time, as I mentioned a little bit earlier, the straw is going to break the camel’s back.

I would just really hope that in the conversations that are going to take place, especially with my peer from south Kamloops coming up, a gentleman that had pushed not once, not twice, not three times, not four times but five times over three years to have the government look at this….

[3:15 p.m.]

Now the government, to its credit, has come forward with something, but I think it needs a little bit more tweaking than what has been presented at this point in time. I quickly look at the percentile, the 95 percentile between the assessed value on the building and the assessed value on the land. That might be an issue. That might be an issue that I think there needs to be a little bit of softening on to make it a little bit fairer for all of those concerned.

Again, at this point in time, it’s being said as a temporary fix, a temporary measure. Well, I mentioned that the business cycles are seven. We’ve been fortunate to have almost a 12-year increase in the opportunities in this incredible country and, more specifically, in this wonderful province that we all live in. But a rule over five years may not be enough. If a person gets on it, then at some point in time in the future, they are going to be faced with this being taken away and the opportunity for some form of tax relief that has taken place to be taken back.

You know, it’s only on the municipal part of it, and that today is — I guess you’re not supposed to use props but my fingers are that — only yay much of the taxation when you take a look at business improvement area taxes. You take a look at school taxes on it. You take a look at regional district taxes on it. You take a look at hospital taxes on it. You take a look at special levy taxes on it.

Oh my goodness, it’s only a small portion of it. Yes, every penny is going to count, but in the entire picture of taxation that is taking place on businesses and homeowners — but we’re speaking specifically today to businesses and businesses that are affected by the airspace taxation — it’s really only a small part of the pie.

Again, in my opinion, I would just ask the government if they would take a look at this and try and work with this and work with municipalities. UBCM is a good conduit for it, but UBCM is a broad net. This is going to require a lot more laser focus on the issues that are being faced by certain businesses that are affected by this air tax.

It’s easy to get a vote on the floor. I could ask my peer, but I don’t think this passed by very much when it was taken to UBCM. If I remember correctly, it was very close. I’m not so sure that some of my good peers understood it as well. There was a comment from…. I look at my good friend from the Cariboo. Well, I don’t think people in the Cariboo need to worry about airspace right now. They worry about their air quality and everything else from the damn forest fires that we’ve all been having.

I really think that we have to concentrate a little bit more on the particular areas that are going to be affected. Again, I would just ask that the government take a look at it.

It was raised by a peer of mine also that the lands around UBC are not dictated to by the city/municipality of Vancouver. That’s an electoral area, and it’s not there, but it’s my understanding there’s airspace taxation that takes place there. The government didn’t look at that side of the legislation that I’m aware of for the opportunities of including certain regional districts and, if I remember correctly, treaty lands and development — which West Kelowna would fit in, if remember right, and North Vancouver and West Vancouver, Jericho lands.

There’s a pretty…. There’s quite a bit of area and quite a bit of development area has been left out of this because it hasn’t gone through all the channels of government.

I would just say that when businesses, small and big, that are surrounded by increasing values in house prices and condominium and townhouse development prices on it, there is a real, real push for more and more taxation.

[3:20 p.m.]

Taxation on air — I think we’ll all have our opinion on that. But I’m not so sure that municipalities really shouldn’t take a look at their own internal expenditures before they’re always trying to go out and barter more revenue through taxation.

Again, I would like to say to the government…. It is encouraging that this government has looked at this. It is encouraging that they are, hopefully, listening not only to people like myself but to my peers — maybe even to their own colleagues — and also to the businesses that are going to be affected by this. I look in my area, and I’m speaking very frankly…. This is that the core of communities favour — I would think in most areas in British Columbia in the election process — the current government.

I would really hope that they are going to listen to what is transpiring in their area where people show the maximum support for the government. I really think it’s something that they should listen to. I really think it’s something that has to be addressed and has to be addressed quicker than later. It also has to be addressed over the length of time that the government has shown that it could be in effect and also, that the government will work in partnership with those municipalities instead of just saying to them: “Thou shalt have the opportunity of this.”

From what I sense, and from what I’ve seen from my area, municipalities are scrambling on a continual basis to derive revenue from taxation. I think that there needs to be a helping hand of government — the senior level of government, like the province — to help facilitate this.

Don’t forget, ladies and gentlemen, and also Madam Speaker, that the core of our communities is our downtown areas. Those areas are incredibly important. That’s what makes a community today. It’s not just the surrounding area. It’s the core. Vancouver, Burnaby, Abbotsford, Kelowna, Prince George, other places — they have these other challenges at this point in time. But as a kid growing up, when you had the ability to come in and see the big city, as opposed to where I grew up, in the rural area….

It’s pretty important for all of us to maintain a healthy and vibrant downtown core and downtown area for all concerned, not just the people that live there and people in surrounding areas, but also the businesses there that support minor hockey, minor soccer, the SS Sicamous, everything that’s donations. I can just remember people coming in on a continual basis, asking…. You always do your best because, as a business person, you believe in the community that you’re deriving your income from, and you want to see it flourish also.

Madam Speaker, thank you for the opportunity. I just hope we can get through this with some resolve that makes it fair and equitable for all concerned, not only the provincial government, but also the municipalities and mostly the individuals that are going to be affected by this directly, those that are paying tax on nothing but air.

A. Singh: Thank you to my friend opposite. Prior to sitting here, I was a small business owner for over two decades, actually, and really understand the pressures that small businesses come under. At our very small law firm, every little expense was calculated. So when there’s a change in that triple net, when there’s a change that’s beyond your control, it really makes a difference.

[3:25 p.m.]

Not only small businesses, but also non-profits have been stuck with this situation where there’s no certainty to their triple nets, where, because of development issues, property taxes have been raised. We know, especially through COVID, that businesses have been struggling — not only because of COVID, because of the aspects of that, but also because of high property taxes. The effect of the pandemic on properties — I didn’t expect that. I don’t think that was an effect that was really foretold. Labour shortages, inflation — all of these things really affect small businesses.

We’ve worked with municipalities and the UBCM and local governments. Local governments have been asking for a long time for a tool to help support small businesses and non-profits, and Bill 28 is really a response to that. We’re reducing a long-standing tax burden on B.C. businesses and non-profits through this new municipal tax rate flexibility for eligible commercial properties.

Why have we left it up to local communities? It’s because they know best. They are the experts in this. They know best, and that’s done by design. This is what local leaders wanted, and this is in response to that. This new flexibility tool, which will be coming in 2023, will give municipalities a tool to help reduce disproportionately high property taxes for businesses that occupied properties that have development potential.

Again, it’s sort of a catch-22 situation. It’s great in some ways that we have a province where people want to come into, where people want to invest. But until you reap the benefits of that, when you have high property taxes that are imposed on your business, it’s an untenable situation. So we recognize that, and Bill 28 really tries to address that.

B.C.’s small and medium-sized businesses are such an important part of our society here. They’re an integral part of our economy. This is really one of the ways that we’re trying to help them recover from the effects of the last few years and to grow, and also recognizing that the next two or three years may be quite difficult and challenging for small businesses and people alike.

We want to thank all of the business organizations, all the non-profits that came and informed the government and informed us on how this legislation should read. I think what we have is a measured approach that should be very effective. Again, it leaves it up to the local experts, local municipalities to really govern their property tax regime.

So why were commercial properties experiencing sudden property valuation and tax increases? The problem really lies…. B.C. Assessment considers the highest and best use of property when determining the assessed value, which is in accordance with general accounting principles. It’s a standard commercial appraisal method used throughout North America and used throughout most of the world.

Because of rezoning, community plan changes or speculation — and again, because of this amazing province that we live in and the fact that people want to invest in this province — some commercial tenants were responsible for higher taxes associated with an assessment value that wasn’t cognizant of the actual value, at that time, of their property.

Again, as has been alluded to before, by my colleague here and my friend opposite, those costs are passed down from the landlord to the tenant. Most small businesses and non-profits are tenants. They have a lease. They have that triple net in the lease. So when a property tax goes up, or common expenses go up, those are passed on down to the small businesses.

This issue wisely was left, really, to local municipalities. Why it was localized was because it’s the most significant, really, in the Metro Vancouver area, where speculation and increasing density to accommodate a growing population have led to significant property value increases in recent years — again, completely unprecedented and unexpected. No one would have thought that during the pandemic, property values would rise in the manner that they did — no one.

We live in a completely different world than pre-pandemic. There are the before times and the after times. Who would have thought that we would have been….

[3:30 p.m.]

Even as I stand here speaking, we’re still in a hybrid session, which will hopefully continue, because this is a different way of doing things. People had the ability to stay home. There was more interest in homes, and that’s partially responsible for those rising values. Again, completely unexpected.

One of the effects of this increased interest in real estate was that property values rose in areas unexpectedly, and they weren’t cognizant with the actual value of the small business or with what the small business was making. This really directly affects…. This addresses that. Again, because the majority of this — more than 50 percent — was localized to the metropolitan Vancouver area, Bill 28 allows local municipalities to make the decisions that they need to, to address the situation.

What does this tax actually do? As you know — we all know — businesses, families are struggling financially because of increasing valuations, leading to higher property taxes. What the legislation does: it provides a new tool. We already had the interim tool that was passed in March of 2020, so this is a continuation of that.

It provides a new tool to municipalities to help commercial tenants and owner-occupiers in their communities, for a time period, by reducing the municipal tax rate on all or on a portion of the assessed value of that land. Again, the assessed value may not be cognizant of the actual value of that land at that time, so what this does is provide a tool to correct that. Municipalities can implement this tax relief voluntarily where they feel commercial properties are paying unfairly high property taxes because of development potential and because of neighbouring development.

B.C. small and medium-sized businesses are an integral part of our community. This is a great way to help them see what costs they have and to help them recover. Why is this relief not mandatory, and why is there a time limit on this? Again, because this situation was really sort of localized in the metropolitan Vancouver area — more than 50 percent of the identified properties really were tied to Metro Vancouver — introducing a provincewide program for an issue that is really specific and is only occurring in specific municipalities could cause unintended effects, and we wanted to avoid that.

Again, also, we wanted to trust the local leadership and allow them to do what’s relevant and what’s appropriate for their municipality. Municipalities know best whether the relief is necessary and what types of properties need that relief. This is not unusual. Most property tax mitigation, most tax mitigation tools, are left voluntarily up to the municipalities, right? This is something that is in line with the legislation that already exists on many other things.

You may ask: why not regionally instead of voluntary decision by municipalities? Again, this is in line with legislation that exists already in other tax mitigation avenues. Similarly, those tools are available to municipalities to voluntarily alter tax. This does exactly the same thing.

I will reiterate. Local governments and municipalities know best whether that relief is necessary. They know which properties need that relief. They know which areas need that relief, right? For us to introduce something provincewide just does not make any sense on the ground. Doing that by region or provincewide would have maybe been too limiting or would maybe have been too excessive.

Again, we trust municipalities to be able to do this. We’ve trusted them to be able to do this because there are already existing voluntary tax mitigation tools, so why not trust municipalities with this as well? There’s no reason not to. Hence, Bill 28 really follows in line with all the other property tax mitigation legislation that’s there.

What is the tax relief eligibility criteria, and how will it work? The tool is very permissive, and it’s not automatically applied. Municipalities and taxing and treaty First Nations can decide whether or not to implement it, again, leaving it up to local leadership, trusting our partners in local leadership.

[3:35 p.m.]

[S. Chandra Herbert in the chair.]

For properties that meet the provincial eligibility criteria, municipalities could choose which properties or which areas receive that relief. They could set the percentage of the land that would be taxed at a lower rate, set the rate by areas or by kinds of properties.

Tax relief will be available to eligible properties for up to five years from the first year of that relief. Why that time limit? It’s because if a municipality has, and the market has, identified an area as a potentially lucrative development area within those five years, more than likely that imbalance of what the business is worth or what the business is paying will be caught up. You’re not unfairly taxing a small business or non-profit, and on the other hand, you’re not unfairly taking away potential revenue from a municipality.

Will this program result in any lost revenue for municipalities or the province? It won’t result in any lost revenue for the province. Municipalities have the option to redistribute that tax liability to make up for the foregone revenues within class 5 or class 6, which relate to business and industry, or they can redistribute it among other classes.

Some municipalities may have revenue-generating op­portunities, allowing this measure to be accounted for elsewhere in their budgets, but again, we trust our partners on the local level to be able to do that. We’re hoping that communities, businesses and non-profits will be able to see the benefit of this tax relief by the 2023 tax year.

Just in response to my friends concerned about the timing of this bill, in reality and practicality…. This is second reading right now. It has to still go to committee stage. After that, it will go to royal assent. We’re not sitting next week. In all reality, the local elections will be over when we get back from the break, after next week. I think this bill going through royal assent before that time is highly unlikely.

So what about the 120 question that has been posed? What about the businesses that were given temporary tax relief on the split classified remission order for the 2022 tax year? Will they benefit from this? Again, we gave business owners a year of relief through a temporary solution to ensure that this small group of certain commercial properties — again, mostly based in the Metro area — were not faced with a sudden increase in property taxes in 2022.

Now we’ve given municipalities the flexibility and the power to decide whether that relief should continue to apply to them or not. Local leaders know best whether that relief is necessary. They know their neighbourhoods, they know the potential of their neighbourhoods, and we’ve left that decision up to them.

You would ask why a municipality would want to lower the tax that’s generated. Really, businesses, small businesses, non-profits add to the fabric and the culture of community. As my friend so eloquently spoke of seeing businesses board up and close, no local leaders want that, right? That in itself is the greatest incentive.

What we heard from local leaders, what we heard from municipalities, is that high property taxes were hollowing out their communities, that this is exactly what was happening. So that, there, is incentive enough, and we trust municipalities and local leaders to do the right thing. This is what they’ve asked for; this is the power that we’ve given them.

There are also questions posed: why wasn’t this done earlier? The interim measure was placed in 2020. We did consultations, again, listening to local leaders. Hence, we have Bill 28 at this point. We consulted with representatives from the Metro Vancouver municipalities, from Kelowna, from Victoria and UBCM. We also consulted with various business improvement area associations, chambers, the Canadian Federation of Independent Business, Small Business Roundtable, the Building Owners and Managers Association. Bill 28 is a result of all of that work.

[3:40 p.m.]

Another question that was posed by my friend opposite was a question about his colleague and his colleague’s private bill, which was a great effort. But unfortunately, that bill did not specifically target businesses operating under a lease and applied to all commercial properties on the list. The application of that proposed bill would have been so broad that it would have significantly impacted the tax treatment of thousands of industrial and commercial properties with development potential across B.C.

Rather than doing that, rather than having a reaction, we went out and consulted not only with local business leaders and non-profits but also with local municipal leaders. This Bill 28 is a result of that. Bill 28 really is the result of a lot of work, a lot of collaboration, and I’m very proud to support it.

B. Stewart: I’m glad to rise today on the occasion of this bill, Bill 28, one that’s rather familiar to the official opposition. Bill 28 is said to be designed to address the problem of skyrocketing property taxes on businesses throughout B.C., specifically properties that have the air tax above them. The bill works in enabling municipalities to utilize the split assessment when taxing properties so that if a municipality so chooses, businesses no longer have to be taxed on the development potential of the air above their heads. This is a measure to address rising taxation on B.C. businesses, many of which are struggling to get by, especially after a challenging few years.

We’ve asked about the split assessment legislation in this House and proposed with private members’ bills, but I do want to talk a little bit about the extra cost and the burden to businesses. Prior to COVID and the impacts of that, we added on new taxation in terms of the employer health tax. We’ve seen continued rises in minimum wages, recently the paid sick days and then, layered onto all of the challenges that COVID has presented in terms of revenue, the employee shortages and the fact that these businesses are hemorrhaging from the fact of just trying to keep a business afloat.

I know that the businesses that we see and we’re talking about here today are many of the ones that are in leased properties. They’re not necessarily the ones that are in a situation where they have a huge amount of ability to find the extra revenue that’s going to drive the revenue to be able to pay what is being driven by a hot or unaffordable housing market.

As I mentioned, the member for Kamloops–South Thompson has been a tireless advocate on this issue, introducing a private member’s bill on split assessment on five separate occasions while this government has been in power. But you know, each time, it’s been ignored by the government. There’s a laundry list of reasons, what they’ve said about what it is and why it won’t work.

I kind of looked through at some of the quotes, and I think this is about finding solutions, not to find barriers to being able to find a way to help small mom-and-pop businesses make their way forward and pay all of the new and increased costs, albeit that they’re not the ones driving employer health tax or anything like that, but they do pay it if they meet the minimum thresholds.

But let’s just take a look at some of the comments that have been made by the government on this, about the split assessment: “It is too broad. It does not take into account the significant consequences to the entire tax system, and it is not going to give the small businesses the tax break that they need.” That’s from March 31 in ’22, by the current Finance Minister.

She said earlier: “In fact, if implemented, it could leave small businesses worse off, as tax cuts for big developers and speculators that are sitting on development properties lead to rising taxes for small businesses and residents. It is a poorly, poorly, poorly thought-out…that the member on the other side has.” That was February 27 of 2020.

[3:45 p.m.]

Again: “Whistler argued that the change will not achieve its intent of lowering tax…for small businesses.” That’s, again, October 30 of 2019, by the current Finance Minister, who at that time was Housing Minister and Municipal Affairs.

She goes on to say: “We are not ignoring them. We’ve heard from them loud and clear, and there will be a…fix for the 2020 tax year.” That was November 26 of 2019. We’ll come back to the date of 2019 in a minute. “We’re going to continue to work…on a permanent solution. The idea is a worthwhile idea, of the split assessment…. So we developed an interim solution. It’s a solution that I do know and I do appreciate is going to take a bit of work for local governments.” That was on March 4 of 2020.

Members of the government called the split assessment a poorly thought-out idea. You can tell by those quotes. I think what we have to do is get our head around why we have the problem and what it is that we’re trying to accomplish. I think that in this particular bill, there is an attempt at that, and I have to give the minister credit for that.

They said that it would create challenges around fairness and would not achieve its intent of lowering tax rates for small businesses. When the NDP implemented their own attempt at the temporary solution, not one single municipality used it, because it didn’t work.

Now, it’s not that municipalities haven’t studied this. In this particular document — it was dated July 10 of 2019 by the city of Vancouver — it talks specifically about independent small businesses, arts, culture, non-profit organizations — in your riding, Mr. Speaker. People, desperately, are in underdeveloped HBU properties, or they have the challenges of highest and best use where the Assessment Act directs property taxes to be based on the highest and best use.

The problem with that is if you’re a not-for-profit and you’re trying to get started, how do you possibly afford something that’s got all of that airspace above it? The bottom line is that we see it mostly in the city of Vancouver. We do see it in other urban areas. But we need to make certain that we’re looking at this through the lens of not just small business but the not-for-profits and the arts community, which I think deserve fairness as well. In some cases, the cities are able to either exempt that, but in a lot of cases, they may not be able to.

For underdeveloped, highest- and best-use commercial properties and unrealized development potential, it could result in significant property tax implications if something like a split assessment is not there for the municipalities to use.

We know that in the last few years, we’ve seen runaway housing prices. We’ve seen prices that, frankly, are some of the highest in North America and maybe many other parts of the world. We know that that’s probably caused partially by a supply issue. But secondarily, what it’s doing is fuelling the energy that is putting the pressure on B.C. Assessment to assess those individual properties and say that there’s this issue about the fact that the valuation…. There’s so much potential.

A small business, a not-for-profit, an arts group — they can’t afford that. Essentially, this is an interim step until those properties really do redevelop. And possibly, when the landlord that might be a big developer comes back and says that they want the mom-and-pop shop that’s in their business or the not-for-profits….. What they do is create reasons why they’re going to fill that space, whether it’s a mixed-use space or whatever.

So landlords, in this particular case, pass it on through triple-net leases, and it becomes a burden onto tenants. The problem is either they make an adjustment, or they lose the tenants, and the community becomes gutted because of the fact that we’re losing these small businesses, people that we want.

How many people…? We’ve talked about this in our Finance Committee meetings — about the arts commun­ity and how it was dealt such a severe blow during the time of the pandemic. The bottom line is that a lot of these people are just trying to get noticed or show off what they’re doing, etc., and they need a leg up. They’re not at the point where they can afford a ridiculous highest- and best-use property tax on it.

[3:50 p.m.]

The other thing independent owners and operators may also experience is the cash flow problems that this exacerbates in terms of all of those other costs that we’ve put on. Whether it’s labour code changes or taxes or the cost of doing business, the bottom line is that cash flow is king when it comes to a business. If you don’t have enough cash coming in to cover all of your costs, whether it’s food or your employees or the rent or the taxes, etc., you, essentially, soon find you’re out of business.

This report goes on to talk about some of the impacts that are potentially in here. It talks about zoning districts where there’s not enough specificity in zoning bylaws. Not being from local government — but I can understand that if there was a case that the zoning had the specifics that allowed for exemptions, it just falls to the lowest common denominator.

By now, after years of delay and countless small businesses having to close their doors permanently, which I’m sure that many of us have seen in the city of Vancouver and other communities, we need to finally come forward with a version of a split assessment that’s going to work.

I just want to read from the Canadian Federation of Independent Business. It talks about: “This proposal is one that many stakeholders have come out in support of. The policy would help give some of the businesses being pushed out of our neighbourhoods from a phenomenon that’s completely out of their control,” says Aaron Aerts, the western economist for the CFIB.

They also go on to say: “The policy is known as a split assessment, which allows municipalities to set lower tax rates on the air above the small businesses, known as the ‘development potential’. Currently, municipalities must charge the commercial rate on that air, which in some cases is four or more times higher than the residential” rates.

I’m glad. We’re glad as opposition to see that the government has listened to us and hundreds of small businesses calling for this solution. It’s long overdue. But we do have significant concerns about this legislation. Does it go far enough? Just like the last time that the NDP tried to fix this problem. A 95 percent land value requirement by this particular bill may be too high.

What flexibility does it give different municipalities where they may have differences, etc.? Where did that number, 95 percent, come from? We’ll look forward to in further readings about this where our critic will be able to find the answers to those questions, I hope. But we want to make certain that this is going to be successful. I’ve just read off a laundry list of companies and businesses, not-for-profits, arts groups, some of the ones — they’re not the only ones that I can think of — that have been identified that have been disenfranchised by the fact that we have allowed this to go on.

It’s not the first time. We have had run-ups in housing prices many times before. But what we really need to do is put something in that empowers municipalities and local government to do the right thing and not allow them to drive these businesses out of their community.

So we have little transparency in how the properties will benefit from this legislation at this point, and we don’t actually know how many businesses this bill will actually help.

It’s also worth noting that the legislation itself is only a temporary measure as the way the government has written it so that municipalities can only reduce the taxes on business property for up to five years. Well, five years. What’s going to happen? We’re going to have a real estate downturn? I don’t know. Is it going to keep going up? The bottom line is that I think it’s got to be dynamic. It’s got to be flexible. It’s got to be able to be workable. There doesn’t appear to be any option for municipalities to renew this beyond the time frame, meaning that these mom-and-pop stores and critical local businesses will face the same problem in a few years’ time. It simply just kicks the problem down the road instead of delivering permanent help.

Additionally, the NDP’s version of the split assessment will only be available to municipalities. So we’re excluding regional districts. We’re excluding resort municipalities. We’re excluding places where we don’t know that this might not exist, and it might be happening. I know that I read a quote from Whistler. But as we were just up there, I did notice that Whistler has got its fair share of boarded up properties, etc.

[3:55 p.m.]

They’re not immune to the effects of what the pandemic or high prices have had. Of course, Whistler doesn’t have the speculation tax, so we have lots of foreign influence in there, and I know that it’s not something that we want to upset. But on the other hand, I would beg to differ that Whistler is not necessarily in the same situation.

Other examples would be UBC. It’s on its own. It’s not part of the city of Vancouver. What about electoral A at Cultus Lake? Many areas bordering in the Okanagan, where I’m from — the Thompson, the Shuswap — will not be able to access this relief. All of these areas are businesses increasingly exposed to high property tax.

I can tell you that in my own community, I can’t help but look across the riding and see building after building that is not ten, not 20, not 30 but 40-plus storeys going up in the downtown. How is that not going to change the downtown of the city of Kelowna, let alone other cities? Maybe Penticton’s, next to Vernon? Why is that? It’s because of the fact that we still have this housing supply crisis.

We know that after six years, we’ve heard that the candidate running for the leadership and premiership of the government has put forward a bold and ambitious plan, and we’re anxiously awaiting the results of that. The former Housing Minister from Vancouver–Point Grey has failed to deliver on every opportunity to make those results happen. He promised 114,000, or the government did — 114,000 new and affordable housing units in ten years. All we’ve seen is about 7,600 of those actually built.

The bottom line is that without the housing, we’re going to continue to have the pressures that are going to cause split assessment. I hope that this bill, Bill 28, is going to help address some of that, meaning that it will be meaningful to communities to see that happen.

Anyways, I’m glad to see, at the end of the day, that the government’s seen the benefit of what the split assessment act legislation can bring. It’s frustrating to see that they’ve ignored our suggestions in the past and produced a bill that will not support all of the things we had in mind, but it is needed for B.C.’s small businesses.

R. Russell: It is my pleasure to rise in favour of this bill. I appreciate, I think, as most of us have heard…. The demand, the request for this has come forward, over time, from many of the voices we hear at organizations and venues like UBCM, for example, where municipalities want more flexibility. It aligns well with our own government intention, I think, which is evident in a lot of the work we do, which is really to recognize community as a central voice in terms of understanding what’s best for what they need and, on our part, here in this House, to be able to provide legislation that enables them to make those decisions in a way that works well for themselves.

I think this, again, is something that a lot of people have been waiting to see, and I’m happy to see that we are finally bringing something like this forward. We’ve already heard people speak to the kind of operational…. How this flexibility is going to come into play. But I think for me as well, it’s important to speak to — as we heard the member from Kelowna West as well as from Penticton speak to — how small businesses are really at the heart of our communities. This is a piece of legislation that, ideally, will help enable those small businesses to continue to thrive.

Certainly, in a lot of our communities, small businesses are part of the resilience in that economy as well, part of how we ensure that when global supply chains, for example, are disrupted, various kinds of pressures from outside of our province and outside of our communities aren’t as dramatically felt inside those communities.

It’s the small businesses that help even out some of the bumps in that economic activity, so giving local governments an avenue through which to provide some flexibility and lessen the tax burden, lessen the pressure on those small businesses, is certainly something that is important to me as a member here and, I think, to us. We know that small businesses are an enormous component of Canada’s economy, beyond just the actual numbers of those small businesses.

[4:00 p.m.]

Of course, they vastly outnumber the larger businesses, but I think more telling is the fact that those small businesses in Canada in 2020, for example, composed 68 percent of employment across our country in the private sector. That’s something to be proud of, and that’s only the small businesses. When you include the medium-sized businesses, that adds another 20 percent to those numbers. So the vast majority of employment in our communities is in those small and medium enterprises.

I’d like to also speak a little bit…. I know the previous member, the member for Kelowna West, had mentioned the question around the 95 percent, which I think is a good question. You know, why is it set at that level?

I’ll read a little bit here: “The properties with developmental potential have a high land value because they often have dated or fully depreciated improvement.” Most of their value is in the land. That’s the challenge we’re trying to address here. The determination of that 95 percent is that, after analysis, in consultation with a core group of municipalities and B.C. Assessment, a ratio of at least 95 percent would ensure that most properties with that development potential that we’re trying to support would be eligible. A municipality can, of course, increase that number if they wish, if that would better suit their own needs, and I think that’s an important piece to highlight.

There was also a question about why…. You know, what are the implications of the fact that the interim business property tax relief wasn’t actually utilized by local governments? I think it aligns with some of the challenges of that 95 percent and making it a lower number. While some municipalities have expressed interest in that interim legislation, none of them actually utilized it.

The main feedback that was heard on that legislation was it was too cumbersome and complex to implement. I think that also speaks to the challenges of the private member’s bill that was brought forward on the same topic. For example, municipalities felt that having to verify a triple-net lease would be simply too administratively burdensome, which is…. That’s the challenge here that we’ve heard from members opposite that we want to avoid — placing too much of an administrative burden on local governments in order to provide this flexibility.

So that’s the nature of this bill that is coming forward. Partly, the advantage is the simplicity in how it is defined and reducing that burden on local governments to provide the flexibility that we know that they’ve asked for and this piece of legislation is intended to provide.

Municipalities also felt the legislation only addressed volatility, so increases in assessed values, and didn’t address the core issue of taxes on development potential, which is what we’re intending to address here. And in that process…. Again, where did that number come from? That came from extensive consultation with municipal partners and B.C. Assessment and, particularly, the city of Vancouver, where 50 percent of the target properties are located. Their concerns were discussed regarding that interim legislation and where there is….

While there’s no solution, of course, that’s going to meet every municipality’s needs, that balance was struck because it would help municipalities provide relief to the businesses most in need while not providing too much of an increase of that challenge and administrative burden for local governments. The detail and design of this legislation has been worked on with those stakeholders to ensure it’s usable and effective in those domains.

Again, back to the question, also, of the member for Kamloops–North Thompson and the bill that was presented there. That bill was challenging, I think, on a few different levels, one of which was that it was simply so broad that it didn’t give those municipalities the flexibility to do what they know their communities need, which again is central to what I feel like I am using my voice for here in this House, which is to entrust that communities can lead in whatever way possible, and we can help support and enable their leading.

[4:05 p.m.]

A blanket adjustment is challenging. A blanket change to all those commercial properties, I think, would be problematic, and that would significantly impact the tax treatment of thousands of industrial commercial properties everywhere, which is an issue. Again, without providing that flexibility to address the issue at hand, in the situations where it was most suited, which would of course then…. For those of us that have come out of local government, if that blanket application was in play, it would simply mean that tax rates elsewhere would have to universally increase to meet the budgets that a local government is setting out and trying to satisfy with those taxes.

That bill also required B.C. Assessment to calculate a tax on an unbuilt airspace, which is something that is, as far as I understand, foreign to what B.C. Assessment currently does and certainly would be a new and potentially challenging assessment to bring into force without an enormous process of appeals following suit.

I will conclude by saying, again, that I think there are many examples where we’ve demonstrated…. Certainly the world of emergency management is something that I am familiar with. I’m very proud of the province of B.C.’s approach to put communities at the centre of how we navigate through community recovery. This, to me, is another example of how we try to help in this House, how we try to help our communities do what they know they need to do best.

As with emergency management, we go to those communities and we ask them what they need, and we try to figure out how those of us here can help support that. This is a similar thing, in my mind, where we are moving forward with legislation to go to communities that have asked for some help, figure out how to provide enabling legislation that is not directive or prescriptive and be able to let them do what they need to do.

R. Merrifield: Thank you to this House, because what I love about today and what I love about the debate that I’ve been able to listen to is that this House is in agreement on the importance of small business, on the importance that it brings to our communities and the importance that it is to those that are employed by them.

We’ve heard a lot of statistics, and the member for Vancouver–False Creek was talking about the statistics in her area. In the Okanagan, 95 percent of all businesses are small and medium enterprises, but we have a much higher percentage of those that are employed. So we’re looking at between 85 percent and 90 percent that are employed by those small businesses, which is a much higher percentage.

We know, not just from the anecdotes within our community but also from the experts, how important small businesses are. The Harvard Business Review actually notes that small businesses are imperative for an economy to have resilience, for an economy that needs recovery or for an economy that is in the midst of innovation. We absolutely need small businesses. We need medium businesses.

This bill is not unusual for us, because as has been noted already, my colleague and the member for Kamloops–​South Thompson has been a tireless advocate on this issue. I think he’s actually introduced a bill on split assessment on five separate occasions. His efforts have been valiant and almost akin to banging his head against the wall. But, truly, he’s been doing it because he’s been sounding an alarm bell for our small businesses who have been adversely affected by not having the ability to have a split assessment zone.

[4:10 p.m.]

Instead of moving the bill forward, this NDP government has chosen to move their own bill forward, which is supposed to address the problem of skyrocketing property taxes but introduces complexities that I think are unnecessary. On face value, yes, the bill works by enabling municipalities to utilize split assessment when taxing properties so that if the municipality chooses, businesses no longer have to be taxed on the development potential of the air above their heads. But what happens if a municipality decides not to do that?

Businesses need relief. They have taken so many hits over the last few years, between the COVID shutdowns, the supply chain disruptions. Whether it’s been the fires, the floods, COVID, strike action, labour force shortages or insanely high inflation, they are hurting. They are still hurting. They have not recovered. In fact, many of the associations out there are still sounding the alarm bell. This is relief, but it’s a little too late.

While this might seem, at face value, to be somewhat of a collaboration with our municipalities, it’s yet another download of provincial responsibility onto our municipalities. Our municipalities are stretched. Rather than doing something, a bill, that was straightforward, like the one that the B.C. Liberals have been putting forward, we’re getting something that is more complicated and is really a download onto the municipalities. Why? Why did the NDP government actually ignore the bill that was brought forward?

My colleague from Kelowna West has done a great job of actually giving quotes from some of the NDP ministers as to why a split assessment wouldn’t work, why it couldn’t be done, why it was a poorly thought-out idea or how it would create challenges around fairness. Yet here we are debating exactly this and supporting this. It’s delightful that the NDP have come around to see it the B.C. Liberal way.

My other concern is that the temporary measure that was put forward previously didn’t work. Not one single municipality used it. So the NDP have not been successful in creating something that would actually move forward.

I’d love some data on how many businesses have actually closed their doors because they couldn’t afford just one more January 1, where that tax bill was going to be ren­dered, where they couldn’t have their triple-net go up just one more time, where they didn’t have the revenue to bear what their cash flow was going to demand.

We can’t even fully use bankruptcy numbers, which are on the rise. We can’t even fully use bankruptcy numbers because many businesses won’t choose bankruptcy. They’ll just close their doors.

I have to say that I’m really glad. I’m really glad to hear all of the support for small businesses in this House and also hear that we’re finally going to see what we’ve been talking about for five years come to fruition. It’s really long overdue.

Where are my concerns with this actual bill? Well, the 95 percent land value requirement that the NDP proposes is actually very high. It’s incredibly high for most businesses, which won’t even qualify for this. It might work in downtown Vancouver, where 0.1 of an acre is selling for $24 million to $80 million, but it’s not going to work for the redevelopment properties in the downtown core with ma-and-pa restaurants.

Just on the one block…. I know I’m venturing into territory that Kelowna West has, so it’s not really just my riding. Small ma-and-pa restaurants, which are in old houses that sit next to either highrises or sit next to even eight storeys…. Well, their restaurant is not going to qualify. They won’t have that 95 percent land value requirement.

[4:15 p.m.]

The way it’s talked about in terms of depreciation is simply not how B.C. Assessment works. B.C. Assessment doesn’t depreciate the asset like it would on a balance sheet. B.C. Assessment actually is market value. As long as a house, in market value, is worth that, it won’t actually qualify.

The other question I have is: how much research has actually been done on this? We’ve heard a little bit about the consultation process, but none of the data. I would love to see how this will affect those in the South Pandosy area of my riding, or in the downtown core of Kelowna. I would love to see some data on how these businesses will be positively affected, but the 95 percent would need to be changed. I think that the previous bill, put forward by my colleague, would have a better mechanism, as it were, to actually put through that.

The other concern for me is that this is temporary. Five years seems like a long time; it’s not a long time. It’s not a long time for a business that’s trying to make a 20- or 30-year commitment to its community, that’s trying to provide a service or goods to its community. It’s not a long time in development, and there doesn’t seem to be any mechanism or option for these municipalities to renew beyond that time frame. So the five years literally is like a stop, and then there’s oblivion.

Why would a municipality actually implement that? Why would they go through all of the trouble to then just have it stop? Why would we, as a House, actually want a bill that doesn’t provide permanent solutions? Why would we want something that just kicks the problem down the road?

The other thing. In the Okanagan, we have a lot of regional districts. Those regional districts have properties that have values. While this only applies to municipalities — which makes sense, maybe, in areas like the Lower Mainland — in the Okanagan, it doesn’t make as much sense. We have some very expensive land and expensive properties that are outside of the municipal boundaries and that are in regional districts.

I understand why this is happening. I understand why we need split assessments. Anyone who looks at the downtown Kelowna landscape can understand how many tow­ers have gone up. We don’t have sales centres that still say: “Selling still.” They’re sold out.

We have a housing crisis in B.C. We have a housing supply issue in B.C. We haven’t been putting out enough housing over the course of the last six years. The former Housing Minister has built just 6.3 percent of the 114,000 homes that this government promised to build. What happens if you don’t build housing is that housing prices go up. What happens when those housing prices go up? Land values go up. What happens when land values go up? Small businesses that happen to be sitting on land pay a huge burden of property taxes.

I would say that we failed. We failed our small businesses by failing our communities with not enough housing. I would say that this NDP government has not been serious about actually increasing that supply. It’s only been in the last year that the NDP have actually figured out it’s a supply issue. In fact, we’ve been hammering on the demand side with more and more taxes rather than focusing on incenting supply. Here we go again — just another tax that has sat for five years when it could have been relieved.

[4:20 p.m.]

At the end of the day, I’m still happy. I’m still happy. I’m pleased to see the conversation around small businesses. I’m pleased to see the conversation around tax relief for those that are desperately trying to hang on. I am pleased to have the conversation about something that we have seen as an issue on this side of the House for the last five years and five submissions.

I just hope that we can get through some of the details of this bill and get it to a real, workable solution so that more than zero municipalities actually use it.

M. Dykeman: It’s a pleasure to rise in the House today to have the opportunity to talk about tax relief on the way for small businesses and the opportunity to speak to this bill on how it will positively impact my community of Langley. I was really happy to see this come forward, as municipal and business stakeholders have been asking the province to provide specific tax relief tools for businesses that occupy commercial properties with development potential and pay disproportionately high property taxes. That is a significant challenge in Langley.

We are one of the fastest-growing communities in British Columbia. We’ve had 14,635 people move to the community in the last five years — 3,862 new residents just from 2020 to 2021. That creates challenges. Growth is a wonderful thing, but it obviously creates a lot of different challenges within a community — everything from amenities for residents to opportunities for businesses to set up and continue with the pressure on available lands.

What’s really unique about my community is that the 160,000 people that live in the Langleys sit in a region of three million people, and 75 percent of the township of Langley’s lands are dedicated to the agricultural land reserve. Essentially, the township of Langley produces 80 percent of Metro Vancouver’s contribution to the prov­ince’s agricultural land receipts. In a little area with incredible growth targeted in communities, you have a large percentage of the land mass in agricultural production, which is fantastic. It’s so important, but what it does is it creates a significant amount of pressure, when you have that much growth.

People are moving to Langley because Langley is a great place to live. The township of Langley is home to 20 ac­commodation properties, nearly 300 food and beverage service establishments, and it provides the community with about $30 million in annual revenue. With growing businesses and residential sectors, there really is a lot of future growth happening in industry in that area, but it’s very isolated in where that can take place, because so much of the land mass is dedicated to agriculture.

Really in that area, you’ve got…. We, as Langley, are part of the end of Metro Vancouver, and then it goes into the Fraser Valley. You have a very small area creating the majority of the agricultural production, at least in that region.

We’re also a really film-friendly community. That has created lots of opportunities for people to welcome film to Langley, which has been a great economic driver in the region. We have a very diverse landscape, and we have a really cool community called Fort Langley. Fort Langley really is like stepping back in time. There’s a lot of history in that area, it’s really an area that people want to come and film in.

What’s funny is that it’s actually the summers when you’re filming your Christmas stuff. There are grocers there and wonderful little bookstores, like Wendel’s Bookstore and coffee shop. There are antique stores. There are neat little boutiques. What will happen is you kind of wander into Fort Langley, and it’s June, and it’s completely decked out for Christmas. There’ll be Christmas trees and snow. It’s hot out, and everybody’s wearing shorts, but it’s Christmas in Fort Langley, because we have so much film there. It creates so much for the economy, right?

[4:25 p.m.]

It’s a great place to have a store because especially in the film industry, so much of the shopping is done locally. That’s a really great opportunity in Langley — part of a fantastic community, a place with wonderful schools, lots of parks, lots of agriculture, a beautiful place to raise your children — but not a lot of opportunities for businesses to set up because it’s not a lot of land, and then you add the additional pressure of a lot of competition for the property.

That’s why something like this, where you have an opportunity to help businesses that are struggling because of increased property taxes, will also help address other challenges that have come at this time, including labour shortages and inflation, helping reduce the cost of it for businesses.

Such a fantastic thing to come forward at this time, because our small and medium-sized businesses are the backbone of our economy. They are the people who sponsor your child’s baseball game. There are people who live in your community. They shop in your community. They’re giving back to your community. These are the people that make a difference every day in our local economies. A measurable difference like this, providing an opportunity for B.C. businesses to have a reduction in the tax burden through this new municipal tax rate flexibility, is such a great thing to help our economy.

I do want to take a moment to quickly thank the businesses, organizations and municipalities for their support during the pandemic and keeping our businesses going forward.

Excuse me, hon. Speaker. I have a cough, and I’m going to have to wrap it up. Sorry. With that, thank you very much. I need to take my seat now.

T. Stone: I’m pleased to take my place in the debate today on Bill 28, the Municipal Affairs Statutes (Property Taxation) Amendment Act, 2022.

I know the general rule of thumb of this place is that the government introduces bills, and the opposition opposes those bills. A different way of saying it is that we in opposition have an important role: to shine a light on the intent of bills and on allocations of funding and public resources that are detailed in bills, and that all of those tough, important, focused questions are asked.

We’ll certainly do that with this bill here today, but I do want to acknowledge that I think there is an attempt here, on the part of the government, to bring forth a piece of legislation that, while it does have its flaws, is worthy of the support of members of this House.

I say that with respect to this bill because this bill largely encompasses the intent of a bill that I have brought forward in this House no less than five times. Five times lucky, I guess, is where we are today with this piece of legislation. Specifically, I have introduced, over and over, a bill intituled the Assessment (Split Assessment Classification) Amendment Act. Again, it was a bill that was intended to address the challenges that I think the bill in front of us today, from government, is intended to address.

There are some differences, and I will touch on those differences in a moment. There are some areas that I would hope would be worthy of consideration on the government’s part — some flaws in the legislation that, if ad­dressed, would make the legislation an even better piece of legislation and one that might have a much higher likelihood of being utilized as intended to reduce the property taxation burden of small businesses. But let’s just lay out the challenge that this bill is intending to address and, certainly, that the private member’s bill which I’d introduced was intended to address.

[4:30 p.m.]

The bottom line is that as our urban centres across this province…. Whether you’re in Kelowna — as my colleague from Kelowna just, I think, very eloquently outlined — or if you’re here in Victoria or if you’re anywhere in greater Vancouver, particularly the city of Vancouver itself, there is significant densification taking place in our urban cores. That significant densification is placing huge pressure on small businesses in a number of ways, but one particular impact is through dramatically increased property taxes based on the unused airspace above the heads of these small businesses.

When you actually sit and talk to small business owners and their patrons and explain to them how the taxation is actually imposed, how it’s calculated, what it’s on…. People look at you, and the general reaction is: “Really? This flower shop has to pay these inordinate taxes on the undeveloped potential that is above the existing structure, literally the airspace of that building?” Regrettably, one has to say: “Yes. That is correct.” That is a significant challenge that is imposed on small businesses through the current taxation regime.

What has been happening in communities around the province, again, particularly in Vancouver…. I think of the many businesses that I’ve met on West 4th, in the Granville corridor, in Marpole, in downtown Vancouver — again, also here in Victoria, Kelowna. When I think of the small businesses that I’ve met, the associations, the improvement associations and the like in these different neighbourhoods of these different communities…. There has been a long-standing common refrain of: “We need help. We need help with these soaring costs that are literally out of our control.”

Because of the triple-net lease realities that are in place for that particular business, meaning, as part of the calculation of the lease payments, any change up or down — and it’s very rarely down — in the property taxes owing on that property flow through to the tenants that occupy the space that is on the land on which the taxes are being calculated. These businesses simply can’t afford the huge escalations in taxes that they have seen.

The pandemic, obviously, placed additional strains, as we all know. We’ve canvassed thoroughly, on many occasions in this chamber and elsewhere, the impacts of the pandemic on small businesses. Different types of small businesses were hit harder than others.

The bottom line was that there were lots of small, typically independently owned and operated retailers, restaurants, cafés, florists, those types of businesses, which, by the way, really drive the vibrancy in our downtown cores and in our communities…. These businesses were beginning to have no choice but to have to shut their doors.

You still see it, to this day, in all of these corridors — far more storefronts that are boarded up or that have paper on the windows, big “For lease” signs in the windows. Usually, when you actually get to the bottom of why that particular location is vacant and is not being leased, it’s because of the costs of that particular space, which are largely driven by the property tax piece.

What we’ve all been hearing for many years now, from these business improvement associations and these different neighbourhoods and the patrons of these small businesses and the small businesses themselves, is…. This hollowing out of these communities and these neighbourhoods has to stop. But for it to stop, it means that we need sensible, realistic tax policy and other policies and regulations that make that possible.

[4:35 p.m.]

This is, obviously, partly the responsibility of local governments. They have a huge, huge role to play here. There are also things that the province can do to help, and that’s really what this whole concept of split assessment classification is intended to do.

The work that I did in the early days on this was really built upon some exceptional work that was done by a working group of local governments in the Lower Mainland. It had representatives from Vancouver, Burnaby, North Van, Richmond, Surrey and others that worked really diligently, through 2017 and into 2018, with a laser-like focus, to look at this challenge of soaring property tax bills, which was being driven by the rising value of the undeveloped future potential of that particular property.

These local governments were able to come up with a solution called split assessment classification, which is largely at the core of the bill here in front of us today. These local governments, this working group, were able to come up with a solution, in an almost surprising manner, with tremendous and almost unanimous support from business associations, from arts groups — a broad coalition of interests that don’t necessarily always agree on many things, including taxation policies.

This working group of local governments, the B.C. chamber, the CFIB, these improvement associations…. This broad coalition came together and actually drafted what they believed would be a viable solution, but it required the province to step up.

When I first introduced my private member’s bill in 2018, it was 100 percent built upon the good work of that working group and that broad coalition of interests — to facilitate, through provincial legislation, the creation of a tool that would be optional but, nonetheless, a tool that a local government could use to help reduce the tax burden on small businesses.

The solution of this working group, which, therefore, I proposed, through the private member’s legislation that I brought forward, really…. It contained two parts and was very simple: (1) to create a new commercial property subclass for the airspace above small businesses and other affected organizations and (2) to provide for, as I mentioned earlier, maximum flexibility for local governments to set the property tax rate on this new subclass as they see fit — literally, to set that tax rate at zero or just below the prevailing commercial property tax rate. That would be totally up to the local government.

That flexibility is very, very important. This challenge is pronounced in some communities more than others, in some neighbourhoods more than others and on some streets within neighbourhoods more than others. Flex­ibility is critical to ensure that the local government has the ability to tailor an approach that is going to provide the solution that will help drive down property taxes, as desired, in that particular area.

The bill that I brought forward five times provided the exact solution that local governments, business organizations, and arts and community groups were asking for — that optional tool that they can choose to use or not use, at a rate that the local government determines makes the most sense for the unique situation that they’re trying to address.

I would be remiss if I didn’t mention, at this point…. And I do so in good faith. The introduction of the split assessment classification, through the private member’s bills I brought forward five times, was met, each and every time, with skepticism on the part of this government.

[4:40 p.m.]

We were told over and over again that it was unworkable, that it would be fraught with all kinds of challenges, that local governments wouldn’t actually use it. On and on it went.

I think my colleagues who have spoken in second reading on this bill today have outlined some of the specific quotes that the current Minister of Finance, who at the time of at least the first three, maybe four, introductions of my private member’s bill…. The current Minister of Finance was the then–Minister of Housing and was responsible in part for shepherding this, or trying to address this issue. But we were told all along that this would not work and that it was not something that the government was interested in pursuing.

At one point — I believe it was in 2020 — the govern­ment decided to step forward and put a tool on the table that was going to address this challenge of skyrocketing property taxes on airspace, with an interim permissive tax exemption tool. Again, the current Finance Minister, who was responsible for this file at the time, was very, very energetic, and very, very focused on delivering a message of: “This is going to solve the problem.” Two years later, not a single local government in the province has actually utilized the permissive tax exemption tool that was fashioned by the government to do this.

Why didn’t the government take the advice of this local government working group, the UBCM or business organizations back in 2017-18, when that good work was done and the split assessment classification proposal was put together and hand-delivered to this government and contained in a private member’s bill that was written on that foundation? Why the government decided not to do this sooner and embrace that concept is beyond me.

But we are here today, and we have a bill in front of us today that actually does embody the split assessment classification concept. That does take those principles that were developed by that working group and incorporated into this legislation with the intent being, through this legislation, to create a tool that local governments would be able to use to address soaring property taxes on the unused airspace above their heads.

I will say this, and I said it at the outset of my comments today: we will support this bill. We do so saying it’s about time. But we are going to flag, in the committee stage on this bill, a number of areas where we think that this bill actually has missed the mark and, as I said earlier, some areas that frankly…. We would hope the government would take into consideration the suggestions that we’re going to make through the questions we will ask. We think if the government was to follow that advice, it would result in a better bill.

Perhaps the issue that we have the most significant challenge with is that to be eligible — this bill provides for a business — a business must have a ratio where the value of the buildings on the land is less than 5 percent of the total value of the property. It’s phrased in the bill as a 95 percent land value quotient.

This doesn’t make sense to us, and we think that this particular provision will actually preclude a huge number of small businesses from qualifying for this tax relief. As a result, we think that that might cause some local governments who otherwise would deploy this tool to not do so. We’re going to be looking for an explanation as to why it’s a critical component of this legislation that this 95 percent land value quotient be retained.

[4:45 p.m.]

The second area of concern that we have is the fact that this bill provides for a time limit on the use of the tool in a specific application of five years. Now, this one is easier to overcome, because the bill does provide for a local government extension. The local government just has to renew it every five years. Again, we would prefer to provide local governments with a clean piece of legislation that just says: “This is a tool you can use. If you want to use it on a year-to-year basis, fill your boots. If you want to use it every five years or ten years or whatever, that’s totally up to the local government.” I don’t understand why there is a requirement to renew in five years. It just seems like a needless requirement.

Now, while I wasn’t in the briefing on Bill 28, I know that my colleagues who were, were appreciative of the ministry staff that conducted the briefing earlier this week. We did ask a number of questions. We didn’t really get satisfactory answers, like: why that 95 percent land value quotient is in the bill; why there’s a five-year time limit on the use of the tool before it has to be renewed; but also, why there’s been no transparency on how many properties will actually benefit from this legislation. We’ll be asking that in the committee stage of the bill. We think that transparency is really important.

The last piece, again, I can only imagine is an oversight, but maybe there’s a different explanation as to why local governments that are governed by the Local Government Act, namely regional districts, were excluded in this legislation from being able to utilize this tool. Only municipalities will be able to use this tool if they choose to do so. Local governments are on this…. In relation to this legislation, local governments are able to use the tool. Regional districts won’t be able to use the tool.

This will impact areas like UBC and electoral area A — tremendous increase in densification at UBC and electoral area A. Tremendous increase in the assessed value of those properties and, therefore, the taxes that are calculated and must be payable. It’ll impact areas like Cultus Lake, many areas which border municipalities in a number of different parts of the province.

I can think of rapidly growing areas that are not incorporated. They’re not towns, villages or cities. They’re within regional district electoral areas in the Okanagan and the Thompson — my backyard in the Thompson — the Shuswap and other areas that, again, won’t be able to use to use this tool.

As with any bill, we will do our job. I will look forward to the good work of the member for Kamloops–North Thompson, our Finance critic, as well as the member from Penticton, who is our Municipal Affairs critic. I think they both will focus on some of the issues that I’ve mentioned here in my comments today in the committee stage on this bill, to really get to the bottom of intent and really get to the bottom of, from a transparency perspective: why this land value quotient of 95 percent? Why this five-year time limit? Why the lack of transparency? Why regional districts weren’t included, is the case. Hopefully, the answers will be satisfactory, but we will have some advice through those questions that we hope that the government does take.

[4:50 p.m.]

At the end of the day, that all being said, even if, after putting that advice on the table in committee stage, the government doesn’t see fit to make any changes to the legislation to address these areas of concern, we will support the bill on the basis that it does create that split assessment classification foundation that we have long advocated for, that we put on the table in this place through five private members’ bills over the last number of years.

I think, in this particular case, recognizing how important it is for us as legislators at the provincial level to always look through a lens of “what more can we do?” through policy and taxation approaches, and so forth, to assist and support those vital small businesses which are in our communities. What tools can we fashion? What policies can we develop? This bill provides a foundation for a good tool. It may be flawed in the ways that I’ve mentioned, but those flaws can be fixed — hopefully now. If not now, those flaws could be fixed at a later date.

With that, I’m again grateful that the government has brought this piece of legislation forward. I’m grateful that split assessment classification, upon passage of this legislation, will become a reality in British Columbia. I’m grateful that that will provide a tool — with some flaws, but nevertheless — that I hope local governments will embrace. I believe many will, and that will have the very positive effect of providing some much-needed tax relief for these vital small businesses which are really the life blood of our communities.

Hon. R. Fleming: It’s a pleasure to speak this afternoon on Bill 28. We’ve had a variety of speakers representing different municipalities that are part of their constituencies in different parts of the province for whom this legislation will be welcome — to members and property owners, business owners who lease property.

From the way that B.C. Assessment has conducted itself with the highest and best use of properties, creating some pretty scary tax bills that have been a part of being caught up in the development pattern in those cities…. I know that probably nobody knows this better than Mr. Speaker himself. A fairly recent transaction, on West Georgia, in his constituency, of a White Spot surrounded by towers of Coal Harbour condominiums was sold for, I think, a quarter-billion dollars, if I’m not mistaken. So certainly there are greater Vancouver voices that can speak to that reality, where the concentration of this type of activity and the tax implications are most felt.

I will try and offer to this debate this afternoon some of those that meet the reality in my constituency of Victoria–​Swan Lake, which encompasses both the city of Victoria and the district of Saanich, where the same dynamic is at play and threatening some businesses with outrageous tax bills that compromise their ability to do economic activities that are the core of their business and that are essential really to a diversified economy.

One example that comes to mind is a fantastic rede­velopment in what used to be a major rail terminal that now features thousands of condominiums and townhomes, but it has had a knock-on effect into industrial commercial businesses that really are not part of that, not even really contemplated in the zoning or amendments to the OCP, but are seen as areas where the value has risen dramatically.

How do you recycle auto parts and waste and scrap metal in the Inner Harbour of Victoria? We need to have those kinds of services. They’re part of a circular economy that we want to indeed have. But businesses like that are threatened.

[4:55 p.m.]

It’s great to see in the Gorge area…. We have a new area that’s kind of emerged out of nowhere in the last sort of eight to ten years that we call brewery row. There are lots of craft breweries. There are lots of really good, new businesses that are part of that, and they coexist alongside construction firms and the public works yard for the city of Victoria. Lots of different, very varied storefronts down there, if I can put it like that.

With those hipsters and all those cool activities, there has been speculation on behalf of the market that there’s an area that’s ripe for gentrification. The modest homes there could be could be much, much more, even though the city actually does not want that area to be redeveloped in the way that the development potential might speak to. They certainly want development in some parts of the city. There’s an area called Harris Green — which some members will recognize, because they might go to London Drugs there to get their stuff while they’re here as members of the House — that calls for no height limits. It’s where density is very much wanted and needed and is occurring.

The point I’m trying to make is that there is a spillover effect that has been going on in a number of communities. We’ve heard from members of Kelowna. I’m speaking for greater Victoria. Metro Vancouver — I think there are a number of other communities that could be implicated in this trend that we’ve seen.

It is not everywhere in British Columbia, though, to be sure. I think that the committee we had worked with, with the Union of B.C. Municipalities, the extensive array of small business organizations, were very clear on how we could zero in on and opt to create a bill, which we now have before us in this House, the kind of flexible but focused tool that could address this problem so that municipalities wouldn’t have to see standard-bearing businesses suffer that they very much want to keep in business and support. And they also wouldn’t have to give up areas where they have low-density, outmoded uses and they wish to see market-driven densification.

It’s important to stress that not only do municipalities have the ability to opt in, they also have the ability to identify certain areas or certain properties that are going to be part of what this bill enables. It may be the choice of the municipality to exclude other areas where they actually do want to see, through the highest and best use assessment, higher taxes that motivate redevelopment. That will be their choice. They’ll be able to do things differently in the very same municipality that they’re elected to represent. I think that was an important point and a desire expressed by the Union of B.C. Municipalities.

[J. Tegart in the chair.]

So as I was saying, there’s a problem to fix here. It’s not a universal one. It’s fascinating to look at the numbers. Forgive me if other members have provided this analysis. But it’s fascinating to see how important to our economy the small business sector is in British Columbia. There’s a very interesting report that’s published annually, and I think has been for the last 25 years in British Columbia. I’m going to quote from the 2021 edition, which is a very interesting edition, because it has a lot of analysis of the impact of the COVID pandemic on the small business sector in B.C.

The B.C. Small Business Profile is the publication. There are more small businesses per capita in B.C. than any other province in Canada. So this is very much a small business entrepreneurs’ province. One in ten British Columbians are engaged in small business entrepreneurialism. There’s 5.1 million or 5.2 million people, perhaps, now in British Columbia. So 523,600 small businesses in the province — that’s incredible — employing 1.1 million people. And of course, the definition for a small business is under 50 employees. What this sector represents in our province economically is 31 percent of all payroll. So 43 percent of all workers employed are in the small business sector, and about a third of our entire gross domestic product in the province of B.C. is represented by the sum total of economic activity that is represented by small business.

What’s interesting, too, is the array of businesses that we can all imagine from local services, to small producers, small manufacturers. One area that caught my attention was the importance of small business in the export of B.C.-made products. I think there are 6,000 small businesses that are categorized as exporters that accounted for $15 billion worth of exported goods and services in the year 2020, which was a partially normal year, with COVID making it a highly, once-in-a-century unusual year for the balance of it.

[5:00 p.m.]

That’s a snapshot of what small business looks like in British Columbia.

I think our government has, since the day it was sworn in, recognized the importance of small business by working with them closely, by listening to them, by having active engagements with them, including on the close consultation for this legislation, including on a number of budget priorities. We have cut small business taxes in this province, and we’re proud of that. It is among the lowest rates in Canada, at 2 percent. That tax rate was reduced by Carole James when she was the Minister of Finance, and that has obviously been very good public policy in terms of supporting business growth.

The other thing…. I gave an overview of how important small business is. We have 523,000-and-change small businesses. What we’re talking about in Bill 28 is perhaps high hundreds or perhaps thousands. So we’re talking about a small percentage but an important segment of high-street businesses in certain commercial areas that are being hit by valuations that are exploding, skyrocketing and hitting them with big tax bills. This bill applies to small business.

I should mention at this point in the debate non-profit property owners or non-profit organizations leasing property as well, because we’ve heard from the voluntary sector and the non-profit sector that this is a big deal for them as well. I think it’s important to state. There was one member, I think, on the opposite side who wondered whether it would include them, and it very much does. I think, at committee stage of debate, undoubtedly members will have questions for the minister about that.

It’s certainly something that’s important to me. I’ve been working very closely for a number of years with the Trafalgar Pro Patria Royal Canadian Legion in my constituency, which is in a nice location — 411 Gorge Road — in terms of its centrality in the city, but it’s not an area of intensive development, although there is some infill redevelopment that was done. There was a former plywood mill that has been turned into a stunning redevelopment that supports many jobs and many good housing units.

Separate and apart from that, it’s on Gorge Road, but it has been hit by the belief that this modest legion hall’s highest and best use should be something like an eight- or ten-storey building. Well, there are no plans, let alone capital reserves, for the Royal Canadian Legion Pro Pat branch to do that.

That’s not what they’re interested in. They’re interested in the social activities and renting the hall and being a part of the community as they have been for years, yet we had to, prior to this legislation, use other existing tools with the city of Victoria to make sure that they weren’t getting nailed with property tax increases that were in the tens of thousands of dollars per year, which they were in no position to afford and would have required them to lay off staff and perhaps even close the bar and restaurant.

Instead, we were able to get the city of Victoria to use its permissive tax exemption tools that allowed them to keep the wolves at bay and find a workaround that met everyone’s interest.

They will be delighted with the legislation before us, because this means that for the next five years and beyond…. Obviously, this will be something that’s renewed if the tendency in real estate and development pressure is still there in half a decade from now. They will be delighted that for the next five years, they don’t have to worry each and every year whether that permissive tax exemption is going to be pulled out from underneath them. They will be able to be included by the city of Victoria in the new ability for this legislation to be able to ensure that the property taxes they pay are reasonable and within keeping of the actual activities that are happening on that property.

[5:05 p.m.]

This is what greater Victoria looks like. It’s often seen as the second cousin to Metro Vancouver, but its property values have gone up quite dramatically. I don’t think I have to tell members of the House too much about that because they’re probably reasonably aware of what real estate prices are like in every part of B.C. It has gone up significantly in greater Victoria.

It is leading to some positive things. Let’s be clear that densifying and redeveloping a city is not inherently bad. It’s when the pressure is everywhere and it’s not within the control of the municipality, really, to be able to put it where it would like it to be.

I think it’s worth acknowledging that this bill will keep the municipalities in the driver’s seat about where they wish to see density and where they wish to alleviate property tax pressure on areas where they don’t wish to see it — like, for example, in my constituency, the Quadra village area. This is a revitalized area that was a little bit hardscrabble going back to the ’80s and ’90s and early 2000s. But they formed a business improvement association.

They used that piece of provincial legislation to raise funds to create streetscape improvement projects. They attracted some new businesses into the area where there were a number of storefront vacancies. The coffee shops come. The people come. The animated sidewalk culture happens, and it’s a great place to do business. But most of those business owners or people who lease space to conduct their business…. They’re one- or maybe two-storey buildings, and the city doesn’t want them torn down.

They’re certainly not looking for a shopping mall to replace this vibrant high street, but because there are good, new housing projects going on in very adjacent residential areas, the pressure has emerged. This legislation will ensure we’re not going to be driving out the pharmacist, the florist, the movie theatre and the businesses that are part of the Quadra village area. I’m very pleased about that. We now have the ability, through our city elected officials, to be able to control that.

It’s also important municipalities were able to avoid losing revenue on this. So this is about promoting tax fairness and equitable distribution of the property tax pie across different classes of property tax. That’s what they were asking for, and that’s what they got through this legislation. I think that’s really good because, quite frankly, there had to be a lot of creative thinking. There had to be a lot of meetings between the small business sector and local government and the provincial government to figure this out.

Anybody who says this was an easy fix is wrong. It has turned out to be a very elegant fix, with a very low administrative burden on it for municipalities, which is excellent. But it did take a lot of conversation to make sure that there weren’t any unintended consequences that would flow from Bill 28 or any free riders created of property owners who really ought not to get some kind of relief that they likely weren’t even asking for. So that had to be done quite carefully.

We listened to organizations like the Canadian Federation of Independent Business. We listened to…. I’ve already mentioned the Union of B.C. Municipalities first and foremost. But we talked to BIAs, like the one that I mentioned in my community. We talked to organizations like the Building Owners and Managers Association as well as REALPAC to figure out how we could create the kind of legislation that we wanted, that was going to produce the results that we wanted and avoid anything that would erode confidence in it or be perceived as unfair to other taxpayers in a given municipality.

I can remember when the UBCM was kicking this around in various debates and resolutions over many annual general meetings. There was definitely a very loud voice from rural communities in B.C. and some regional districts in particular, saying: “Whatever you do, keep us out of this.” They recognized that this is pretty acute in certain parts of the province.

[5:10 p.m.]

I think, again, when it came down to the consultation and listening to the stakeholders that were involved. Then, of course, working with experienced legislative drafters to get it right, we were able to incorporate all of that valuable feedback to make sure that we weren’t snaring any unwilling participants. We weren’t taking away any local flexibility that elected officials at the local level would want to have to be able to make their own decisions, as they see fit, around the development of their community and how it will align with documents like neighbourhood plans and official community plans.

That’s a lot of stuff to consider. That was all part of the background. It was a very time-consuming and thorough process to get us to where we are today. I appreciate the unnamed persons who participated in that. It, undoubtedly, took a lot of time and a lot of smart peoples’ busy schedules to be able to convene those kinds of discussions and to get things right.

I do want to just maybe go back, very briefly, to something that speaks to the remarkable resilience of the business community in B.C. That is this once-in-a-century pandemic that we’ve just been through. A very scary time to be a business person, obviously, with public health orders, states of emergency, a virus with unknown properties that was global in its origin, society coming together to make sure that we preserve the health care system from collapse, the sacrifices that were made, a number of businesses being deemed essential. Who was essential, and who was not? A lot of information to absorb all at once.

A lot of businesses were really, given their nature, depending on the type of business…. Some of them were, in fact, ordered closed. Some voluntarily closed because it was rather futile, in the early part of the lockdown, to try and continue to operate.

The province had to work very closely with business and the federal government to make sure that businesses were going to come out the other side. Programs had to be invented out of thin air, with some idea of what we needed but no guarantees about how some of it would work.

I think a lot of members would acknowledge that the federal government got a few programs very right. Maybe some others we would wish to go back and redo.

The CEWS program, the Canada employee…. I forget my acronyms now. The CEWS program was vitally important for business survival. The Canada employee wage subsidy. That’s what it was called. I think we should thank Ottawa for how important that was.

The provincial government also layered on a number of programs that were complementary to businesses in general and employees of businesses and also targeted some businesses, as well, that were at risk by the nature of their activities and whether they were able to carry on or not.

Some businesses did very well out of COVID. Golf courses, apparently, flourished. I didn’t play a lot of golf during COVID, but I’m told other people did. A lot of businesses were really ground to a halt, and some of them are just emerging now.

I think of some of the programs that I had to create in the Ministry of Transportation and Infrastructure to save coach lines and private intercity bus operators. A 90 percent drop in business. No end in sight. Social distancing made it unmanageable, and travel demand just plummeted to nothing. We created a multi-million-dollar program to be able to save those businesses, working with them to get to the other side.

We did the same with airline carriers, not the big national carriers, which had a separate table with the federal government, but some of the regional airlines in B.C. We came up with programs that made sure that, at the end of the pandemic, we’d have those businesses there. We have a competitive regional airline market. We have all the good things that come with that. In the meantime, we invested in, in some cases, community-owned airports, not just to keep the lights on but also to do some valuable improvements while we had the ability to do so.

[5:15 p.m.]

To go back to that early part of the pandemic, where small business owners…. We were seeing, I think, 13,000 businesses closed per month from March until May of 2020, when the pandemic was the most difficult to ascertain and respond to. Then, a year later, to actually see, by April 2021, a net growth each and every month of new businesses and reopened businesses, to the point where B.C. became the largest rebound story of small business in the country and the only province where the number of businesses today is bigger, more substantive, than it was pre-pandemic.

We’re the only one that has actually outgrown where we were prior to the pandemic. I think that speaks to businesses, owners digging deep, finding their resilience, staring down their fears, getting and applying for the help that they could get from all levels of government. I think it is the strength of our communities reaching out to help business owners, and I think it’s an overwhelming business confidence in B.C. being a great place to do business.

Again, I think that is a story unto itself that we should proudly tell. It’s the story of hundreds of thousands of men and women who own these businesses in community after community. It also speaks to our ability to work, as a government, with the small business community when it comes to a very unique set of problems that are targeted at those that are being dinged with exorbitant property tax bills from speculative activity.

We’ve been able to define that problem. We’ve been able to talk about it, discuss it, convene the right tables, get the ideas out there. It’s always remarkable, and it’s always a positive thing when we can have the stakeholders that have been involved since the very first day, drafting this legislation, unanimously endorsing it — from the Union of B.C. Municipalities to the main small business representative organizations in this province. That is a tremendous thumbs-up of approval from them.

I look forward to having this unique, new set of tools available to alleviate some of the pressures that are un­wanted and unwarranted — except from a purely market-driven perspective on highest and best use — to be able to save iconic, necessary businesses in our community so that we have that diversity in the commercial activities in communities like mine, in Victoria, and other areas of the province that are going to benefit from this.

Deputy Speaker: Recognizing the member for Richmond North Centre.

T. Wat: Thank you, Madam Speaker. It’s good to see you in the chair.

So the NDP, the New Delay Party. That’s what the NDP government has become, because once again it’s too little, too late as we continue the discussion on this bill.

This bill sets out to address the problem of skyrocketing property taxes that many small businesses suffer from here in B.C. I think we can all agree that businesses have been hurting for a very long time.

The COVID-19 pandemic severely dented our economy, forcing many businesses to shut down, lay off staff or reduce their hours. This, on top of the real estate crisis, has made property rentals virtually a nightmare. This is also on top of rising crime rates that have been damaging and costing B.C. businesses a lot as they cope with in­creased vandalism, graffiti, theft and other troubling incidents. Let’s also not forget record-high gas prices that have been driving up costs for businesses, ultimately hurting consumers and families in this province as these costs trickle down to them.

Yet despite all these challenges they face, small businesses continue to be taxed in ways that are unsustainable and unfair, making B.C. less and less attractive for businesses every day. With all these hurdles and burdens that B.C. businesses have been bearing for years and years, British Columbians are having trouble understanding why this government always waits until the last minute to do something when the damage has already been done.

[5:20 p.m.]

My colleagues and I have been talking to local municipalities and small businesses, for years, to push legislation that will allow businesses to alleviate this tax burden. It’s long overdue. The B.C. Liberal caucus proposed effective, consultation-based and urgent bills that addressed split assessment. We did not bring this up just once or twice but five times. The NDP kept turning it down. Why? They said it couldn’t be done. They said it wasn’t the right solution.

Let me draw members in this House down memory lane. As recently as March 31 of this year, the Finance Minister spoke in this House. Let me quote her: “We did take a look at the member’s private member’s bill. It is too broad. It does not take into account the significant consequences to the entire tax system, and it is not going to give the small businesses the tax break that they need. That work is being undertaken as we speak.”

As early as November 26, 2019, the Finance Minister said, again in this House: “We are not ignoring them. We’ve heard them loud and clear, and there will be a tax fix for the 2020 tax year.”

Now, years later, the NDP has taken their idea and made it as late, small, ineffective and non-substantial as it can be. In the past, we have seen this government make an­nouncements, propose well-marketed so-called solutions and bring people’s hopes up, until we see the real results. When small businesses are surrounded by ever-rising house prices, that puts increased pressure on them as they see their own taxes rise. The former Housing Minister of this government promised to improve the skyrocketing prices in B.C., but despite many opportunities to do so, we have seen the opposite.

I could go on and on about the many instances that this government has been too late, broken too many promises and come up with announcements that amount to just words without any results. We have seen that this government may have some good ideas but no idea of how to get the job done. If this government cannot control the unaffordability of homes in this province, how can businesses count on the NDP to effectively support them?

Let’s not miss the obvious, undeniable facts here. This bill is not good enough. To be eligible, according to this bill, a business must have a ratio where the value of the buildings on the land is less than 5 percent of the total value of the property. That fact matters, because it excludes a massive amount of businesses that need this relief. Local stores, art studios and charities have all faced the risk of closure due to soaring property tax bills.

[5:25 p.m.]

In my critic role, I have heard countless times of how businesses in our tourism, arts and culture sector are facing significant uncertainty due to the worsening business environment that we are seeing because of all the adversities I have mentioned. It is disappointing to see the government propose a bill with such barriers for small businesses during times of need like this.

Take a walk around Vancouver’s crime-ridden China­town, for example, and you will see yourself that small businesses need way more support than this bill proposes. I still remember that when I emigrated to Canada in 1989, Chinatown was thriving for locals and tourists shopping, dining, watching movies, attending functions or simply walking around, enjoying all the historic buildings and sites in this culture-rich Chinatown.

Unfortunately, since the NDP government took power in 2017, Chinatown has been going downhill. Tourists and locals are scared to go to this historic town. I strongly urge members, on the opposite side, of the government to take a walk along Hastings Street and surrounding areas. I bet they’d be shocked and feel embarrassed, and they’d simply not believe this is British Columbia, that this is Canada. I really feel heartbroken.

The government’s lack of action on crime and rising business costs have damaged their community, leaving many businesses shuttering their doors. It truly is a sign of how out of touch this government is, as they continue to bring solutions that don’t fix the problem by not going far enough. The tax hikes, which many small businesses can barely afford, are only taking away from the economic growth and prosperity that we need now, especially as we recover from the pandemic. More small businesses need to be included in this support, not excluded. Instead, the NDP split assessment accounts for a few, leaving many in the dark.

In addition, this bill only applies to municipalities and has failed to include regional districts. It is also worth mentioning that the last time the NDP tried their own version of a temporary solution, as many of my colleagues have already pointed out, not even one single municipality used it. That speaks a lot about what kinds of so-called solutions this government has been talking about.

My constituency in Richmond North Centre is home to many small businesses that demand and deserve more support from this government. Richmond employs more than 10 percent of the Metro Vancouver workforce, contributing and playing a critical role in the regional economy, yet this is at risk under the disturbing trend, which this government has shown, of failing to be there for businesses and people when they need help the most.

A number of businesses in Richmond have either left or closed in the last couple of years, due to the challenging business environment under this NDP government. They don’t see any real solution in sight, as long as this NDP government is still in power. The B.C. Liberals have been listening to businesses that are hurting and have been bringing solutions to the table a long time ago.

[5:30 p.m.]

While this government moves at a snail’s pace to come up with proper support. British Columbians are losing hope with a government that clearly cannot seem to fix problems that continue to worsen, now, in their second term, and nearing their sixth year of government.

If the NDP had listened to the effective solutions that were on the table, small businesses in B.C. would have been much, much further ahead than they are today. Instead, B.C. businesses continue to fight an uphill battle in this province as they are bogged down with tax increases, a troubling rise in business-disrupting crime activity, record-high living costs and, worst of all, a government that can’t step up to the plate.

We all know that 98 percent of businesses in B.C. are small businesses and that roughly one in ten British Columbians are small business entrepreneurs. People are depending on holistic support to get by. With all these concerns, it is somewhat encouraging to see the members on the other side have dropped their rhetoric from when we first brought forward this idea, when they said…. Let me quote them: “This idea won’t work.” Let me quote them again: “It’s a poorly thought-out idea.” Another quote: “This is unfair.”

Unfortunately, however, just like this government’s track record could speak for itself, this bill ignores all the suggestions that we made to make this bill effective enough for the already hurting small businesses in B.C. It’s too late and far too little.

Hon. G. Chow: I rise to speak in support of Bill 28, the municipal affairs statues amendment act on property taxation.

Before that, I would like to acknowledge, today being October 4, the National Day of Action for Missing and Murdered Indigenous Women, Girls and Two-Spirit Peo­ple. We are honouring the lost lives and recognize that this is an urgent issue that we need to work on.

I would go back to the topic, which was in support of Bill 28.

I was shocked by the previous speaker, from Richmond North Centre, who spoke about an acronym for the NDP. Now, to me, NDP is New Dynamic Party, because since our election in 2017, we have promised and enacted a business plan to build a new hospital in Richmond. Be­cause of that, we elected three more members from Richmond, out of the four. I think we’re doing well as a new dynamic party. But we like to keep our name, the B.C. NDP party, B.C. New Democratic Party, right?

The member also spoke about tourism. Of course, everywhere is facing challenges from tourism. But we, as a dynamic party, have built the Chinese Canadian Museum in Chinatown, ready to receive people when tourism returns to normal. This was accomplished within this term, and that’s quite an accomplishment for our government.

[5:35 p.m.]

Well, I’m an old person. If you look at Chinatown, all the developments in Chinatown were all done when the NDP were in power. It started with Dave Barrett 50 years ago, 1972 — building of the Chinese Cultural Centre, building of the Chinatown parkade, building of the Chinese-Canadian cultural centre museum, on and on. I have not heard anything that the Liberals did for Chinatown, for the Chinese community.

Anyway, let’s get back to the business. I know a previous speaker has spoken about this bill, and I’m very happy that our dynamic party has enacted this act in order to help small businesses.

When I was on city council in Vancouver, in 2005, the first thing that really stuck in my mind after a decade was that an owner-operator of an art gallery located at the edge of the city of Vancouver came to talk to city council, asking for help because her property tax went up 70 percent in four years. She was not going to be able to locate where she was, where she actually served many clients. Eventually she had to move, and I think that really affected her livelihood a lot.

I even know — I was not on council then — that even in the last term there was a business that was forced to move out of the West End because of the increase in property tax.

I think we know how property taxes are being assessed, and we talk about the triple-net lease. So what is the triple-net lease, as opposed to people who rent apartments, residential property? They only pay a gross rent, which is really all they pay. The landlord would actually pay their expenses, including property tax.

For commercial property renters, you have to pay your rent, a share of all of the property tax that’s being levied on the property, a share of the maintenance and repair, and a share of the insurance. This is a great burden on small businesses.

We understand the importance of small business. It is the backbone of our B.C. economy, and 90 percent of our businesses are composed of small to medium-sized businesses. It’s very important that we help them, and we did during the pandemic. The businesses were challenged because of COVID, increases in property tax and also labour shortages and inflation. Now we are coming to the rescue and having a plan that we could actually improve upon and also give municipalities the flexibility on how to implement their property tax. So I think this is a great plan.

Many speakers have talked about some of the features in it, and I think this is great. Of course, the member for Kamloops–South Thompson talked about his plan that he presented to the Legislature. I think that plan has really not been studied enough.

When I was on city council, the city of Vancouver also commissioned a study on property tax in Vancouver, because the businesses were facing the issue that we’re talking about today. Prof. Stanley Hamilton studied the tax burdens facing commercial property tenants in Vancouver. It’s a very, very complicated issue, and I don’t think a split-class evaluation is the way to go for now, because each municipality is different.

[5:40 p.m.]

For a city like Vancouver, which has a relatively large support from the staff, it could probably administer that. But I think for any smaller municipality, it’s a burden.

Our plan, going forward, will be important, and we can always improve on it. It’s not cast in stone. I think we’re going to help these businesses, starting in 2023. That’s something….

I’m really proud of our government, who are able to come to the help of these small businesses. We have implemented our small business recovery grant under the StrongerBC plan, and as the Minister for Transportation and Infrastructure said, we have actually increased the viability and the vitality of our small businesses in B.C. so that we are number one in Canada.

We are good business managers. We are good entrepreneurs. I think this is a start, and I’m very happy and in support of this bill.

B. Banman: It is indeed a pleasure to speak, surprisingly, in favour of this bill, Bill 28, Municipal Affairs Statutes (Property Taxation) Amendment Act, 2022. Now, there are some shortcomings which have been mentioned by some of my colleagues, which I will probably go over. But I think it’s important to understand why this bill is here in the first place.

We’ve heard that 90 percent of businesses in British Columbia are small businesses that have less than 50 employees. There were some great statistics that were brought out with regards to the B.C. small business profile. There are over 500,000 small businesses in British Columbia. The vast majority of them have less than 50 people that work with them. Yet they account for 31 percent of the payroll. They employ 43 percent of British Columbians — almost half.

I was a small business owner myself. My grandparents had a small business. My father had a small business. I worked for small businesses when I was going through school. I worked for small businesses, and I opened up one of my own.

The vast majority of employers pay their employees first, and they survive if there is a profit. Or when I remember…. When I started up my practice, I was actually going into the red. That’s what happens when you start up a business: you take a chance. I had a lease with triple-net, and I remember those sleepless nights where I knew and hoped that the business would turn around. And it did, and I would get into a profit, and I was very thankful for that.

We need to take a look, I think, at what small businesses have done. They are clearly an economic generator in the province. We need a healthy economy to be able to get the taxes to pay for all the promises that we make in this House to the citizens of British Columbia. If we don’t have small businesses, clearly we can’t afford to do that.

Small businesses also are the ones you go to when you need a door prize. They’re the ones that sponsor our Little League teams. They’re the ones we go to all the time for donations.

We need to create an atmosphere in which we can help those small businesses grow, because at the end of the day, it benefits us all.

[5:45 p.m.]

We already know they’re one of the largest employers. They are one of the biggest economic generators. We’ve heard some of the numbers with regard to exports. So when we like to think of a quaint little coffee shop, that really only scratches the surface of what small businesses are.

It was made very clear to me, when I was the mayor of my city, that a small business has a larger economic impact in your local economy than some of the larger big-box stores. I’m not against big-box stores; I believe people have the right to choose where they want to go.

But they should also understand that all of those small businesses provide huge economic returns in the very economies that they are in. Unlike some of the larger businesses, their profits are spent back inside their own economy. I was told that a dollar in a small business has six times the economic impact as in one of the larger businesses because they buy their house, they buy their car, they buy their food, and their profits are reinvested and re-spent in the very communities that they are in.

If you talk to most small business owners, they have this sense of pride about the communities that they’re in. Many of them, when it comes time to donate those door prizes or sponsor a team, have this attitude of: “I need to pay back to the community that allows me to have a living, the community that has given me what I have.” It is almost a duty to pay back. It’s an amazing thing.

Let’s take a look at what they’ve gone through. They’ve gone through the pandemic, where they had to totally modify their business plan. They have gone through now, and are going through, hyperinflation — where costs are coming at them at all angles and rising. They have also had five sick days, which is a good thing, but they are now responsible for those five sick days.

They’re also responsible…. I hear the other side of the House bragged that they got rid of MSP, when in fact, really, that’s just a shell game. All that was done was MSP was put on — the burden — the backs of small businesses, and they now have to pay it. There’s one local car dealership where he basically said to me: “It accounts to about $90,000 a year. It’s what it’s going to cost me.”

Then, to add insult to injury, while all this is going on and we are coming up with circuit breaker grants and everything else, five times this side of the House has come up with basically the motion that is now before us. It has been modified, perhaps, but it’s the same idea. I’ve heard the Premier of this province say that we need to work together, yet there’s this attitude that any idea that comes from opposition must have little or no merit, and we should just dismiss it and ignore it. That’s what has happened.

How many small businesses could not hang on or are about to fail because this particular bill was not brought forward sooner? Five years is a long time to try and hang on when all of those things are coming at small businesses. We love to brag about them. I heard, you know, that we’re going to throw them a life preserver; we’re going to throw them a lifeline. What you didn’t tell them was that there was an anchor attached to it and that if they grab it, they’re going to go down, and they’re going to go under. That’s how they feel.

[5:50 p.m.]

When UBCM came up, we were told, “Oh well, not all of UBCM was in favour.” Fifty-four percent was in favour — 54 percent. There are governments that would love to have that kind of mandate — 54 percent. The legislation was potentially unfair. There were all these reasons why it couldn’t work, instead of getting down to the business, us putting our heads together in committee stage and coming up with something that would work. There are businesses that are no longer here as a result of that.

It’s not just this taxation that’s been hitting them. Talk to any retail business, and they now have to compete with online purchases. They have to compete with the very likes of new ideas like Amazon and eBay and all of these other things where you no longer have to go into the small business. It really is, in a way, cutting off our nose to spite our face.

I would encourage those that are at home listening to go support a small business. They need our help. They’re in trouble. It’s your neighbour that works for one, and 43 percent of the people that live on your block get their paycheque from a small business. It ain’t small potatoes.

I am saddened that it has taken this long. When they talk about taxing the air above them…. My town, Abbotsford, went through an official community plan. It was far-ranging and swooping, and quite frankly, it was overdue, according to many. I happened to agree with that.

That stroke of a pen…. When that official community plan, when those neighbourhood plans goes through, it instantly and dramatically changed the taxation bill that some of these small businesses were now faced with. For some of them, it was in the tens of thousands of dollars. Many decided to leave. Many looked for a different place. Many shut their doors, as was mentioned. That is not fostering small business.

Sometimes there are unforeseen consequences. As the city manager used to say to me: “The devil is always in the details.” There were unforeseen consequences to this particular highest and best use taxation rate. Then, if that wasn’t enough, they get hit with the spec tax as well. That is not fostering small business.

While I look forward to this particular bill coming forward, there are some of those details that we need to look at. One of them has been pointed out — that there are some electoral areas that have been omitted. We need to fix that. I would look forward to, actually, an amendment from the government side to fix that, because the last time I remember a very small change to legislation, it was just rejected. I know that if government comes up with the idea, it will pass. So please listen to this side. There are a couple of details that are missing, one of which includes electoral areas.

It’s not that hard. It doesn’t mean you were wrong. It just means it got overlooked. There’s no shame in that. There’s no disgrace in that. As a matter of fact, I think it shows courage, and it shows the collaboration that the Premier of this province has talked about. So let’s fix that, please. We can do better than we have.

[5:55 p.m.]

I know that we get used to the partisan politics that go on in this House. But quite frankly, the public does not. Who are we here to serve? We are here to serve the public. There are certain times when I think we need to put the rhetoric aside and actually work on behalf of those who elect us.

I’ve heard government side of the House talk about how important small business is. Five years too late. Would have been nice, the first time this piece of legislation came forward from the member on this side of the House, if it been paid attention to with a little more detail, rather than the Finance Minister dismissing it out of hand and coming up with every excuse under the sun as to why it couldn’t work when, in fact, we basically have very similar legislation in front of us right now.

That tells me, yes, it could have worked. There was just no will on that side of the House to make it work. There was no will to work together. The words are there, but the actions are hollow. The citizens that we represent deserve better than this. There is a willingness on this side of the House to work with government. It’s been my experience thus far that the reverse is not the same. I hope, moving forward, we can do better.

We’ve heard that what happens is that as we’ve gone through the skyrocketing values of homes, there are businesses that are now inadvertently being caught by being taxed with the air or what’s called the best use, literally, on their properties. Many of those small businesses, like myself, signed a five-year lease or a ten-year lease. You can’t just get out of the lease. There are severe financial consequences to do that.

So you go home, and you don’t know how you’re going to pay your own mortgage. Many small businesses when they go under, they just don’t lose the keys to the door of their business, they lose the keys to the homes that they live in because they have no ability. They lose their life’s savings. It’s not like banks are in a hurry to give loans to small businesses. It doesn’t work that way.

I think we can do better. We’ve seen the increases in property values, not throughout just the Lower Mainland but throughout the province. It’s been especially hard in places like Chilliwack — 40 percent. Langley is 39. Abbotsford is 38 percent. PoCo is 35. Squamish is 31. And Vancouver and Surrey were up 16 and 34 percent respectively. All of those things mean that, at the end of the day, the property taxes that small businesses end up having to pay are going up drastically.

Here’s why it’s important to all of us. In order for a business to stay alive, it has to make a profit. The only way they can make a profit is…. If their prices increase, that means that they now have to increase the prices of the goods and services that they provide. It’s not magic. It’s simple economics 101. A restaurant needs a 30 percent food cost on average. If their prices go up, if their prices of operating go up, that gets passed along in higher prices to the consumer or they lose money and close their doors. It’s not rocket science.

I know businesses that have been there. We’ve heard stories, in Vancouver in particular, where favourite iconic restaurants are basically shutting their doors because they can’t afford to do it anymore.

Then the other unforeseen consequence, as was mentioned, like one of the legions, there are non-profits that get tied up in this as well. Now they have to figure out a way of increasing their revenue stream or reduce the services that they provide to those that desperately need their help.

[6:00 p.m.]

It’s culture groups. It’s where we take our kids to learn how to dance or learn how to play instruments. It’s culture groups. We love to say that we are a multicultural society. We are, yet those very culture groups also have to bear this financial burden because we did not see the devil in that detail. Other small-scale service providers are also being forced to pay massive tax bills, including the spec tax, just to keep their doors open.

I look forward to the government, having listened to the very few things that we actually find that have been overlooked with this legislation, making amendments, as we go along, to change them so that we can unanimously support this particular bill.

With that, Madam Speaker, thank you for the privilege of being able to speak about this. Small businesses are near and dear to my heart. As I was saying, I had one. My family had one. Many of us have gone into one. They’re unique.

Please, I would like the government to listen. I appreciate that they have addressed a major oversight, but I don’t want us to become just another hinterland of big boxes and chains and everything else. Let’s find a way of helping these small niche entrepreneurs survive and continue to enrich in our cities and enrich in our lives.

Thank you very much, Madam Speaker.

Deputy Speaker: Thank you, Member.

Seeing no further speakers…. Okay, recognizing the member for Kootenay East.

T. Shypitka: Thank you, Madam Speaker. You had to look at your sheet. I’m incensed. It’s getting late in the day. I understand.

I’m thrilled to get up and rise today and speak to Bill 28, the municipal affairs statutes amendment act, 2022.

I don’t have a lot of notes. There are some bills that are easy to talk to. Some are not quite so easy. Some are technical in nature. This one isn’t. This one is a pretty simple, straight-up bill that has unanimous support so far.

There are some nuances in this bill that I think we’re going to address in committee stage, for sure. What I am really refreshed about is the sense and the unanimous feeling in this House that small businesses actually matter. That’s refreshing to me. I know people on this side of the aisle certainly support small businesses. What I’m hearing on the other side…. It seems to be reflective on that side as well. I welcome that. It’s refreshing.

We keep hearing these terms and these phrases. Small and medium businesses make up 95 percent of the businesses in British Columbia. Those are true statistics, but they really do have meaning. We heard the member for Abbotsford South, a few minutes ago, talk about the real impact, the payroll, 41 percent of the province. That is also another fact. It is a real economic driver. It is who we are as a society.

I was a small business owner myself for many, many years. I owned bars and nightclubs and restaurants and all those kinds of fun things. At the young age of 23, I was introduced to triple-net leases for the first time in my life. That, of course, is taking your base rent, your maintenance costs…. Those are things like insurances, utilities, things of that nature. Then, of course, the big one would be property taxes. That’s what we’re, essentially, talking about with this bill, the increase in property taxes.

I will just give a little shout-out to my old business. It was called Jughead’s Nite Club. It was a great place. It was the largest nightclub in the Kootenays at that time. There was a lot of fun.

[6:05 p.m.]

As a matter of fact, the member for Peace River South frequented the establishment a couple of times as the lead singer in a rock band. There are a lot of good mem­ories of these old businesses. It really is who we are, as a society. These small ma-and-pa shops, these small local entrepreneurs that have these dreams. They’re dreams of being successful. There are no guarantees — zero. A lot of these entrepreneurs put everything on the line. They do pay their employees first. Whatever is left, at the end of the day, is theirs.

I get really disappointed sometimes when I hear members on the other side talk about the top 2 percent. A lot of these top 2 percent people come from small businesses that turn into medium-sized businesses that turn into large businesses, and there’s never, ever, a guarantee. There’s no pension at the end of the day for these entrepreneurs. They put everything on the line. They take risks, and by the stroke of luck, some of them actually succeed — not a lot. You can look at bankruptcy rates.

I’ve been through some financial issues myself with small businesses. I’ve been through lots of successful businesses, but there’s been a couple that just never panned out the way you wanted them to. That’s the risk you take. But when you do make it, when you get through all the barriers and all the challenges that come from operating a small business and you do make it, I really think it’s unfair to be classified as a greedy corporate business owner. That’s what I hear too many times on the other side of the aisle. I really wish that that kind of nonsense would stop, because these are people that employ everyone in the province — a lot of them, anyway. I just wanted to make that one clear.

Bill 28 is designed to address the problem of skyrocketing property tax, as I said, on businesses throughout B.C. Those small businesses that have the airspace above them are being taxed at a high rate. This is about to alleviate that burden and create a subclass for those property classes, which is something we support. It’s nothing new on this side of the House.

As a matter of fact, this same conversation has happened in this Legislature five times, by the member for Kamloops–South Thompson, I think — too many names here. But he’s been in this Legislature five times, addressing this exact issue.

Not coming from his words, but coming from the words of CFIB, UBCM, mayors and business people across the province. This was a lot of heavy work that was done by a lot of people in this province and the member from Kamloops–South Thompson put a package together, bundled up nicely, brought it here in front of the Legislature and five times, it was refused.

So here we are in 2022, some three, four years later, and now it becomes something we need to address now. I’m not going to look at gift horse in the mouth, but one actually has to wonder why. Why did it take so long for government to realize?

We see some of the biggest assaults on B.C. businesses we’ve ever seen in the last four or five years. We’ve seen a layering and layering of taxes. We’ve seen 28 new or increased taxes by this government. I think it’s 28 now — 26, 27. Somebody can correct me on the other side, if they want. It’s devastating. We’ve got the employer health tax. We’ve got minimum wage that was increased by this government. Paid sick time. Labour shortages. Supply chains. All these things are layering on to business.

It’s good to see there is some relief in sight and that government is serious about this. We’re going to be going through committee stage to look at some of these things.

Some of the issues we will be addressing would be jurisdictional issues, such as regional districts — why they will not be included in this. Another one will be, I’m sure, on the land value quotient of 95 percent for land values versus the building or property values attached. Now, I heard the member from, I believe it was, Boundary-Similkameen say that would be up to municipalities to change that quotient, but I don’t believe that is to be true.

[6:10 p.m.]

I might be wrong and I could be corrected, but I looked into the bill. I believe it’s section 198.1(5)(b)(ii) that hard-wires 95 percent as the actual land value quotient. Please correct me if I’m wrong on that one.

Municipalities will not have the flexibility to change that. I think that’s unfortunate. You know that the closer you get to the Lower Mainland, the higher those values are compared to building values. Something in the Okanagan might not share the same high level of value for land that it would, say, in the downtown or west side of Vancouver.

I was shocked to hear that a White Spot restaurant was selling for a quarter of a billion dollars. Now, what’s it going to do to the businesses right beside that when a proposed 60-storey, 80-storey condominium or whatever is being built? That business next to it…. The air tax that’s going to be charged on that small business…. Well, it’s just not sustainable. They’ll be out of business, for sure, or they’ll have to get rid of it.

This comes back to the old point that I made earlier. It’s a shame. We’re going to be losing some of these ma-and-pa shops if something isn’t radically done.

Forgive me if I didn’t choke on the Minister of State for Trade’s comments that they’re…. I think the quote was “coming to the rescue” after billions and billions of increased taxes and the layering of the tax, which I’ve mentioned — the employer health tax, the spec tax, minimum wage, paid sick days. This is a constant chipping away at small businesses.

To say now that we’re coming to the rescue…. Well, I’ll try throwing that at my next chamber of commerce meeting. I’ll see how it goes over.

To the minister: I’ll let you know what the response is, but I don’t think it’ll be a favourable one. But it is appreciated all the same. We’re not going to look a gift horse in the mouth here today.

Other than that, I think…. We’re getting close in the day. I don’t know if there are any more speakers here that are up. If there are, I’ll give way to them, but I don’t think there are.

There were a couple of quotes here. I just wonder about the whole evolution of how this bill came to be. It wasn’t too long ago in this House that there were ministers, the Minister of Finance — there were a couple of other ministers in the House — that stood up and said that this couldn’t be done. This was too broad. It wasn’t addressing the issue, and it was dangerous. I don’t know if that was the exact word or not. It was going to be…. It would do the opposite to what members on our side were saying was going to be good for small businesses. I’m just wondering where that metamorphosis ever happened.

We’ve heard a theme on the other side that “municipalities know best.” That’s why we’re going to give them the tool to allow them to decide who the winners and losers are on the exemption of the tax on the airspace. That’s kind of funny to me, actually, in a way — that they would say that municipalities know best. I think they do know best.

When I can’t pay my property taxes to my local city hall anymore…. I have to go online and give my SIN number because government wants to control that. When we have a government that goes down the road and dictates that zoning changes will be implemented by the government….

Secondary suites is a theme, I think…. I see the member for Vancouver–Point Grey on the screen right now. He’s got a bold plan of implementing secondary suites across the province, all being legalized without municipal consent, allowing homebuilders to replace a single-family dwelling with up to three units, across the board, without municipal consent. It’s a little stark contrast to “municipalities know best.” If that’s the case, then let the munici­palities run their municipalities the way they should.

Other than that, Madam Speaker, we are in support of this bill. I don’t know if noting the hour yet is appropriate. I think we’ve got another speaker up here.

Interjection.

[6:15 p.m.]

T. Shypitka: Okay. All right.

Other than that, we’ll look forward to committee stage to address some of these nuances in this bill.

With that, Madam Speaker, I give you the floor back.

Deputy Speaker: Thank you, Member.

Seeing no further speakers, does the minister wish to close debate?

Hon. N. Cullen: I do, Madam Speaker. A few small comments, just in having listened to the debate for the last several hours.

I thank colleagues for their engagement and participation in this bill. As we’ve discussed, the impacts of this legislation, I think, will be profound upon many of the citizens we represent and the small businesses and non-profits in the communities that we represent as well.

There are two founding principles — if I may, Madam Speaker — that this bill addresses. One is specifically allowing efforts to help those small and medium businesses in our communities, and the non-profits that exist there as well, in order to not be hit by incredibly large tax bills that suddenly happen under a number of scenarios, which we’ve seen.

Fifty percent of the problem has been seen in the Metro Vancouver area, and that’s why this bill changes both the Community Charter but also the Vancouver Charter specifically. That being said, 50 percent happens outside of the Metro Vancouver area, affecting a lot of the communities that have seen rapid increases in rates.

The reason our government chose this particular path…. I have to look to the Minister of Finance and her officials for taking this course. It’s an enabling and empowering bill to allow municipalities, who, in my experience, often know best the lay of the land within their particular region as to where the tax bill is having the greatest impact on those businesses and on those non-profits.

There has been much talk of previous offers from the opposition, which I personally take quite seriously, when I see an opposition bill come forward. The challenge with the bill that had been proposed previously was that it was quite a blunt instrument. It was broad, sweeping. It was across the entire province.

This bill — under recommendations we received from municipalities, from the business community, from non-profits — was to be much more surgical in the application, which makes a lot of sense, if members will pay attention to the math.

If a municipality were required by the prov­ince…. The province told them: “This is your tax application to all of these commercial properties.” It would have affected thousands upon thousands of properties, some of them needing help, some of them perhaps not.

There was also a lack of definition of “unbuilt airspace,” this concept of unbuilt airspace. There’s no legal concept that we could find, nor was it proposed in the previous bills proposed by the member for Kamloops South. You just simply…. I think it’s irresponsible to pass legislation with terms that are not defined. It wouldn’t hold in tax court; it wouldn’t hold in our ability to apply it.

It is too blunt. The lowering of those taxes across those thousands of properties, without any input from the municipality, has to be offset by taxation from other commercial properties.

Members maybe have skipped over this piece on the opposition side. If we just applied this rule across the entire province…. The revenues have to be made up to the municipality from other ratepayers, other commercial properties. Suddenly you’re having a cross-subsidy be­tween ratepayers, some of it making sense, some of it making no sense at all.

[Mr. Speaker in the chair.]

In doing the consultation with businesses, with the non-profit sector, with municipalities…. The proposal that you see before you today has not only their support but their willingness to apply it. That is the whole point of the exercise — to look to find ways to relieve taxes in those particular places in our municipalities that have seen a rapid increase in their assessed value, sometimes in a very short time.

Another thing this empowers for municipalities is…. It allows them to change their official community plans, which we have encouraged them to do, to create greater densification, more livable cities, greener cities. When you change an OCP, the effect can be…. It can suddenly crank up the tax rate. By having this tool also in the toolbox, a municipality can change their official plan together, without having this cascading effect on the taxes paid by those non-profits and small businesses in the area that’s affected.

I’ve heard much support for the small business sector, which I, too, enjoy, as a former small business owner. There is unanimity, I think, in the House, in terms of their support.

[6:20 p.m.]

I know there’ll be debate, when we get to the clause-by-clause of the committee stage, to allow members to ask much more detailed questions, because sometimes the devil is in the details.

But we feel very confident with the precision of this bill. We feel very confident that municipalities in Metro Vancouver and outside will be looking to apply this to give that tax rate relief to those businesses that are being hit by suddenly increased assessment values. That will allow the densification and all the other privileges and hopes we have for our municipalities to go on, without having those unintended consequences.

I’ll end with this — that these are challenges, and these are good challenges to have. It’s the problem of being so popular. We’re a place where people want to come and raise their families and build their businesses. The consequence of that has been that we have seen a rapid increase in the valuation of the properties, not just in Vancouver but right across British Columbia. That creates an affordability issue, supply chain and all the rest.

The opposite problem is worse to have. I have represented communities that have gone through significant downturn, the hollowing out of the commercial and property sectors. That is an incredible challenge for any local government, any provincial government.

So we face this challenge head-on. We consider the demand and the supply side of all of these things, and we look forward to the continued support of this House.

With that, I move second reading.

Motion approved.

Hon. N. Cullen: I move that the bill be referred to a Committee of the Whole to be considered at the next sitting of the House after today.

Bill 28, Municipal Affairs Statutes (Property Taxation) Amendment Act, 2022, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. M. Farnworth moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 1:30 p.m. tomorrow.

The House adjourned at 6:22 p.m.