Orders of the Day

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

Committee of the Whole House

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

(continued)

The House in Committee of the Whole (Section B) on Bill 28; J. Tegart in the chair.

The committee met at 1:03 p.m.

On clause 1 (continued).

P. Milobar: Again, clause 1, just some more overarching questions for the minister, as we then get into more of the detail in 2.

We touched on the regional districts. I know the minister would like to just move on from that. But again, there are the areas, as the minister has acknowledged, around UBC and Cultus Lake and other high-population areas in the Metro area especially, but likely in the capital regional district area as well, where we’re currently taking this debate.

It seems that there wasn’t the thought to include them in. How difficult…? The minister says to try to not delay the legislation, but this has been questioned and talked about and brought forward to this chamber for the better part of four years now.

[1:05 p.m.]

It seems that the fastest and easiest way would be while you’re doing a review of which clauses within the Community Charter, within the Vancouver Charter, and then, by extension, the Local Government Act. The fastest and most effective way to do that would be to do them all at the same time.

If we do finally hear from the regional districts, because they were cited by the minister several times as being part of the reason this needed to take an extra few years, how fast could the minister and the ministry have complementary legislation in front of this chamber?

Regional district areas like those around UBC are feeling pressure as well, especially as SkyTrain starts to be developed. How fast would that be in front of this House? Or would they be expected to wait another three or four years — and by extension, those businesses that are impacted have to wait another three or four years — before they get the type of relief that the people who could be literally right across the street from them would be receiving from the city of Vancouver?

Hon. S. Robinson: I want to welcome everyone back from lunch, and I want to assure the member that I’m happy to talk about regional districts. I don’t know where he’s getting this sense of urgency to move along, except perhaps from local businesses that are looking forward to seeing this pass in the Legislature. But I’m happy to talk about regional districts.

Again, I want to reiterate to the member that this was first raised — I actually did a little bit of digging — as a concern back in 2010, when members opposite were on this side. In fact — I checked — there was no action taken at that time. We started hearing about it in 2019 — again, after we formed government — and started to take a look at it, and that’s when things were actioned.

That’s when we put in the interim…. We worked quickly to get an interim solution while we did the significant heavy lifting that people in the ministry had to do in terms of consulting, understanding where the pressures were, how to work with a very complex tax framework that currently exists and find the right tools to use that would deliver what needed to be delivered. That was a significant undertaking done in consultation with the business community, with local governments, understanding what we were all looking to achieve and the best possible way to do that. And so this is here before the House.

I want to assure the member that right now we haven’t heard anything from regional districts, including the one that he is mentioning. But staff assure me that now that we have a framework that is in place, it would be more easily accomplished to create a tool for regional districts if it is requested and desired.

P. Milobar: Well, I guess again we’re trying to get to the root of why they were left out of the consultation, why they weren’t asked. I don’t know many local governments that would say no to added flexibility within their own tax rolls, given that it’s up to their discretion whether they want to implement or not, to action this or not.

The regional districts were repeatedly cited by the minister. So why did the minister not instruct her staff, who have been working on this for three years, to proactively engage with regional districts to make sure that the Local Government Act actually did not have what has now turned out to be — and I’ll use the UBC area as an example — an inequity between areas within the electoral area around UBC and the rest of the city of Vancouver that borders right on it, when they are both facing the same types of development pressures, assessment growth issues and pressure on those businesses on those parcels?

[1:10 p.m.]

Hon. S. Robinson: I want to remind the member that it was regional districts — in fact, it was the Cariboo regional district — that didn’t want it. Again, regional districts aren’t saying that they want this tool. In fact, they voted against it at the UBCM. So it’s for that reason it did not make sense to invest the additional time and energy that would be required to have a tool when we know that businesses and not-for-profits in urban centres have been asking for something.

Again, I want to correct the record. It’s been two years that we’ve been working on this. We said that we would…. We created an interim solution, given the heavy lifting that needed to be done, the amount of analysis that needed to be done, the amount of understanding. Remember we’re working in a complex system, with 189 different local governments.

Regional districts were clear that they did not want to see a blanket. They did not see that they…. They did not support a UBCM resolution looking for this. So that also fed into our system. Having said that, if there is a regional district or electoral area that sees a need for it, we’re certainly willing to take a look to see how we can fit them within this framework.

Now that the framework has been established, it will be, certainly, another piece of work to see how it would work for regional districts. But I don’t want to hold up an important piece of legislation to adapt this legislation before us to a group that has not requested it and, in fact, has voted against it.

P. Milobar: Well, I’m sure the rest of the regional districts will be surprised to hear that the Cariboo regional district speaks for all when it comes to regional districts. Here’s the problem with everything the minister just said. It, in fact, passed at UBCM. It was 46 percent against, 54 percent in favour. Votes at UBCM are not separated between regional districts and municipalities. Everyone votes equally, and it gets blended together. So it wasn’t a regional district vote at UBCM, and the vote itself was not against this concept.

In fact, on March 2, in 2020, this is what the minister had to say in this chamber. “We certainly heard opposition to the resolution that was proposed at the last UBCM, with delegates from Victoria, Cariboo regional district, Whistler and Lantzville arguing that implementing a new commercial subclass would create challenges around fairness in who’s in and out of the subclass.”

Well, the interesting thing is that the minister seemed to take 100 percent that Cariboo regional district meant no regional districts wanted this, yet seemed to ignore Victoria’s concerns or Whistler’s concerns or Lantzville’s concerns and still forged ahead with the Community Charter.

Again, the question is: why did the minister not proactively reach out — especially to the regional districts that would be greatly impacted by this, like Metro — when there was already supposed to be consultation happening with the broader Metro area to begin with? Why was the board of Metro Vancouver…? Why was the electoral area within Metro Vancouver the only piece of consultation that didn’t seem to exist? The business groups were talked to. Mayors were talked to — some, at least, not all.

It seems that the Cariboo regional district carried a fairly good heft with the minister when it comes to why regional districts shouldn’t even be consulted. But the city of Victoria was totally ignored, because they had the same opinion.

Again, why no discussion with the electoral area in and around UBC and Cultus Lake, where we know there are these exact same types of pressures, which is now going to lead to further delay for relief for businesses in those areas?

Hon. S. Robinson: Well, UBCM was certainly at the table. They were part of the consultation, and they are the body that represents all local governments. I’m happy to read into the record what UBCM had to say about this piece of legislation.

Again, I want to remind the member that we were working as quickly as we could over the last couple of years. In spite of a pandemic, staff have been working diligently to get to work on this, knowing the pressures on businesses in almost exclusively urban situations.

So we have before us a piece of legislation that will help deliver the relief that businesses and not-for-profits are seeking. Staff have not heard from any regional district seeking this. They have, however, heard from municipal governments, so that work is focused there.

[1:15 p.m.]

The UBCM said: “The legislation introduced today addresses a concern that has been raised by UBCM members.” This is from Jen Ford, the president of UBCM, the new president. “This change enables local governments to provide tax relief for commercial properties that have seen dramatic increases in the assessed value of their land. Local governments were consulted as part of the process of developing this legislation.”

UBCM, I want to remind the member, was at the table. They represent all local governments. She goes on to say that she welcomes the province’s action to address this issue. To suggest that there wasn’t any representation from regional districts is actually not accurate, given UBCM’s participation. They represent all local governments.

As I’ve said to the member, and I’m assuring this House, should we hear from a regional district where, typically, you don’t see these sorts of pressures…. Should that arise, staff would be happy to undertake an analysis to determine how to best deliver for regional districts. Again, regional districts tend to be more rural in nature. It’s not always the case, but that is the tendency. To date, we have not seen or heard from any regional district in the province that has asked for this kind of tool, given the kind of jurisdiction that they are responsible for.

Clause 1 approved.

On clause 2.

P. Milobar: A few questions around the sections that have been added here — 198.1(1), and it’s around the definition of “development potential.”

I know the minister may feel that I’m trying to be difficult here, or she will probably by the end of my questions on this section anyways, but when I read “development potential,” it seems to be a contradictory explanation for how you get to the calculation.

So: “‘development potential’ means the difference between (a) the assessed value of a property, and (b) the actual value of the property determined taking into consideration only the actual use of the land and improvements that comprise the property and not taking into consideration any other use to which the land or improvements could be put.”

I guess the question I have is…. My understanding is that B.C. Assessment would come in. Part of the reason we’re here today is because B.C. Assessment does look and take into consideration the other use of the land that could be put, and that’s how you wind up with your assessed value that’s creating the problem.

If the calculation is the difference where you subtract the two…. So (a) is the assessed value of the property. That’s created by B.C. Assessment, and that’s created on the highest and best use of the property. Then you’re supposed to subtract away the actual value of the property.

Who will be making that valuation of the existing footprint? B.C. Assessment typically is the one that makes all of those valuations. I don’t see anything in here that says who would be the designate to say that no, in fact, because of the land and the existing use, it’s really only worth X. B.C. Assessment says it’s worth Y because of the higher-use potential. Who will be the one to make that determination of what the lower value is to get you that other half of the equation you need?

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

P. Milobar: Just to be clear, B.C. Assessment would only bother going through those types of calculations if they’re asked by the municipality, by the landowner? Or will it be an automatic assessment? When the original assessment comes out, they’ll have a secondary assessment sitting on the books for people.

[1:20 p.m.]

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

P. Milobar: My understanding is that we get our assessments in the fall. A typical homeowner would have the ability to appeal, but it has to be filed within a very short time frame to get that appeal.

Would municipalities, to ask for this secondary classification, be subject to that same time frame? Or is B.C. Assessment doing this completely independently, and it’s dependent on when municipalities decide to pass a bylaw exempting, or not?

Hon. S. Robinson: The roll is completed in the winter, and municipalities can ask for it as soon as the rolls are complete.

P. Milobar: Yeah, I get that they could ask as soon as the roll is complete. I’m wondering: when is the deadline that they could ask for it after the roll is complete?

Again, if I’m a homeowner, I have a very short window of time to file an appeal. My understanding is that October 31 the properties have to have the use on it already so that B.C. Assessment can conduct their assessments properly with the business operating on it. But municipalities have until the spring to get their taxation bylaw in place and set their rates as they normally would any other year.

It’s during those discussions, typically, that the municipalities would start trying to decide whether or not they’re agreeable to doing a tax shift, because this is what it is. If they’re providing relief to that business property, to that business owner, unless they cut their taxes collected as a city, they need to then move those dollars over to all the other rate classes.

I know the minister fully understands this, as well, but that would all happen at the same time while you’re developing a budget, because you’d have to know just how impactful this is going to be to other ratepayers and which rate class you’re going to put it to. Are there other commercial properties? Is it heavy industry? Is it residential?

What timeline has been built in? I don’t see the dates anywhere in this. That’s why it’s important that I think people get an understanding, especially in municipalities with brand-new councils coming in. What timeline will they have to actually be able to action B.C. Assessment coming in and providing that secondary valuation that they could then use to figure out what type of taxation they’d be waiving or not?

Hon. S. Robinson: Well, typically, the rolls are finished by December, and they have until May 15 to pass their bylaw. It’s within that time frame that a municipality, I would imagine….

I would hope that in January, early on, they would identify what their plans are around helping these particular property owners and ask for them as soon as they can to get these evaluations so that they could carry on making their appropriate plans that they need to do.

P. Milobar: What types of conversations have been held, then, with B.C. Assessment around staffing, around resources? I would assume that they would just be: “That’s the time frame.” They’re just coming off of finalizing things. They’re finalizing all of the appeals that get filed on a regular basis. If they’re like every other organization, once you finish a real busy time, that’s when people start to look to go on holidays and things of that nature.

What types of discussions have been held with B.C. Assessment around their capacity to be able to deal with any reasonable volume of actioning by municipalities on this type of a measure?

[1:25 p.m.]

Hon. S. Robinson: I want to assure the member that B.C. Assessment has been part of the working group, so they are fully aware of the additional activities that would need to be undertaken, and they are fully prepared to support municipalities, particularly through this first go-round, which I think will be a learning opportunity.

Moreover, we’ve heard from B.C. Assessment that they are prepared to help local governments, and staff are eager to help local governments, around bylaws and preparing them, given that this is new legislation and a new tool. We’re really eager to help them be successful in helping not-for-profits and businesses with some of these additional challenges that they face.

P. Milobar: What mechanism, then, with these valuations, is in place? What are the dates and timelines for an appeal?

A municipality appeals to B.C. Assessment to go out and give a new valuation based on just existing use. They provide that to the owner, and the owner still takes issue with that and says: “Well, no. Actually, you’ve well overvalued the existing use.” Although they are getting some form of tax relief, it might not be as great as they actually should be eligible for. The regular appeal process timelines would have come and gone.

Does the municipality have a new extended appeal process for this? If so, what are those timelines, and what’s the process that has been developed?

Hon. S. Robinson: I want to just remind the member that the assessed value of the property is the assessed value of the property. That isn’t changing with this bylaw. If any business or any property owner wants to challenge the assessed value, normal procedures apply.

What is different here is that the actual value of the property determined gets taken into consideration, which B.C. Assessment is providing the municipality. The municipality can use that information to help determine how to apply this bylaw.

If a business owner, a property owner, isn’t pleased with the bylaw, then they can take that up with the municipality.

P. Milobar: But the new mill rate that that business owner would pay would be predicated on the valuation. It’s a backwards calculation.

The problem is…. Just to use round numbers, if a piece of land is worth $1 million, according to B.C. Assessment…. The landowner and the municipality agree for some form of tax relief under this. B.C. Assessment comes in and re-evaluates for land only — not the highest and best use of the land but the existing use of the land — and they say it’s half a million dollars. But the landowner says: “That’s still not right. It should be $300,000.”

Is the minister saying that there is no appeal process for that new valuation — that it’s whatever B.C. Assessment says that shall be, and there is no appeal process for the municipality or the landowner to contradict what B.C. Assessment has come up with a land value of?

[1:30 p.m.]

Hon. S. Robinson: I worry that the member might be conflating two different things, so I want to be really clear that the assessed value of the property is the assessed value of the property. There are regular appeal processes that continue to exist. That doesn’t change.

The municipality is given additional information, should they request it. Then the municipality can choose to give permissive tax exemptions or not. They can also choose to not give permissive tax exemptions. That’s at the local government level. They determine how much relief and whether or not there is relief.

Anyone who feels that they should get more relief or less relief…. Not that I would imagine anyone saying, “Give us less relief,” but if they wanted more relief, then they would take that up with the local government and go through the proper processes around any other permissive tax exemption that currently exists on the books.

P. Milobar: Thank you, but again, this is predicated on a municipality deciding. If a municipality decides that these types of properties that are being re-evaluated, reassessed, qualify to go from a mill rate of $10 down to $5 per $1,000 of assessed value on the land, that is a tax relief for that property owner.

One would assume that they’d be thrilled with that. But if that’s capturing a dozen properties and one of those dozen properties feels that they really aren’t, as a chunk of land, worth half a million dollars and that they should only be at $300,000, that’s still a significant difference to that individual business’s property tax bill.

So although the municipality has taken action on mill rate, just like they do with the homeowner, the homeowner then has the ability to go to B.C. Assessment and appeal, and then there’s a recalculation the city does if they lose a whole bunch of appeals, eventually. It takes a little while to work its way through, but that’s the crux of it. This will all happen well after those standard appeal processes are closed for businesses or for homeowners.

So is there no appeal process for, I guess, the business owner to appeal the new valuation that B.C. Assessment comes out with for the land value?

Hon. S. Robinson: I was listening very closely to the words that the member was using. No one is being reassessed. Their assessed value is their assessed value. They can continue to use appeal if they feel like the assessed value of their property is not accurate. That mechanism still exists. It’s not changing.

The municipality can ask B.C. Assessment for the actual value of the property on the actual use of the land, what the valuation is, based on that. Then it’s up to the municipality to make the determination if they’re going to use this permissive tax reduction, not exemption. They get to determine not just whether or not they will receive it but by how much. That’s a decision of the local government. The appeal process, if that’s the case, would be with the local government, because the assessment is the assessment. That isn’t changing.

P. Milobar: I understand. I think the minister is conflating the two things I’m trying to say. That could be on me trying to explain it, so I’ll try to separate this out once again.

I fully understand that businesses will get their existing assessment notice and they’re going to have their existing time frame to appeal that. However, that assessment is based on highest and best use of the property, and they’re probably going to lose that appeal. They generally do. They might have it shaved off a little bit, but that appeal process has to be wrapped up.

They have to file, I believe, by January once they get their notice at the end of October, beginning of November. They have a very short window, as does every property owner in the province, to appeal that assessed value. So let’s park that off to the side. I understand that.

[1:35 p.m.]

What I’m saying is, after that appeal time frame is over, the municipality, in their deliberations — they have until May-ish to make this determination — says: “You know what? We’ve heard from enough business owners that highest and best use is really hammering them this year. So we’re going to deal with 20 properties. We’re going to reduce the mill rate on the highest and best use down to $5 from $10.” They go to B.C. Assessment, and they ask them to assess on actual use of the property.

I’m talking about the actual use assessment that happens. That actual use assessment comes in and says: “Yeah, it wasn’t really $1 million. It’s half a million dollars.” The landowner then says to the municipality: “No, no, no. The other 19 all agree with their valuations.” The one says: “It’s really $300,000, not half a million.”

Is there no appeal process for that landowner to try to get that assessed value of actual use to better reflect what they feel it is? They might still lose the appeal. It sounds like the minister is saying that’s 100 percent conversation with the municipalities. If they agree, they agree. If they don’t agree, they don’t agree. But there is no B.C. Assessment appeal process for either the municipality or the landowner to then trigger to try to get a more reflective actual use valuation if they don’t agree with that valuation.

Hon. S. Robinson: Again, I want to remind the member that we are providing municipalities with wide discretion to pick the properties and extent of relief using tax rates and assessed values, recognizing that because municipalities are right on the ground, they have a better sense of where tax relief is needed.

The actual value of the property determined, taking into consideration the actual use of the land that is provided by B.C. Assessment, is provided to the municipalities as additional information that helps the municipality make the determination about how much relief to provide. They can receive this information and decide not to provide any relief. They could easily choose to do that.

So this is just another way to help local governments, because this is part of what they’ve asked for, with information that allows them to make the determination about how much relief to provide. If a business feels that they should have more relief than what they’re given, then it really is up to the local government to make that decision based on some additional information that they’ve received from B.C. Assessment.

However, I want to remind anyone who’s listening that the assessed value of the property that comes from B.C. Assessment — they are free to question that and to appeal that to B.C. Assessment.

P. Milobar: It sounds, in a roundabout way, like the answer is no. There is no appeal mechanism if a munici­pality triggers the actual valuation of the land moving forward. I’ll get into more detail on that as we get to subset (4) in this clause.

[1:40 p.m.]

In subset (2): “For the purpose of relieving the impact of development potential on eligible occupiers, an annual property tax bylaw may impose property taxes under section 197 (1) (a) on eligible land at reduced tax rates.” I’m just making 100 percent clear for the record — and based on all of our back-and-forth already, I think it’s abundantly clear, but let’s make sure all the landowners understand — that this is not for any improvements on the land at all. This is strictly land value that we’re talking about.

Again, to use simplistic numbers, if you’re at $100,000 of land and a $5,000 assessed building, you’re still going to pay full tax on the building portion of the assessment. It would just be the land portion that the municipalities have the ability to try to structure a different tax rate?

Hon. S. Robinson: That is correct.

P. Milobar: Again, these will…. Because this is such a long clause, with so many of the details actually in it, I’ll bounce around a little bit. We have the 95 percent factor: the land value has to be 95 percent of the overall assessed value. So you have 95 percent. Again, we’ll use the $100,000. So it has to be $95,000 worth of land, $5,000 worth of a building.

Was there any discussion with that 95 percent calculation about the worry of basically incentivizing what would otherwise be well-maintained, smaller commercial operations to let themselves run down so that the improvement on the property, the building on the property, suddenly becomes only 5 percent of the overall assessed value, versus actually encouraging people…?

As with most town centres, most tax revitalization bylaws, if they deal with facades and things of that nature…. Municipalities are trying to waive tax to encourage people to actually make their buildings nice. This would actually have the opposite effect, where you’re actually encouraging people to let the building run down to try to make sure that they can meet the 95 percent threshold.

So why was that threshold created so high? Was there not concern or discussion about the very real problem that this would actually be counterproductive to trying to keep neighbourhoods looking nice and neat and tidy waiting for redevelopment by actually encouraging business operators and landlords to essentially let their buildings become decrepit and dangerous-looking so that they can meet the assessed value thresholds to get a tax break?

Hon. S. Robinson: Well, first of all, I’m very familiar with these properties. My community office is right where some of that activity is happening in terms of development potential. Remember these are about development potential properties, where there have already been either neighbourhood plan adjustments, some OCP adjustment, recognizing that they are development properties. So we already see some of the concerns that the member is suggesting with these properties.

Again, this is a good…. This can only be used for up to five years per property, so letting it languish for 20 years is just…. This tool can’t be used for very long. It’s only available to a property for five years while we wait for the redevelopment potential. So the risk that the member is suggesting is pretty minimal.

P. Milobar: My office is in one of those areas, as well, and tenants come and go. It’s in a good condition building, but it doesn’t take long to have buildings go from that to something else in a hurry.

[1:45 p.m.]

My understanding through the briefing was that staff had indicated that the five years is there but that there is the potential for extensions if the municipalities can make a case for it or wish to extend it on.

Were staff mistaken with how they characterized that in the briefing, or is the five years a hard, absolute stop?

Hon. S. Robinson: Again, let’s go back to what the intent of this legislation is. Local governments — I know that the member was a mayor and that the member next to him was a mayor — know what their communities need when they’re looking to redevelop. Where there are neighbourhoods that they identify for redevelopment, they change the OCP. That creates the problem that we’re trying to fix. It is up to the local government to help move things along, using the tools that they have. So we have put in here up to five years, as a tool in continuing to encourage their redevelopment.

It’s really up to the local government to make the determination, based on what’s happening on the ground. If they should need an extension for whatever reason, they’d have to make a case for it. That tool could be made available to do that; that’s certainly a possibility. What we’re all trying to do here — local governments, provincial government — is to facilitate the redevelopment. That’s the reason why we have put a time limit in — we also recognize that things can change on the ground — and making sure that that’s available for the local government.

I have not come across a mayor or a council that would be content to see a series of run-down buildings in their downtown core and be happy to continue to provide relief if it was detracting from the overall health and well-being of their downtown core.

At the end of the day, what we’ve heard from local governments was that they wanted the flexibility to be able to make decisions based on the needs of their community. That’s why we have this as a permissive tax exemption.

P. Milobar: Speaking of flexibility, as I read this, currently under the Community Charter, if you do a tax exemption area, you have to have a fairly defined purpose and outcome for it. It cannot be business-specific. You can’t just target doctors’ offices, for an example. There has to be a broader geographic area. If you run a paint store and you meet the criteria, you get the tax benefit. If you run a doctor’s office and you meet the criteria, you get a benefit.

They can be used to help redevelop areas into housing. I’m fairly familiar with the ones in Kamloops. When we first brought them in, we had the ability for facade improvements in the downtown core. It was a tight area that has been expanded over time, and what qualifies or doesn’t qualify has changed over time as development ebbs and flows.

You really had to prove to the province — to get those bylaws approved, ultimately, by the provincial government — that there was a very defined, targeted outcome that was desired. It had to be very broad so it wasn’t seen to be targeting any one individual. This seems to be able to have not only property-by-property exemptions, but two properties, side by side, could actually have different rates attached to them, it looks like. It does say that there are various rates in various areas.

Can the minister confirm that if the member next to me and I had properties across the street from each other or backing onto an alley — where one might be on a transit line, and one is on the other side of the street, technically — one could qualify for a totally different rate than the other, and one could just be not qualified at all by the municipality?

[1:50 p.m.]

Hon. S. Robinson: First of all, I need to make sure that the member understands you cannot set the rate property by property. It’s one rate. I think that’s really important to understand. Also, there are some provincial eligibility criteria that must be met in order to make use of this bylaw.

It must have land and improvements in class 5, light industry, or 6, which is business and other; may not be split-classified with any other property class other than class 1, which is residential; may not receive any other exemption from municipal taxation, to be subject to land assessment averaging; must be occupied as of October 31 of the previous tax year; and must have a class 5 or 6 land value that is a minimum of 95 percent of the total class 5 or 6 assessed value, which we canvassed earlier. That makes them eligible to use the bylaw.

Now, the other thing is that while the proposed legislation gives wide discretion to municipalities to determine eligibility and set relief to target certain properties or areas, the relief provided must be for the purposes of relieving the impact of development potential on eligible occupiers. There is a requirement that municipalities must set out the objectives and the policies in relation to the provision of development potential relief in their annual financial plans. So they have to be accountable as well.

Similar to other property tax relief mechanisms that currently exist, like permissive exemptions, municipal councils are expected to set their policies and objectives for the relief and are expected to apply those policies in a fair and just manner. Municipalities must be satisfied that the application of the relief is defensible within the scheme of the legislation, as well as their own objectives and policies. They need to be consistent in how this gets applied.

P. Milobar: Well, the reason I asked the question…. The first part of the Minister’s answer gets a little confusing, then, and moving forward, it could very easily be misinterpreted by municipalities and mayors, councillors and administrators because, under clause 2, it says: “(4) An annual property tax bylaw may specify different percentages under subsection (3) (b) for different areas, properties or kinds of properties.”

For (3), I’ll just read the whole. “(3) An annual property tax bylaw that provides relief under this section (a) must identify the properties for which relief is provided, (b) must specify for each of those properties the percentage of the eligible land, comprising the property, that is to be taxed at the reduced tax rates….”

The very next subsection is (4), which says that there are “different areas, properties or kinds of properties” eligible at the discretion of municipalities.

Is the minister now saying that that is in fact not the case, that a mill rate adjustment on one area of town automatically has to take effect if they choose to do other properties on the opposite side of town? Or can they have a 50 percent mill rate reduction on the east side of town and a 20 percent mill rate reduction on the west side of town?

[1:55 p.m.]

Hon. S. Robinson: First of all, it is one reduced rate. Let’s say, for the ease of example, the decision is a 10 percent reduced rate. As the member used an east side and a west side, I’ll stick with the same analogy.

Let’s say that on the east side of town, there is high development potential. It has been identified as of high development potential, based on decisions that the council has already made in their OCP changes. The council could decide that the reduced rate applies to 50 percent of the land value. On the west side of town, there’s just some medium or moderate redevelopment potential. So it’s the same 10 percent reduced rate, but they’ll only do it on 20 percent of the land value, or 30 percent. That’s what this is.

Recognizing that there are different development potentials will require different reductions. You pick one reduced rate, but it’s a percentage of the land where that reduced rate could be altered — based on the decisions of the council on their OCP changes, typically.

The Chair: I’m going to recognize the member for Vancouver-Kensington.

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

Leave granted.

Introductions by Members

M. Elmore: I’m very pleased and honoured to welcome the grade 11 class from the John Oliver Mini School digital immersion program. It’s the first time they’ve been on the road all together in person. They’re just a great group, very dynamic. It’s a terrific program that they run in Vancouver-Kensington at John Oliver. They’re very active and engaged.

They’ve been here in Victoria overnight and have been busy in making the rounds and visiting different activities and locations. It has been a real pleasure. They are here with teachers Thomas Hoffmann and Irving Lau — great young leaders. I’m so happy they’re here. I’d just ask everybody here to please welcome them and to give them a very warm welcome to our legislative chambers.

Debate Continued

P. Milobar: It sounds like councils would have the discretion to confer more of a discount on taxes to one property owner than the other. I understand it’s the percentage of the land value, but ultimately it’s dollars out of the bank account that a business owner cares about. Their tax bill would be reduced more, if a council deemed it, in one part of the city versus the other.

That’s not unlike the current permissive tax exemptions, where they can set different parameters on different parts of the city. That I understand. For further clarification, though, I get back to the example. We’re back on the east side properties. They’re both slated for high-density development.

They both meet all the criteria, but can the city, through this, decide that one qualifies and that one does not qualify, simply because they’re a block apart?

Hon. S. Robinson: As I said earlier, they would have to justify that distinction. They’d have to have a policy in place that identifies why that’s the case. Typically, we would imagine that one would have a higher development potential than another. That would be an example of why you would have that sort of distinction.

P. Milobar: If they both qualify in that area, can they do, “Well, you qualify for 50 percent of your land value,” but “You qualify for 20 percent of your land value,” so that it’s not all or nothing but that they can actually decide different percentages of land value that they’re going to reduce?

[2:00 p.m.]

Hon. S. Robinson: Yes, they could, as long as they’re consistent with their policies. It has to be grounded and acknowledged about how it is that these different properties are treated differently, and they have to have that shared as part of their own accountability.

P. Milobar: I guess the question to the minister is: accountability to who? I don’t see in here who they would be accountable to. If you go to override an official community plan, there’s a process in place for that. They could confer more density on a property that previously wasn’t slated for that in the OCP, but there’s a process to go through that. You go through a council meeting. You need, I believe, a two-thirds majority vote if you’re amending an OCP, not just a standard majority. There’s a public process, but it’s local. It’s not provincial.

So is the accountability for them picking and choosing the properties strictly within their own community and their voters and landowners? Or is it a provincial override? In other words, is the province having to sign off on every single one of these exemptions that might be granted?

[S. Chandra Herbert in the chair.]

Hon. S. Robinson: Again, this needs to be in the property tax bylaw as well as in their financial plan that goes through local government processes. I’m sure, as the member was mayor, he remembers those meetings well — the various readings that have to be undertaken.

That’s where the accountability lies: with the people that they represent. They have to demonstrate, just like with any other permissive tax, activities that are currently being undertaken. That has to be part of their property tax bylaw, part of their financial plan. That’s what they’re accountable to — the people who vote for them.

P. Milobar: So if I’m hearing correctly, then, the province has no oversight. If a landowner feels that they have been unduly put upon compared to their neighbour, their only appeal process is to appeal back to mayor and council, if they even have an appeal process in place. But there’s no avenue for them to interact with the Municipal Affairs Minister or the Finance Minister to appeal the decision that they may feel is unfairly impacting them and providing a benefit to a competitor right across the street.

Hon. S. Robinson: Again, I just want to remind the member that this is no different than other permissive tax opportunities that currently exist for local governments to use. It is at their discretion. They could choose to not use any of this at all. The landowners then need to take that up with the local government that is making those sorts of choices. This is in the hands of local governments to make choices.

We are giving them a tool to use in order to help ease some of the challenges that businesses and not-for-profits, I believe like in the member’s own community…. I believe I’ve heard from the Chair how challenged some of his constituents have been — and eagerly awaiting the passage of this legislation to urge the city of Vancouver to use this so that they can get the relief that they’ve been seeking for some time.

[2:05 p.m.]

Again, I want to remind the member that there is an avenue with the local government, whether it’s participating in public hearings — around the tax bylaw, around the financial plan — being involved at council meetings, and following through with local governments, who are decision-makers around property tax and who will now have a tool to use to help provide the relief. If there are some concerns with how that is being applied, then the local government is the right place to take those concerns.

P. Milobar: The minister referenced that Vancouver was clamouring, waiting for this to come forward. If memory serves, the minister in her previous role as Municipal Affairs Minister brought in a temporary measure. I believe she was not the Finance Minister yet. I believe she was Municipal Affairs, but I could be corrected. Either way, she was…. I’m 100 percent sure she was a minister. That was supposed to provide temporary relief and temporary tools for municipalities to use until this piece of legislation came forward.

Could the minister share with us what municipalities have used any of those temporary measures that were brought in over the last couple of years?

Hon. S. Robinson: I was Minister of Municipal Affairs back when we brought the interim measure in. We worked as quickly as we could, given the significant pressures that we were hearing, particularly for small businesses and for not-for-profits — particularly in Vancouver, but certainly in my own community of Coquitlam and other communities as well.

We were hearing that there were some significant and sudden changes in the valuation assessments of developable properties. So it was for that purpose that we worked quickly to bring in an interim legislation that we said was not the permanent fix. We knew that it was flawed, but we felt that this was an important step to take, given that there needed to be lots more consultation happening with business, with local governments, with B.C. Assessment.

I know that the member is likely to bring up private members’ bills, and I’m happy to describe how it would not have worked, given the analysis that we did. We looked at every single suggestion that came to us, and we’ve done the analysis. I’d be happy to share it with the member, should he ask the question.

While some municipalities did express interest, and they did look at the interim business property tax relief legislation that we did bring in, we did get some feedback that it was a bit cumbersome and complex to implement on behalf of the local governments. For example, municipalities felt that determining and verifying triple-net leases would be really challenging for them — that they didn’t have the staff ability to do that.

We brought the legislation in, if you recall, in March of 2020 — the very first week of March — and we all know what happened ten days after that. Everybody downed tools, and everybody pivoted to addressing COVID and a COVID response. So it’s in that context that we didn’t see this interim legislation get picked up by anybody. However, we continued to do the work of bringing in a permanent fix, which is the legislation we have before us.

We continued, and I want to give kudos and raise my hands to those that did partner with us: the staff from various municipalities who worked closely with our team, folks from UBCM, from the business community, from the round table who consulted with us to help us identify exactly what we needed to do in order to find the kind of legislation that would provide the much-needed relief. We have heard from our partners that we consulted with that this will certainly help move everyone in the right direction.

P. Milobar: Could the minister then point us to where and what in this bill is substantially different that gives her confidence that this will actually be actioned by local governments, given that the temporary bill…? What in this bill is different than the temporary bill, given that it sounds like not one municipality actioned, for even one property, the temporary legislation?

[2:10 p.m.]

Hon. S. Robinson: There are a couple of things that make this easier for municipal governments. It’s part of a sort of existing framework that they have for imposing tax rates on eligible land. So they already have the tools on how to do that. This authority is an extension of the regular property-tax-setting authority, and the usual requirements for passing a tax rate bylaw apply. That makes it, certainly, familiar to them.

We also have removed what was burdensome, which was the triple-net lease piece, which they said was too hard to check. So we’ve removed that. That’s not a requirement in this legislation.

There was one other thing. Getting additional information from B.C. Assessment to help them make the decision is also different. Those are the three biggest changes that would make it simpler and less cumbersome for local governments to use.

P. Milobar: Again, keeping with what seems to be some contradictory push-and-pull within this piece of legislation, it seems that on the one hand, to this point, the minister has been talking about how this gives municipalities ultimate flexibility, ultimate autonomy.

There’s no appeal process back to the province. It’s strictly to the mayor and council. The mayor and council can choose which properties qualify or not. They can choose what rate of tax applies or not, the percentage of the land value that will be exempted or not, which part of town it is in or not and, even within that same portion of town, if things are different or not. There’s no feedback to the province for the landowners in that area to appeal.

On the one hand, it sounds like the minister is trying to say, “We trust you, municipalities,” and then there are a bunch of clauses that say they don’t. I guess I’m looking for better rationale as to 95 percent of land value needing to be the qualifying mark, instead of letting municipalities decide, given that they’re the ones that have to cover off and shift in the taxes and account for that with their own taxpayers.

There’s no provincial money coming into any of this. Why have they been hamstrung by a ratio that will essentially tell people you either have a derelict building or you don’t qualify?

Hon. S. Robinson: Again, I want to remind the member that this is really about development potential properties. This was what we were trying to target and trying to address. This is what we certainly heard from municipal governments. Trying to identify how you determine development potential is certainly a challenging one. But it’s one where…. Again, I want to thank the public service partners that we had from a number of local governments that worked with our staff to do some analysis about what it should be, what it should look like, to identify what development potential properties are.

It’s not like there is a definition for them somewhere in a B.C. Assessment book anywhere, so trying to really understand and, again, narrow the scope for what properties we’re talking about. That is what local governments were looking for. They wanted to have some sort of working definition.

Properties with development potential have a high land value because they often have a dated or fully depreciated improvement, and most of the value, of course, is in the land. So staff determined, using data analysis in consultation with this core group of municipalities as well as with B.C. Assessment, that a ratio of at least 95 percent would ensure most properties with development potential would be eligible.

[2:15 p.m.]

This was the work of folks on all sides of this equation coming together and making sure that this would work. That’s what these very smart people did, from all of our various component parts, from the province, from local governments, from B.C. Assessment, to try to find exactly how to work with and develop a new tool.

P. Milobar: Well, B.C. Assessment…. The whole reason we’re here is because B.C. Assessment has been assigning development potential for properties for years now. That’s the root of the problem — that B.C. Assessment overlays an official community plan and says that this property with a little, small grocery store on it is not highest and best use, that it needs housing, it needs more commercial space, it’s land heavy, building light.

So they’ve already assessed and increased charge on that. They’ve already determined, by way of their assessments…. And in fact, they’re going to continue to do that. And then we’re going to phone them up, if you’re a municipality with this bill, and say: “Oh, could you come back and reassess it for actual use?” We’re going to ask the same people to come back and reassess it. Those people have already determined development potential properties.

Given that they’ve already identified those, the 95 percent is essentially saying to the small grocer who has had a piece of property — and there’s many of them out there, especially in larger centres — where they ran a small store of some form….

They’ve owned it for 45 or 50 years, and the property all around them has grown in value exponentially. They just want to operate, and they want to be able to pay reasonable taxes. What this bill is telling them is: “Stop taking pride in your building. Let it run down if you want to qualify for the next five years for a tax break.”

Why so little trust in municipalities that you would bind the hands of municipalities to make a judgment based on their own neighbourhoods, their own development, on what they would like to see as storefronts while awaiting development?

Why tie their hands so tightly with a 95 percent threshold, which will greatly reduce the ability for municipalities to try to bring any type of meaningful change in the short term and will lead to a cavalcade of property owners going to B.C. Assessment to appeal their assessment? Not the land value — they’re going to start appealing their improvements, because they need the improvements to plummet in value to qualify.

Why was there not more flexibility given to municipalities? Why is there a lack of trust in municipalities — that on something like this, they don’t know what’s good for them, but on a whole bunch of this other stuff, they do?

Hon. S. Robinson: I want to back up what the member said, because I think he needs to recognize that it’s local governments that make the decisions about where they’re going to be forcing or pushing or urging or encouraging development, and they do that through their OCP change. I know that the member knows that. Local governments make those decisions, and then that is what creates the added value of the land. It’s not like B.C. Assessment, out of nothing, decides to make changes. It’s usually because there’s been an OCP change. That stimulates the change in the land use.

If you are living in a residential area and it continues to be a residential area, then the market value is really about how things are selling in your neighbourhood. But if the local government makes the decision to change the OCP and put higher density, medium density into that neighbourhood, then the land values are going to go up. We know that. We have seen it. We have experienced it. So the local government already starts the process by making that decision.

So the way to recognize that is to have a tool that the local government can use in conjunction with that to ease the pressures in the interim until the redevelopment happens. Again, it’s still in the hands of the local government. The member is somehow challenging that it starts with B.C. Assessment, and it doesn’t.

[2:20 p.m.]

If local governments are choosing to leave things as they are, then they don’t make OCP changes; they leave them as they are, and things continue as they are. This is a tool that allows local governments, at their initiation, when they make an OCP change saying: “We want more density….” That pushes on the land value — not on the building value, on the land value. That allows them to, then, provide some relief while waiting for the redevelopment to happen.

This is what local governments asked for, and this is what we’re delivering here with this legislation.

P. Milobar: I didn’t indicate that B.C. Assessment invented development potential assessments. In fact, I referenced that they overlay an OCP as they do their assessments.

It’s just not something that’s brand-new and difficult, as the minister had suggested in her previous answer. It has been well defined for quite some time how this development potential assessed value comes into play. The minister didn’t come anywhere close to answering the question that was actually asked.

Municipalities have been asking for flexibility and the ability to deal with this. This bill ties their hands by saying: “We don’t trust you to give a tax break to anyone unless the land value is 95 percent of the assessed value.”

If your building is worth 6 percent, you can’t qualify. If the building is worth 7 percent, you can’t qualify. No matter how much the municipality wants to try to help you out, you don’t qualify. You know how you qualify next year? You let your building run down a little bit more, and you appeal it to B.C. Assessment. You hope land value goes up a little bit at the same time. Next thing you know, you’re at 95 percent, and then you can qualify.

By this bill…. The minister doesn’t seem to trust that municipalities reasonably know what is having trouble trying to redevelop and what they would like to see for a streetscape, while properties are going through very complex development processes to get everything in place.

They’ve got to work with the municipality around servicing of the lot to make sure that the water and sewer capacities are in that area. They have to figure out parking. They have to figure out all the engineering. They have to figure out all of the geotechnical work and the subsoils. That is all going to take a year or two, even at the best of times, let alone with the shortage of all the professionals, let alone a shortage in municipal planning departments.

Why has the minister chosen to tie the hands of municipalities and say, “We trust you, except we don’t really trust you to make a decision on behalf of your own town unless it meets this, essentially, 5 percent criteria,” and have a derelict building sitting on a property, instead of a reasonably nice-looking building, that everyone knows is slated for demolition sometime in the next five years?

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

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

Hon. S. Robinson: I suspect the member down the way is going to introduce these lovely students. So I’ll take my seat, if I might, and allow her to introduce the students.

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

Leave granted.

Introductions by Members

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

The members met the grade 11 students. They’re being led by teachers Teresa Laumen and also Pat Lee. Parent Sandra Boehm is here.

Just a terrific group of students who have been here, very dynamic, very energetic, very engaged, really future leaders in our community and in our province. I’m pleased they’re here to be able to hear the deliberations of the municipal affairs statutes — that’s what we’re doing here — and to hear some of that process.

They’re hard at work lobbying their MLA to increase support for the mini school. They want to see a safety crosswalk put in, and they want to see more support for community engagement. So there you go.

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

[2:25 p.m.]

The Chair: Welcome to the students.

Debate Continued

Hon. S. Robinson: Welcome, JO students. It’s lovely to see you here. We’re doing a lovely back-and-forth as we go through a very exciting bill related to property tax in local government.

Members opposite are in the opposition, the King’s loyal opposition. It’s their job to ask questions and make sure that the legislation is good and sound.

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

The member had asked about local governments and why we have drafted this legislation and presented this legislation looking at 95 percent of the value in the land. Perhaps the member wants to talk to a seatmate about what local governments have been asking for, which is exactly this.

They wanted a framework, and they wanted a structure. They asked us very specifically. “Don’t leave it wide open. Give us a framework that we can operate in.” So we sat down with them and their representatives, together, to figure out what would be the right balance.

This is what collaboration looks like when you work with the very order of government that is asking for a tool. You sit down with them, and you co-create a tool that is going to work for them. That’s exactly what we’ve done, and that’s why you see this in this piece of legislation.

P. Milobar: Well, this appears to be structured to work for only the most expensive properties in, frankly, the Vancouver-Surrey area. This doesn’t take into account the very real pressures that would be faced in centres like a Kelowna, a Kamloops, a Prince George, redevelopment areas, a Langley.

Where the building is likely still in reasonable repair, it’s not going to meet the 95 percent threshold, but it’s still going to be a very onerous tax hit to the owner trying to redevelop the property to accomplish the goal. They can’t, by no fault of their own, speed things along any faster than they can. Yet they’re still going to continue to get hammered, because the municipality has no flexibility.

If the goal of this is to take properties that are improvement poor and land rich and get them redeveloped, why does the improvement on the property, which can only be 5 percent of the value — so on a lot of properties, not a very attractive-looking building…? Why does that actually have to be occupied with a tenant that would likely not really want to be located in a property that has now become run-down and derelict, waiting for the inevitable redevelopment to happen?

Hon. S. Robinson: What the member describes is exactly why this is here. Local governments don’t want their streetscapes boarded up while the landowner chooses not to redevelop but gets a tax break. This is about…. You get the tax break if there’s somebody in the property.

Remember, these are the small businesses that were struggling under this burden. That’s who this is for. It’s not for the land developer who might be just sitting on a boarded-up property. We want them to redevelop it.

This works really well for local governments, in terms of making sure that there’s somebody occupying these buildings. You don’t wind up with just boarded buildings all the way down your main street, and these landowners are getting a tax break. That would create the opposite of what we’re trying to do here.

P. Milobar: Well, they would only get the tax break if the local government gave them the tax break. They have zero flexibility because of the 95 percent. They’re forced to try to get people into these properties.

Municipalities, quite easily…. I could see them actually having a criteria, an internal criteria. Are you in the development application process? Are you actively seeking a building permit? Are you engaged with our planning department? If you’re not, you’re probably not going to qualify for the tax break over the next five years, because you’re nowhere near going to actually be up and running with the development.

[2:30 p.m.]

This bill seems to be at cross-purposes. If the stated intent is to help business owners to be able to afford to stay in business, you’re forcing them…. The only way they qualify is to let their physical building run down enough while still trying to stay in business so that they can qualify for a tax break at 95 percent. It does make sense when you overlay it with the “must be occupied,” but the “must be occupied” doesn’t make sense with the 95 percent threshold.

Municipalities surely have more than enough wherewithal within their operations to understand and set their own criteria. They’re going to have to set a whole bunch of other criteria anyways, based on this legislation, to justify who qualifies or doesn’t qualify.

To set a 95 percent ratio of land value versus improvement ensures that just like the temporary measure, no municipality is going to meaningfully be able to engage this to provide what is supposed to be relief for business owners that are feeling unfairly taxed because the tax on their current operation and property they’re operating out of has absolutely nothing to do with what they’re currently doing. It’s all about future development potential.

Mr. Chair, saying all that, I have an amendment ready to go. So I propose to introduce an amendment at this time.

The Chair: Thank you, Member.

I’d ask if we can just stand in recess for a moment so we can distribute the amendment to all the appropriate parties, as is the case, in this House. So we’ll take a short recess to make sure everyone gets a chance to look at the amendment and that it gets to all those that are interested in seeing it.

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

[S. Chandra Herbert in the chair.]

The Chair: Calling the committee back into session, on Municipal Affairs Statutes (Property Taxation) Amendment Act, 2022, Bill 28.

There is a proposed amendment.

P. Milobar: I’m moving an amendment on Bill 28, intituled Municipal Affairs Statutes (Property Taxation) Amendment Act, 2022. Essentially, the change is to strike out the provision of the calculation that 0.95 percent of the value has to be land to qualify for a municipality to make a judgment or not.

[CLAUSE 2, by deleting the text shown as struck out and adding the underlined text as shown:

(5) Land is eligible for relief under this section if

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

(b) the property that includes the land meets all of the following criteria:

(i) the property includes an improvement that

(A) is classified as property class 5 or 6, and

(B) was in use on October 31 of the taxation year immediately preceding the taxation year to which the annual property tax bylaw relates;

(ii) the property has a land-value ratio equal to or greater than 0.95, determined by taking the quotient of

(A) the assessed value of the land that is classified as property class 5 or 6, and

(B) the assessed value of the land and improvements that are classified as property class 5 or 6;

(iiiii) the property is not disqualified under subsection (6).]

On the amendment.

P. Milobar: With your indulgence, I am able to speak to the amendment now. This amendment is really quite straightforward. It’s really, as I’ve said in a couple of previous questions and in diving into this bill: you’re either in or you’re out. Municipalities are able to control development in their communities, are able to make decisions based on what their local taxpayers would like to see, what their local businesses would like to see, and how they would like to guide development in their communities.

Throughout this bill, and in questioning with the minister, she’s confirmed that municipalities would have the flexibility to make determinations on their own whether or not properties would qualify — make determinations that would be appealed strictly to them. If a landowner didn’t agree with the decision of the municipality, it does not go back to the province for sign-off. It does not go back to the province as an appeal mechanism. It does not go back to the province in any way, shape or form.

It’s up to a local government to decide if there will be a benefit to a business owner and a landowner or not, how much that will be, what part of town it would qualify in or not. If it’s in a high-density area, a planned high-density area, it can qualify for more than in a medium-zoned area. All of those provisions are flexible for the municipality.

The problem is that the clause I’m trying to remove would bind the hands of municipalities, which would say that if a property has 6 percent of its value in the building, it doesn’t matter that the municipality wants to help out that building owner and the business. They’re not allowed to. They’re suddenly not adult enough in the room to be able to make their own decision for their municipality.

They will be making these decisions, as the minister has pointed out and confirmed, based on having to shift property taxes around. So they’re not going to do this lightly, because if they reduce down and confer a benefit on certain properties, unless they reduce their overall budget by the same amount, they’re going to have to shift those dollars to either homeowners, which is never a very popular thing to do, or to other commercial properties or to heavy industry. They’re going to have to actually take responsibility for their actions.

The clause that we’re trying to remove does not allow them to have that responsibility. It says: “No, municipality. We think you kind of have the right intentions, but we’re going to make this threshold so high that the only businesses that will qualify are ones that are essentially derelict. And oh, by the way, if they’re derelict, you still have to find somebody to actually operate it as a business, or they won’t qualify, because it has to be actually operating as a business.” The minister is not sure where I get that, but it’s right in the bill.

[2:40 p.m.]

This is the problem. The 5 percent threshold will work very well if you’re a small operation on a chunk of land that is zoned for super-high density and is very expensive. But it doesn’t help the business owner that’s on a piece of land that is zoned mid to just about high density, who is still facing the same pressures of a jacked-up assessed value but happens to take pride in their business, has a well-maintained building, has a good clientele coming and going — because, let’s remember, B.C. Assessment also assesses you based on your business and how your business is doing — and you suddenly don’t qualify.

Your landlord doesn’t qualify, which means you, as the small business owner, have to pay 100 percent of the tax even though the property right next door that has been allowed to run down to get under the 5 percent suddenly gets a tax break. There’s nothing the municipality can do about that — nothing. But with this amendment, they would have something they could do about it.

Again, let’s treat municipalities like the responsible elected officials they are, in charge of local taxation issues. That’s what the whole municipal campaigns are about right now. So to say to them, “We’ve brought this bill in — our temporary bill not one of you wanted to action. But we still know what’s best for you, so we’re going to bring in another bill where the only substantive change to the bill that didn’t get changed was not this,” simply isn’t good enough.

I hope the minister can see the spirit of why we’ve made this amendment. This is about not trying to chip away at the other clauses. This is about trying to give autonomy to municipalities so that their mayors, their councils, their chief financial officers and their CAOs, along with their public and the community within that area, can actually make informed decisions on how they want to guide the direction of development in their communities.

There’s not a 95 percent threshold for property tax exemptions for other forms of developments for municipalities. There doesn’t need to be with this. The minister, coming off a failed bill that not one municipality has used, I would think would want to try to make it as accessible to municipalities as possible, because the worst outcome would be that it’s actually getting used and providing tax relief to businesses.

But simply having a piece of legislation on the books where the minister can then try to walk away from the problem of skyrocketing business taxes on development properties doesn’t actually help the business owner if it’s not an accessible piece of legislation. It doesn’t help the municipalities if it’s not an accessible piece of legislation.

By removing the 95 percent and letting municipalities act like the adults in the room in their own council chambers, we’re letting municipal councils, municipalities, towns, residents take control of their own redevelopment in their own towns to try to spur on growth that they need, to try to bring actual housing and actual new mixed-use commercial developments into their areas that they are so desperately wanting to see happen, without overly penalizing the existing small business operator on that property who right now is facing no relief.

Under this bill, if it stands without this amendment, they would continue to see no relief moving forward, as past history has proven by the temporary bill that not one municipality actioned even once for one piece of property.

So I hope people will support this bill. It keeps the spirit and the intent of the bill. It just provides municipalities the ability to actually control their own affairs, as they’ve been duly elected to. In fact, they’ll be duly elected in eight or nine days from now to do the exact same thing moving forward.

Hon. S. Robinson: To the J.O. students, the member across the way decided that perhaps he had an idea to change this bill, and so now we’re debating his suggestion.

[2:45 p.m.]

Frankly, I’m a little bit confused because earlier, as we discussed an earlier clause, the member was suggesting that there needed to be an appeal process, that local governments couldn’t be trusted. Now he’s speaking out of the other side of his mouth, suggesting that we absolutely have to treat them as the adults that they are. So he has to pick a lane. That would be great, but he seems to be contradicting himself.

There was something else that the member said that I thought was really quite interesting. He was talking about allowing buildings to be derelict and then you can’t rent them out, that that would be bad, and then they couldn’t get the tax relief.

However, if you don’t let your building get derelict and you rent it out, then you often don’t pay the taxes, because, as a result of a triple-net lease, it’s the tenant that pays the taxes. It really is folly to allow your property to become derelict so that you can no longer rent it out, and then you have to take on the burden of the property tax. It’s a little bit inaccurate to suggest that that’s how these landowners operate.

I also want to remind the member that there is a revitalization tax exemption that local governments…. It’s another tool that they could use, should they deem it appropriate. There are a number of tools that local governments can use. But given that the member has taken it upon himself to suggest that we eliminate this 95 percent requirement, I want to know which local governments he consulted with that would like this tool, because we spent a considerable amount of time consulting with local governments, and they were very clear with us that they wanted this framework.

We’ve done the analysis with them about what that would mean in their communities, and they were the ones who really appreciated having this in the legislation. I’ll read again into the record what we heard from UBCM, because they are the voice representing local governments, who said that “this change enables local governments to provide tax relief for commercial properties that have seen dramatic increases in the assessed value of their land. Local governments were consulted as a part of the process of developing this legislation,” and they “welcome the actions that we’re taking to address this issue.”

So I would like to hear from the member who proposed this amendment which local governments he consulted with in order to bring this forward.

The Chair: We are still on the proposed amendment, just to be clear for everyone.

D. Ashton: I would like to say ditto for ten minutes in a row, saying what my peer from Kamloops north has talked about. With all due respect, I came out of a small business — a small business that operated in quite a few towns in British Columbia, in retail.

Back in those days, I knew the intricacies of what it takes to have a business. Went through many ups and downturns that seem to continue on an all-too-frequent basis. Used to be seven years. We’ve come through one of the best times ever in the last 12 years, where we’ve had tremendous opportunities in this province.

But right now we’re probably at the top of the bell curve, or on one side of it. Hopefully, we’re still on the uphill side, but I don’t think we are. I think we’re about to start sliding down on the back side of it. Development is a great way to revitalize your community and your downtown core. Myself, as the minister and as my peer from Kamloops north…. We’ve come out of local government, and that’s what you want to do. That downtown core is the heartbeat of your community.

The opportunities that redevelopment gives to the community keeps accentuating how important downtowns are, but when you start bringing in taxation as a municipality, on air and the possibilities that may or may not happen on there, and leave that up to the individual businesses, whether it’s a triple-net lease or whether it’s a gross lease, the taxes still have to be paid.

The taxes in a triple-net lease are being paid by the tenants. The taxes in a gross lease are being paid by the tenants. If the tenant is the landlord and is looking forward to something that’s going to happen in the future in the area, all of a sudden, he’s stuck with these incredible tax increases that this high-density development takes. I really think that by the amendment suggesting that the 95 percent….

[2:50 p.m.]

I take a look at the buildings that (1) we leased and (2) we owned. A 5 percent value in a building, especially in recent construction costs in the valuation of a building, whether it’s a middle-aged or older building, is very, very difficult for anybody to reach that load, to say that a building’s only worth that much money.

I would hope that there might be some flexibility — to the minister and the ministry staff — to really take a look at this. Because I think what we’re trying to do…. My hat’s off to government saying, “Look, we are trying to extend something that may help facilitate those tenants, those landlords, those owners that are caught up in this taxation block that is now popular in some areas in the community and in the province where they are taxing ‘air.’” Here’s an opportunity. But the parameters that appear to be set on this….

Again, I’m going and sitting here listening to the minister and listening to my peer from North Kamloops. I’m looking at it as a “previous owner” and a “previous renter” who paid the taxes. It goes both ways. I’m thinking: “How would this fit?”

To be frank, my family owns an old, old building, built in 1904, that is fully occupied, with four tenants. It is old. It could sure use development. The family bought it in 1992 to redevelop, and my dad passed away, and we put a hold on things and have limped it along up until this point. But I can tell you right now that the valuation of that building is a heck of a lot more than 5 percent.

Yes, the municipality where it’s at would love to have it redeveloped. No, I’m not being charged airspace on it at this point in time. But if it were there, I would have a hard time trying to get B.C. Assessment down to a 5 percent value on the gross amount of assessment of the entity of the land and the buildings. I just don’t see it as possible. It’s been mentioned that if it were a derelict building, it doesn’t qualify, because it’s going to have to be occupied. I just don’t see what kind of business would be in a building where the percentage is 5 percent.

Don’t forget that B.C. Assessment also takes a look at income. They not only take a look at the gross value of the property, but they take a look at the income. I would really just ask that the minister think about this and really consider this, along with her great staff from the ministry, to take a look and make this so that it’s a little bit easier to fit into what most places are asking for at this point in time.

Also, as a mayor, I can remember when the multiplier effect…. In the community that I was fortunate enough to represent — Penticton — there was talk, in a downturn, about taking that multiplier charged to commercial and industrial and adjusting that. Well, the only place that the money came from was from residential, because commercial properties don’t vote. Industrial properties don’t vote. But residential properties do. The cries of anguish that came from the municipality and the citizens…. Council backed away from it.

I would just really like to ask if the minister — and those that she is working with in the ministry and those that she has talked about, that she has consulted — would take another look at this and make this more applicable for all the communities that are affected at this point in time directly and the tenants/owners and any other communities that may be affected by this within the five-year parameter that is being talked about. Let’s have another good, sober second look at this and try and make it so that it is more applicable to more.

Let’s keep those downtown cores as the heart of our communities. Let’s promote the expansion. Let’s promote the redevelopment so that we keep the shine on that downtown core entity that we are all so proud of in our communities.

[2:55 p.m.]

The Chair: We are still on the proposed amendment, so we’re not into question back-and-forth, as in committee stage, because we’re discussing the amendment. Are there other speakers to the amendment before we…?

B. Banman: We’ve heard the Premier talk about how we all need to be in a collaborative effort, that in times like now, both sides of the House need to work together.

I talked about this the other day. I also was the mayor of the largest city, by land, in British Columbia. A lot of people don’t know that Abbotsford is actually the largest city by land in British Columbia. Yet in spite of that, the developable land that’s left is actually pretty much reduced, and we all agree that going up versus out is better.

We want to densify. We want to see multi-use. But here are a few things that need to be considered. Not all cities have the Lower Mainland super-high skyrise densification that’s possible. Many of these cities are going to be mid-rise. They’ll be five, maybe six storeys high. They’ll be wood construction versus, perhaps, concrete. They’re not going to be skyscrapers, but those still drastically affect the value of the land.

In addition to that, a city comes in with its OCP, and they do neighborhood plans. What happens is that you say: “You know what? This is what’s going to be allowed in this particular neighborhood.” The day after that happens, it drastically affects the value of the land. But in many cities, what you now need to do is actually get all of the pieces of property together. You need to assemble those pieces of property together to actually build a viable project. So what then ends up happening is that it can take literally years to assemble all these.

Now what’s left are small businesses. In all due respect to the minister, the tone deafness of, “Just let the small business pay for it. Just let the legion pay for it. Just let the social groups that happen to be there pay for it. Let the places like the Foundry pay the excess taxes,” is what we’re trying to point out. What I hear from the minister is, rather than sit back and say: “Maybe this side of the house has an idea that we hadn’t considered….” I talked about how the devil is always in the details. Well, here’s a devil one right now.

Charity groups that happen to be, are now going to be charged for the airspace. The landowner isn’t going to pay that. That’s going to fall on the backs of the charity. Not all charities have permissive tax exemptions from cities. Small businesses. We’ve already heard of small businesses in Vancouver that were forced to close their doors because they could not afford the air tax. That’s kind of what has triggered all of this.

What we’re saying is: allow the flexibility of the town council to, on a case-by-case basis, figure out whether or not this particular piece of property qualifies. By using 95 percent, it’s far too restrictive. It’s way too restrictive. What I feel is happening is yet once again, the other side of the House…. The government just decided that: “No, our legislation is perfect. How could anything possibly be wrong with it?”

[3:00 p.m.]

The other side of the House, even though we were all elected to represent the people of this province…. “The opposition can’t possibly have a good idea. They can’t possibly be right. We’re going to go ahead with this anyway, as is.”

When I used to sit around city council, part of what could happen is that you could have a position, but you were supposed to sit there with an open mind and open heart. My colleague…. Well, you can see him nodding. He will back me up on that. There were often times that I had a position — that was allowed — yet I would hear one new piece of evidence, and it totally changed my mind.

In this particular case, I don’t know why this government would insist on punishing a charity by getting them stuck in a catch-22 based on some made-up percentage. It makes zero sense.

I know the minister used to sit on city council and came from municipal politics. For the life of me, I do not understand why the minister is digging the heels in so strongly on this when damages to small business, to charities, to user groups such as things like the Foundry that traditionally are looking for exactly these kinds of properties because they can get an inexpensive lease….

Well, the affordability of that lease vanishes instantly if they are at 6 percent versus 5, and there is absolutely nothing council can do to change that. We have basically tied council’s hands behind their back. That’s not the intent of this legislation.

I commend government for bringing this legislation forward, but for the life of me, I hope the government sits here with an open mind and open heart and realizes that this particular detail, the devil in this particular piece, is out of sync with what the overreaching goal of the legislation is. I would hope that after five years, this government would go and say: “You know what? There’s no shame in the fact that we didn’t get it 100 percent right.” As a matter of fact, it doesn’t show weakness. It shows great strength, and it shows compassion, and it shows cooperation.

We hear the words of cooperation from government. Well, now is your chance to prove it. Now is your chance to say: “You know what? We think that this actually has some merit. We think that we can actually trust the elected officials in their city, that know it best, to make an informed, accurate decision on what works best in their particular situation, in their locale.”

I am pleading with the minister to pay attention to this side of the House. I am pleading with the minister to show that she actually does believe in cooperation, that she believes that everyone in this house was elected to represent all of their constituents. The failure to listen….

What’s going to happen, as government decides to do this, will speak volumes as to whether they believe in the legislation that they put on this floor or not. This particular area is such a small, insignificant little bit that can make such a huge difference in a charity’s bottom line or a small business that’s just clinging on.

[3:05 p.m.]

The minister said, rightfully so: “Hey, what’s the big deal? It’s going to get passed along.” Well, if that happens to be the dance class that she wants to take her children to, which can no longer afford to pay those taxes and has to shut their doors, maybe the minister might have a different point of view. And that’s what we’re trying to point out here.

This amendment…. All it does is eliminate the land-to-value ratio and put it in the hands of local elected governments, who know best what is required by their city. This one-size-fits-all does not work, and I’ve given some examples as to why. It may not be a 30-storey skyscraper in Abbotsford, for instance. It may only be four or five storeys, but it’s still going to be mixed-use. This allows that tool to be used by local governments on a case-by-case basis. They’re going to do what’s right by their citizens. They’re going to do what’s right on a case-by-case basis.

There is no need for this particular percentage to be in the legislation. It actually goes against the heart of what the legislation is. I think that for once, the minister should listen intently to what this side of the House is trying to say, because it is actually helping the legislation, not hurting it. Furthermore, it’s not like the taxation is going to come out of the provincial coffers. It’s going to come out of local government’s coffers, and they will decide what’s best and how to do that correctly, based on each individual situation that comes before them.

Hon. S. Robinson: Well, we had two rousing speeches from members opposite — absolutely rousing speeches.

Interjections.

Hon. S. Robinson: It can go back and forth.

What I find interesting…. I was listening very carefully, and I want to thank the members for getting on their feet. But there was talk of cooperation. That’s exactly what we did with this bill, to craft this bill.

We cooperated with local governments. They asked for this framework. They asked for 95 percent. I haven’t heard from any member over there who they consulted with in suggesting that this be taken out. Who did the member from Abbotsford talk with about whether or not this would work for them? I’m going to guess he didn’t speak with anybody.

We did the work of cooperating with those who are going to be most impacted. We spoke with businesses. We spoke with the UBCM. We heard from very specific local governments who worked with us, who came to the table and cooperated with government to say: “This is what we need.” They said: “We want a framework. We want you to give us a guideline, a framework for how to make these decisions.”

As a responsive government, we said: “Okay. What would it look like?” So we got to work. That’s what we’ve been doing over these last 18 months: working with those who are most impacted.

The member’s right. We didn’t consult with the folks on the other side. We didn’t. We focused on those who needed the guidelines for implementing this permissive bylaw. Let me tell the members opposite what would happen if we adopted their amendment, which they consulted with no one on: it will not get picked up. They said to us clearly: “We want a framework.”

So what did we do? We put together a framework. Then we met with them again, and we modelled the framework: “How would this work in your community? What would it look like? We’ve pulled up the number of properties. Would this work?” We tweaked it. We went back and forth until they felt like this was a framework that would work for them. That’s what working in cooperation means: working with the people that are most impacted. So we did that.

What’s the member from Abbotsford talking about? He’s talking about working cooperatively with them — members opposite — who consulted with no one. Well, I hope that the members opposite will support the bill as is, without the amendment, because that is what we heard from local governments.

[3:10 p.m.]

I’ll read into the record, in case the member wasn’t here, what we heard from UBCM, as a representative of local governments. I know the member was a mayor and is very familiar with the role that the UBCM plays.

This is what the UBCM had to say about this bill: “The legislation…addresses a concern that was raised by UBCM’s members. This change enables local governments to provide tax relief for commercial properties that have seen dramatic increases in the assessed value of their land. Local governments were consulted by government as a part of the process of developing this legislation….”

They welcome the province’s action to address the issue. I think we should be listening to local governments. They are happy with this piece of legislation, and I look forward to all members of this House supporting it, without amendment.

T. Shypitka: I take honour in speaking to this amendment here to strike out the provision of the 95 percent threshold. We’re having some very spirited debate here, and that’s a good thing, in the hopes of collaboration. If it is such a unanimous decision by municipalities to hold to that 95 percent, then the flexibility shouldn’t be an issue, as they will all stick to the 95 percent.

I was a business owner for a long, long time, and I can’t imagine the layering of taxes that I would have encountered if I were still in business today. The cost of living is going up, with high fuel prices. We’ve seen taxation like never before from this government in the last five years, quite honestly, and now the taxing of airspace and the best usable space.

This Bill 28 is a good bill. We agree that the tools to split-class and split-assess the value of the land is a good thing. It was a bill that was brought forward about five times by a member on this side. So we all agree that way. You know, the devil’s in the details. It’s the tools that we use that will really utilize and bring the best value to this bill for those businesses that are suffering right now.

The 95 percent land value requirement is a bit of a…. I see some inconsistencies with it. Land values in the Lower Mainland are extremely high. Some of them are the highest in the world right now, whereas, in the rural areas where I live, in Cranbrook, and in other areas like Kelowna, are not as high.

We heard the other day, in debate, that a local restaurant, a White Spot somewhere down in Vancouver sold for a quarter of a billion dollars — $250 million. That’s incredible. There is a high land value. I’m sure it’s not all based on the improvements on that land. I’m sure the deep fryers and deep freezes inside the White Spot restaurants aren’t what’s making that $250 million. It’s all the land value. That doesn’t transcend right across the province to every corner. The land values become increasingly lower, which makes those thresholds harder and harder to achieve.

I sat on city council for a few years. One of the initiatives that we brought forward was a downtown revitalization incentive, which meant that we would forgive some taxes for businesses that would spend money to beautify — put money into — their buildings to improve the downtown core, to revitalize it. Much to our pleasure, a lot of building operators did that. They spent hundreds of thousands of dollars. They put in new facades on the front, they put in new, energy-efficient windows, and they really dressed it up in the town’s downtown core. Cranbrook is the beneficiary of that.

This threshold may impede those types of incentives. Trying to reach the 95 percent threshold should be allowed, for municipalities to gauge the way they see their downtown or their commercial areas being done. Without that flexibility — with it being hard-wired at 95 percent, when land values in places like Cranbrook, or wherever in rural B.C. you are, are a lot lower — it’s very hard to reach that 95 percent threshold of land value versus improvements. So it does not incentivize businesses to make those improvements on their lands and/or on their buildings.

[3:15 p.m.]

I sat in debate yesterday, and all I heard, over and over again, was this chant: “Local government knows best. Put it in the hands of local government. We’re supportive of local government.” For the most part of this bill, that’s what it does — except for this piece of legislation or part of this bill that hard-wires 95 percent. There’s no flexibility, no room. If a business is teetering on the edge and is close to 95 percent, nothing doing.

Local government, all of a sudden, doesn’t know best, and it’s provincial government that knows best. That’s what we’re trying to trying to amend here, to give local government that flexibility so they can customize their own approach to how local businesses will function and who gets relief.

The Minister of State for Trade is here in the chambers. Yesterday his quote was: “The government is coming to the rescue for local businesses.” Well, I think, quite honestly, local government doesn’t want the Big Brother of provincial government coming to the rescue. They want to rescue themselves. They want to do it. They want to customize their own approach to how municipalities run.

So I’m in total support of this amendment. I think we need the flexibility. I think local governments do know best. I think we should be putting it back in the hands of those municipalities and those chambers and councils that operate them.

B. Stewart: I stand today to speak in favour of the amendment. I just couldn’t help but think about the comments that the minister just finished sharing with us here in the House. I think it’s great that the ministry did a consultation in terms of trying to find out what that threshold was.

I guess the question I’d ask the minister is…. UBCM is essentially an organization that represents municipalities. It doesn’t represent, so much, the communities. It doesn’t represent the business interest of the people that are in those communities.

[J. Tegart in the chair.]

So I guess I value what UBCM does and represents, but it’s the municipalities that are the ones that they represent. And in the municipalities — when you say that you’ve consulted with them, Minister — my question to you is: is it actually the people that are affected by this?

The split assessment impacts the people that happen to rent a business or that maybe own a building. The fact is that the surrounding property around them has risen in value because, of course, there are always changes to the OCP and those types of things, those issues that drive property values up — the shortage of housing and the fact that communities….

Like anything in the Lower Mainland, for the most part, but even in our area, in the central Okanagan, we’re faced with a land shortage. We’ve got a massive amount of land that appears to be undeveloped, but it’s in the ALR. We have the lake, we have the mountains, and then we have what land is there. So what happens is that because of that shortage of land, prices….

People move in, and as we’ve seen in many communities, especially communities that have desirable housing investments…. We’ve seen large investments come into the marketplace that have driven values up without regard to how much a business can actually afford to operate.

Minister, I think that the consultation you’ve done is flawed. I think that it’s flawed because the fact is that when you’re talking to the municipalities, who in that group…? How would you know, from your past experience, about what the value of what cash flow means to a business that all of a sudden is seeing assessments skyrocket? Because through no benefit…. Nobody is doing a test on their business — their business’s ability to pay those increased assessed values.

[3:20 p.m.]

The 95 percent, in your particular case…. I want to use a simple example. Take a business that happens to, on the appearance, look very successful. It maybe is very successful, as the member for Penticton pointed out. They own different buildings. They lease buildings, gross, triple-net — all of those different combinations of how one can essentially operate a business. But at the end of the day, the municipality is not looking at their cash flow or the profitability in doing this.

That’s what the business community has been screaming out: that they basically can’t afford the increased assessments. It’s through no fault of their own. Essentially, it’s other factors within the municipality. What I would argue, in this particular case, is why the level of consultation that we have currently is lopsided. It’s because the municipalities — I don’t know if it’s the people in council, the bureaucracy or UBCM — are well qualified in what they do, but I wouldn’t say they’re well qualified to run the business and know what the impact of the increased assessments is going to be.

Now, Minister, I will tell you that at a similar point in time, back in 2010, when I was the Minister of Muni­cipal Affairs, we had the very same thing happen in Richmond. We had a broad-based change in the use of lands after the Richmond Oval was built. We had all of these businesses — autobody shops, small businesses that were down around the Fraser River — impacted severely by the fact that Richmond had decided, in its wisdom, that it wanted to up-zone all this area.

There was no ability for these businesses to seek relief in getting realistic values. All of a sudden, overnight, their property values had shot up because of that. We were trying to work through that with the city of Richmond. They’re not the only ones that have ever done that, but I use that as a primary example. Although people were elected to improve the community and build on those things — maybe it was their decision — I would say that one of the things they wanted to do was to drive those businesses out of those areas.

I mean, I know that there’s a lot that has gone on since then. The River Rock Casino is there, and we’ve got the night market and other things. At the end of the day, it drove those businesses to have to find other locations to build their body shops and the other things — auto suppliers, all those types of people that are in what was considered at one time to be just industrial lands. Of course, it immediately impacted it.

I believe that the amendment that has been proposed, Minister, by the member for Kamloops–North Thompson is reasonable. It does put the decision and the ability for business owners to not have to deal with the provincial government, but being able to deal with their locally elected officials about making the case as to what has happened in this situation.

I might have a successful business that has a building that’s worth $1 million on it, but if the land values have, all of a sudden, gone to $40 million, as my colleague from Kootenay East just mentioned here — I’d forgotten about it: the original White Spot location in British Columbia — who would have thought that a place on West Georgia would be worth that much money? I’m sure that they were pleased by that, but it wasn’t the deep fryers and everything else that added to that.

I just think that this is a practical way of doing it. If there were more flexibility to local government, it would have allowed them to deal with situations, municipality by municipality. I continue to stand in favour of this amendment. I look forward to when we get a chance to…. Hopefully, Minister, we can find a way to convince you that there’s more than one way to skin a cat on this one.

Hon. S. Robinson: Madam Chair, I’ll be brief. Again, it was interesting listening to the member for Kelowna West, who was the minister in 2010, as he pointed out. I believe they did do something for Richmond — it was around SkyTrain, if I recall — but it’s interesting that they didn’t do anything that was broader.

To be aware of the issue and not do anything broader is somewhat disappointing, given that here we are 12 years later and that we have local governments that have been asking for a tool. Again, I’m going to remind the member that we worked with local governments — they told us they wanted this — because it’s local governments that have to adopt the bylaw. They have to adopt the bylaw. Without this, they will not adopt the bylaw.

[3:25 p.m.]

What would be the point, then? It would be moot. All of our time spent, all of the consulting that we have done with local governments, all the consulting we have done with business — and they are pleased to see this come forward — will have been for naught by taking out the one piece, the one piece, that they asked us to put in the legislation, which was: “Give us a framework for making the decision.”

We modelled this for them. We walked them through it in their communities. We looked at the communities where this was the greatest pressure, and we engaged them. We modelled with them how this would apply. We want this to work for local business, we want this to work for the not-for-profits, and we want this to work for local governments, but this is the piece that makes it work. If local governments see it without this piece, they’re going to say: “We don’t want to touch it.” Then where would we be?

Again, I want to say to the members — I know that there are more who are going to speak to support it: think very carefully, because everything is in Hansard, and I will be happy to let your communities know that you want to take it out. The very thing that your local governments have been asking for, you want to take it out, because you want to make political hay in some way.

Fine. You get to do that, but it’s not based on the real work that we have done in cooperation, in collaboration, with business and with local governments. That’s what staff have been doing for the last 18 months: to try to find a solution that works for everyone. That’s what we have before us.

R. Merrifield: “Consulted with no one.” That is patently untrue. I just made a list, just for myself, of those that I have spoken to since this bill hit the floor. I’ve spoken to three chambers of commerce or boards of trade, four city mayors, three city managers and at least 20 businesses. That’s in four days.

I am but one of 27 of us that all have networks, connections. I take offence to what the minister just insinuated and threatened. I am connected to my community. I am on text message and in constant communication with not only my mayors and city managers but also the businesses who have taken it on the chin and begged for this split assessment legislation.

I am very passionate about making this work, which is why I am standing up in support of this amendment. We need to make sure it works. I wish the minister to actually be reminded of who supported the last failed attempt at this split assessment. As I was trying to google the full letter from UBCM, I found the one from February 28, which was actually in support of the last attempt at legislation on a temporary measure. News flash: it didn’t work. It didn’t work.

This bill cannot have it both ways. We cannot be both downloading the responsibility onto our municipalities and not giving them the flexibility to make it work. Municipalities need both authority and responsibility. If they’re asking…. I don’t know which ones you’ve consulted with. I actually don’t know that, because it has not transparently disclosed.

I would love to see the list. I’d love to see if the mayors and the city managers that I’ve spoken to are in favour of this. News flash: I know that some of the city managers and some of the mayors have no intention of using it, because it’s not effective for their purposes. You can’t have it both ways.

[3:30 p.m.]

The other quote that I’ll use are the very specific local governments that have been actually addressed. This is too high of a threshold. Let me just give some examples. If we have a situation where the difference between the future zoning and the current is not a high-rise, is not a 23- to 46-storey tower — which, news flash again, is not a form of affordable housing, is not what we want, necessarily, to see built everywhere — this is not going to work. That land value will not be only 5 percent of the actual value.

Here’s another news flash: developments take time — too much time, I would argue. In Vancouver, they can take up to ten years. That is ten years of a building that you’re asking to depreciate and literally go into disrepair. It has to be occupied, which means you need to have a business in these buildings. I’m not sure what buildings are going to be able to actually take on that amount of tax. What ends up happening is that you’re going to have boarded-up houses and businesses.

Another thing that happens is that markets shift. While a development may be planned for a particular area, or the city has given zoning in a particular area of plans for housing or for office buildings to take place, then it sits and pauses.

I’ll remind this House of the last recession that we had, which we may be going into again, where we had an absolute freeze on new developments — maybe not in certain locations, like the city of Vancouver. If the city of Vancouver is the city that you sat down with and went through all of the different aspects of how this works in the framework, well, that’s not the rest of British Columbia.

The other thing that happens is that cities pre-zone. Cities have official community plans that actually predict 20 years into the future. What happens to those small ma-and-pa operations, the one- and two-storey units that are being occupied currently? They go up, and the property taxes are excruciatingly high. But 20 years? Are they going to suffer through 20 years of high property taxes? No, they won’t. Are they going to hit that only 5 percent of 100 percent? Well, no. The 95 percent land value requirement is just too high of a threshold.

I won’t single them out, but I can think of three non-profit agencies that currently operate in these one- and two-storey buildings on land that is zoned for much higher densities. They’re bearing the burden right now, unnecessarily, and split zones could have a very positive effect.

Am I desperate? Yes. Do they deserve relief? Absolutely and unequivocally. Does the fact that we amend this to take out that one aspect of the 95 percent ratio make this unusable? I would argue that it makes it more usable. Can you still offer that as a suggestion from municipalities? Absolutely.

This amendment would eliminate that land value ratio. That would actually make it more usable and give both authority and responsibility, rather than just the responsibility, to our municipalities.

Hon. S. Robinson: Again, I listened as the member was speaking, and she clearly doesn’t understand what we’re trying to do here.

The local governments asked us, very specifically, for a framework like this so that they could apply it and understand the framework. Again, as I said earlier in my remarks, if the member had been listening, she would know that we consulted with most of Metro Vancouver, as well as Victoria and Kelowna, on this framework. That is exactly who we consulted with, because that’s where the bulk of these sorts of very specific properties are.

[3:35 p.m.]

Again, we worked collaboratively and in cooperation with the local governments that have been asking for a tool that would work for them. If the member was listening…. I will say it again. Most of Metro Vancouver, Victoria and Kelowna. It’s my third or fourth time saying this into the record so that the member doesn’t have to go through Hansard.

Again, as I’ve said, this needs to stay in the legislation. Otherwise, local governments won’t use it, and that would be really unfortunate. It’s for that reason that we are not going to adopt and accept this amendment. I know that the member is going to continue to put it forward.

Interjection.

Hon. S. Robinson: Again, they keep talking about…. The member is heckling about collaboration with them. But really, the people that we need to collaborate with are local governments, because this is a tool for them to use. I didn’t hear any of the members offer who they collaborated with, in terms of making sure that they understood, in a meaningful way, with the staff who would be responsible for implementing it.

It’s for that reason that we did a very fulsome consultation with the business community, making sure that they understood what we were trying to do here, with the local governments. It has taken us some time to get here, but I’m thrilled that we got here. I hope that we can continue to move forward with this bill this afternoon.

P. Milobar: There’s a famous expression about someone protesting a little too much. That’s what it seems like with the minister and the various rebuttals. Frankly, I’m a little surprised how agitated the minister seems to be about a fairly straightforward amendment.

Let’s be clear. We asked about the consultation in the briefing. The minister’s staff told us: “It’s confidential.” Well, the minister wasn’t part of that briefing, but the minister’s staff made it very clear. There was a specific question about consultation. Finance Ministry staff jumped in and said: “It’s confidential.”

Now, the interesting thing is that this bill…. By the looks of the clock, we’ll still be dealing with this bill when we come back. It won’t be finished today. Why that’s interesting is because next week we’re away for Thanksgiving. So I look forward to the minister — if these are not confidential consultations — providing us, as an opposition, the notes and the dates and the people involved in the consultation over the next week so we can review that. So when we come back to finish up with this bill….

Now, I know the government likes to charge people the $10 fee. We’ll gladly pay that, if the minister would like that fee as well to try to circumvent FOI. But my bet is that coming out of this afternoon, when we try following up with the minister’s office, the response is going to be: “You’ll have to FOI that consultation.” I would be glad for the minister to prove me wrong and provide it for us, wilfully, Tuesday or Wednesday next week, after the long weekend. It would give us the time to review it.

Here’s the other thing. The minister asked: who did we consult with on this bill? Well, I started off the questions pointing out that a bill that impacts municipalities was brought to this House in the middle of municipal elections. I guess I could have…. I don’t know.

There was a mayors debate last night and the night before in Kamloops. I could have submitted questions to the mayors debate and asked all the candidates, with an open mayors chair in Kamloops, what they think of this bill — if they’ve read it, if they know what clauses it contains. I could have done that across the province, but let’s be realistic. That’s not going to happen, and rightfully so. They’re busy in their own re-election campaigns.

So the minister can tout that all she likes. I have yet to have been to a UBCM — after going to, well, 17 in person — to see local governments say: “Oh no, government. Oh no, provincial government. Please don’t give us more flexibility. Please don’t give us more autonomy. We want you to bind our hands a little bit. Please, please. We won’t be able to contain ourselves. We won’t be able to control ourselves.”

[3:40 p.m.]

Removing the 95 percent, like this amendment does, does not weaken the overall ability of a municipality to use this legislation. It gives them more flexibility to use this legislation. The minister can say that this was insistent on being in. When I asked the minister what significant changes were different between this bill and her failed temporary bill, which not one municipality for one property used in the province, she didn’t say 95 percent was the make or break. She said it was triple-net leases. That was the only significant change she said she made — triple-net leases, not the 95 percent.

This amendment does not touch the changes to triple-net leases that supposedly were the reason that no municipalities used this minister’s failed attempt at previous legislation around this. That is why we’re saying, simply put: let’s give municipalities more autonomy, more ability to control what happens in their own municipalities, not less.

Let’s have it line up with some of the other provisions in this that do give them that flexibility, instead of clinging to something that is: “Provincial government knows best. We don’t trust you to make a responsible decision, so we’re going to tighten this down so much that it could only possibly apply to a couple of properties here and there.”

That’s not right. It’s not fair to the surrounding property owners that should have the ability to properly lobby their own municipal government to make sure that they’re treated just as fairly as the surrounding properties around them. But this bill, as it stands, does not allow for that. The bill, as we’re proposing to amend it, would.

That is why we brought forward this amendment. That’s why we’ve encouraged people to support the amendment so that municipalities can actually be treated like the adults they are, like the responsible decision-makers they are and actually control the taxation system within their own authority without the government coming in, patting them on the head and telling them they know best and that they’re going to protect them from themselves with land values.

Hon. S. Robinson: Well, first of all, I want to correct the member. The interim tax exemption that we brought forward did have a land value ratio in it. He did ask me what was new and different from that. That’s why I didn’t list it.

But I also want to point out that in the Vancouver Sun, October 4, Katie DeRosa interviewed Mayor Kennedy Stewart, and he said in a statement that he’s pleased with the proposed legislation — this legislation that’s before the House — which gives municipalities flexibility to provide tax relief on a case-by-case basis.

He also said that depending on when the legislation receives royal assent, it could be implemented as early as 2023 to provide immediate relief to eligible properties. This is why we brought it in as quickly as we did, early in the legislative session, so that it could be ready for councils to consider, going forward. So again, this is about providing the tax relief that businesses and not-for-profits have been asking for so that it’s ready in time for the next tax year. That’s what we committed to doing, and that’s why it’s before the House at this time.

The Chair: Seeing no further speakers to the amendment. The amendment is before the House to amend clause 2.

Amendment negatived on division.

P. Milobar: I’m just wondering if the minister can provide some clarity around the bylaw that needs to be passed for municipalities to approve this and move forward.

So many bylaws need to be approved, sent forward and approved by the province before they can really be fully under effect. Is there any provincial oversight to the municipal bylaws and sign-offs, or is a municipal council free to make their bylaws and proceed without waiting for ministerial approval from the province?

[3:45 p.m.]

Hon. S. Robinson: This is a tax bylaw, so it doesn’t require any approval of any kind. This is a standard, I guess, operating procedure for local governments as it currently exists.

P. Milobar: I guess the only thing we trust municipalities with is coming up with their own ratio for land values versus building values.

I want to drill in a little bit into the concept around the five years. Why five years? If it is five years, again…. If you trust municipalities, why is there even the ability for them to seek an extension? Why is it not just capped completely — or no provision whatsoever?

Hon. S. Robinson: Like all other parts of this bill, we reviewed it very carefully with local governments to get their input, and we came up with these criteria collaboratively. I want to reiterate that again for the House. It was agreed that having this for five years was the balance between when a property is identified for redevelopment and when that development process begins. It was felt that a five-year window and a five-year framework would be about right.

Again, this was done in collaboration with local governments — that this decision was made that five years was the right time frame for this.

P. Milobar: Is the minister prepared to provide all of the notes and dates and outcomes of the consultation and who was actually consulted while we are away on the break so we can evaluate those over the next week?

Hon. S. Robinson: We’d be very happy to provide dates and who attended which meetings. If the member is looking for specific notes and details that were shared by others, then the member would have to go through FOI.

P. Milobar: This comes to the root of the problem. The minister can say that there was consultation and there was discussion and caps were discussed, but we don’t know. We don’t actually know, and we don’t have the time to get a hold of (a) mayors and councillors that may not be running again and (b) with an election in nine days.

The language the minister has used leads one to believe that it was everyone sitting around the table singing “Kumbayah” about 95 percent and other clauses, but without providing the notes and what was actually shared and what the thoughts were about that, all we know is that they were talked to. I haven’t heard that they were in full agreement yet. That’s where we’re looking for that, and that is the problem with this whole timeline.

We are faced with debating this bill and questioning this bill only a couple of days after it being introduced in the middle of a municipal election, because frankly, the government doesn’t have its act together, and we have nothing else on the legislative calendar to debate. So that’s a problem. That’s a problem for democracy. It’s a problem for transparency, and this government has a long track record of having a problem with transparency.

[3:50 p.m.]

The minister’s answer actually lines up with what her staff told me in the briefing earlier this week, when we asked about the consultation and they said it was confidential. The minister has just confirmed that. Is the minister prepared to change that decision and provide us with the feedback of those consultations, of what was actually said?

In fact, we’d go so far as to…. The minister could remove who said what and provide us with the notes of what was actually said. That’s a more important part than who said what.

Hon. S. Robinson: As I’ve said, our staff worked very closely with a number of staff complements from around the province under the understanding that these were confidential consultations. If the member wants to get the information, he’d have to go through an FOI process, which is there so that we can continue to work with these staff complements in a confidential manner. The member is welcome to do that. This work has been going on for 18 months. If they were interested, they’ve had 18 months to ask for those details.

We’re happy to share, with the member, whom we consulted with and the dates of the consultations. That, I think, I’ve shared here, in this chamber. It was most of Metro Vancouver; it was Victoria and Kelowna. Those were the communities that we engaged with. He’s more than welcome to reach out to them, to their staffs, to find out what they want to share. They can certainly share that. They’re free to share that. We’re not free to share what they shared with our staff.

If the member is interested in that, there is a process for accessing that information. That side has been in government. It has to go through a process to make sure that it protects the identities of people. That work would need to happen. The member is welcome to do that.

What I can say, again, to the member: I’ve read into the record that in Vancouver, where 50 percent of the properties most impacted by this are, the current mayor of Vancouver is eager to have this legislation available. He said that should this pass quickly, he would make a point of implementing it. Now, the member is right. There is a local election right in front of us. Delaying the work that we’re doing here would have potentially delayed getting this passed in time for them to have a bylaw passed by May.

We committed that we would introduce this in the House this fall. This is the fall. It’s not as ideal, perhaps, as the member would like, but this is the situation that we’re in. I would hope that all members of the House would support this legislation so that local governments can do their work and deliver this tax relief to those businesses and not-for-profits that are most impacted.

P. Milobar: Madam Chair, I’m sure you won’t be surprised to know just how shocked I am. Knock me over with a feather. That a former NDP MP, who left the federal realm to become the mayor of Vancouver, would, in the middle of a hard-fought campaign — I don’t know which way it’s going to break in Vancouver; I don’t think anyone does — endorse or speak favourably of an NDP Finance Minister’s bill — wow, that is shocking to me. I would have never expected that to come forward.

The point is that we asked staff, and we were told, “Confidential,” which seemed like a bit of a surprise to the minister when I asked that earlier today. I asked the minister about NDAs. Yes, those were signed, but people are free to talk, now that the legislation is tabled. It seems the person that’s not allowed to talk is the government. That’s the problem. As the minister full well knows, this legislation will be long passed by the time any FOI gets filed, let alone actioned, especially when you get the inevitable requests for delays.

It’s disappointing, given how the minister repeatedly, especially during the amendment, tried chastising this side for not consulting enough or not talking enough to mayors. On two days’ notice, in the middle of a municipal campaign, somehow we didn’t do the same two days’ worth of consultation as her 18 months’ worth of consultation. She refuses to back it up with anything other than saying: “Well, I met with Victoria. We met with some of the Metro mayors. Oh, and the NDP mayor of Vancouver likes this.” It’s shocking.

[3:55 p.m.]

Again, we’re in a situation where we’re being told to trust: “Trust us. We know best. Trust us. We are doing exactly what the consultation said needs to be done.”

We have contradictory language in this, on how much the government is willing to trust another level of government: “You can have four years. You don’t need to come back to the province to have your bylaw approved. Because it’s a local taxation bylaw, we trust you for that. We trust you on setting the rate you’re going to have.”

“We trust you for picking the piece of property that may or may not qualify. We trust you that you’re going to treat people fairly and not give an extra benefit to a property on one side of the street versus the other side of the street.”

“We don’t trust you setting the 95 percent threshold to being something more reasonable for your community. Oh, by the way, we don’t trust you to do it for more than five years. But if you want to, and you come, cap in hand, back to the province, the province may or may not allow it to be extended.”

Will the Minister release, at least, the notes of the consultation around the 95 percent threshold and the five-year cap?

Hon. S. Robinson: As I’ve said, for details of the actual conversations and the notes that were taken, the member would have to FOI that. I’m happy to provide dates, and I’m happy to provide which communities we met with as part of the consultations. Again, as to details, because we did say that the conversations were confidential, that would have to go through proper FOI.

P. Milobar: Well, at the risk of enduring a bit more admonishment from the Minister that we didn’t consult enough over the last two days, I’m going to bring forward an amendment. It’s on subsection (6). I’ll hand that to staff, and I’ll await further instruction.

The Chair: We’ll take a brief recess while we circulate the amendment.

The House recessed from 3:57 p.m. to 4 p.m.

[J. Tegart in the chair.]

P. Milobar: I’m moving the amendment on Bill 28, intituled Municipal Affairs Statutes (Property Taxation) Amendment Act, 2022.

[CLAUSE 2, by deleting the text shown as struck out and adding the underlined text as shown:

(6) A property is disqualified from relief under this section if

(a) relief under this section was provided for the property for a taxation year that is more than 4 or a prescribed number of years, whichever is greater, preceding the taxation year to which the annual property tax bylaw relates, or

(b) the property includes any of the following:

(a)(i) land or improvements classified as property class 2, 3, 4, 7, 8 or 9;

(b)(ii) land or improvements that are exempt under this Act or another enactment from taxation under section 197 (1) (a) of this Act, other than under a prescribed exemption;

(c)(iii) land classified as property class 5 or 6 on which tax is imposed in accordance with section 198 of this Act;

(d)(iv) property designated under section 20.2 [ski hill property] or 20.5 [restricted-use property] of the Assessment Act;

(e)(v) prescribed property.]

On the amendment.

P. Milobar: This is essentially, again, not hindering municipalities. We likely would have tried to align it more with property tax exemptions that are enabled currently in terms of a ten-year cap on those, but we opted to make it as simple as possible and just remove it completely.

Frankly, our batting average, given that we’re heading into the post-season, is not very high on these amendments passing. We really do want to speak to it, though. We’re hoping that the government will, one of these days, support one of our amendments. They are crucial. They are important to making legislation be a bit better and a bit more workable.

This, again, goes back to the premise that municipalities do know how to control their actions in a way that does not need the province to meddle in. I get that the inner workings of intergovernmental back-and-forth can sometimes be difficult for entrenched views to take.

Certainly, in my time in local government, I did not see irresponsible activity happening. I have not seen it around the province, in terms of how councils, with all great seriousness, address things like property tax shifts.

Ultimately, that’s what this bill is. This bill is creating another way for municipalities to address a taxation situation, with a very specific class of property, by enabling them to shift some of that tax burden over to other ratepayers within their jurisdiction.

Again, in Kamloops, we’ve done this over the years with heavy industry. It’s a very small rate class in terms of the number of people in that rate class, the number of businesses, but they pay a substantial portion of the property taxes in the city of Kamloops. We did that. We have to do it in very public, open ways. During budget meetings, you had to explain and show where the rate classes were getting shifted to and who was going to pick up that extra cost on those rate classes.

This is no different. This is the same. This is saying to municipalities: “We trust you to go ahead and start to take control of your own situation. We’re giving you the tools of an added rate class, essentially, for property taxation.” Something that’s long overdue. Something that’s needed. Everyone agrees about that.

There’s a lot of agreement on this bill. What there hasn’t been agreement on is the 95 percent, the autonomy of the municipalities to make that determination for themselves, and the four years.

On the overall scheme, if we’re to take the government at their word that they truly do trust municipalities…. With all these other clauses, which we support, that give that autonomy to local government….

The government should be willing to support this amendment, because that’s what this amendment does. Just like the previous amendment, it provides greater flexibility to municipalities, not less. They still have the ability to say no. They have the ability to say: “We’re not doing that at all.” They have the ability to structure what happens after year 4, or not, and year 5, or not.

[4:05 p.m.]

Most property tax exemptions in targeted areas right now, the first five years…. They were typically structured that way, and then they start adding 20 percent a year for the next five years to get the ratepayers slowly back on to the full property tax rate.

It was the municipalities that started doing that. They don’t have to do that. They could give you 100 percent for the whole ten years. They’re responsible. They found creative ways to try to make it palatable to existing ratepayers in the community to understand the broader goal that was trying to be achieved, while still trying to lessen the burden to existing ratepayers. That’s what this amendment does. This amendment gives that type of flexibility to a municipality to better control their own destiny.

Now, it’s interesting. Since the government has defeated our previous amendment, which would have the 95 percent…. This would be, actually, only qualifying very few properties in the first place. Very few are going to qualify because of the 95 percent staying in there.

One would hope that the government could see their way to support this amendment to at least signal to municipalities that they truly do trust them to do the right thing on behalf of their constituents, on behalf of their property tax ratepayers, and to bring forward rules and timelines around these developments without having to come back, as I say, on bended knee, to the province and say: “Oh, by the way, we’ve hit a bit of a hiccup in our development permitting department, so we need an extra two years. Please let us have an extra two years.”

Or you know what? “The rest of the infrastructure upgrades of water and sewer that need to happen…. We can’t afford to do that for another couple of years. We’ve had to change the planning, because a different priority came up. We had to go to a higher, more critical area for repair and maintenance or expansion. We’ve worked with the landowner and the business owner, but we need another two years. Please, Minister, can we have that extra two years?”

These are all real situations that happen on a regular basis in municipalities. They are constantly re-evaluating their water, their sewer and their road infrastructure.

Those are, for the most part, pressurized lines. I hate to break it to people, but you don’t push sewage along a flat stretch of land without some sort of pump pressurizing that line. You get breaks and leaks where you weren’t expecting it, a road degradation quicker than you thought. So suddenly you’re fixing the pipes under at the same time. You’re going in and fixing a roadbed that you weren’t planning on doing. That happens all the time at the best of planned-out cities. It’s a constant game of Whac-a-Mole.

Removing this five years takes away one more time that the municipalities have to come back and justify their responsible actions for growth to the province and to get them to agree that, in fact, that mayor and council are acting responsibly.

That’s really what this is about. This is about empowering municipalities and saying: “You know what? We do trust you. We do trust that you’re responsible. We do trust that if you’re going to extend it past five years, it’s for good reason. You don’t need to come back and beg.” They don’t have to put the stress on the business operator or the landowner — that there might be a massive tax bill coming their way for the next few years, no fault of their own, while they await the approval anointed by the minister of the day. It’s just simply a way to take some of that away.

This does not, again, change the premise — in fact, it strengthens the premise of the bill — that municipalities should have some freedom and some flexibility and be treated like a responsible level of government. It doesn’t dilute that in the least. It actually strengthens it.

I hope the minister can see that. I hope the government, by the time we’re done this debate, can find their way to support it. It will make life easier for municipalities, for the business operator and for the landowner as they hit those unforeseen delays, which might happen, that are 100 percent legitimate. Then they know that they can control the yes or the no. They’re not waiting for a yes or a no that may or may not come from the provincial government.

Hon. S. Robinson: I can appreciate the member’s attempt to make a contribution to this bill.

[4:10 p.m.]

However, I was actually just asking staff if they could eyeball the number of meetings that they’ve had. It’s more than 20 meetings with local governments since, I guess, February — it’s a significant undertaking — and about half a dozen or so meetings with businesses to make sure that we were finding a way to work with all parties involved, because it does have impact on various different groups.

The challenge I have with this particular amendment is that…. A number of concerns. It is designed to be a transition for a property, so having it as open, with no limit, doesn’t imply transitional. There’s supposed to be an incentive. The whole reason for a local government changing the OCP is to incentivize the redevelopment. If you don’t have a transition which has a beginning and an end, if you don’t have that built in, then you actually remove the incentive.

The more important piece of that is that the local governments asked us specifically to make it time-limited, because they didn’t want to be lobbied. They didn’t want to have that role in this. And they asked us, again, to provide a framework and to create it as a transition, which is why, as part of the consultation, everyone agreed that five years would work. However, they did recognize that…. For these local governments, they were saying, “We should get through the redevelopment process in five years,” but sometimes you can’t.

An example that I thought of was in 2008, when we had a significant slowdown, and redevelopments took a lot longer. They took a lot longer in Coquitlam. We saw the impact. The member for Penticton is recognizing that that happened in his community as well.

We recognize that stuff happens that is through no fault of the local government, through no fault of the business or the landowner, and that sometimes stuff gets stuck in the cogs of redevelopment, like 2008. So we wanted to make sure that there was a place where local governments can say: “You know what? Things have slowed down. Redevelopment that we thought would be started hasn’t started. So we’d like another five years.”

Again, they asked us to craft this legislation with a framework around it so that they weren’t the ones being lobbied by individual businesses from different neighbourhoods, that this is the province working together with local governments to give them the framework that allows them to deliver for the folks in their community, that has enough flexibility for them to make the decisions that they need to make but also enough protections and enough support that they don’t feel like they get whipsawed or drawn back and forth.

This was the work that we did in collaboration with local governments. Folks seemed very happy with it, and that’s why it’s before the House right now.

D. Ashton: Minister, thank you very much for your comments. We, too, as I was nodding, in Penticton faced….

In 2008, when I got elected, development didn’t slow down. It stopped, stopped dead, and not one, not two years, not three years, but in four years, it started to turn around again. The city, unfortunately, and council were faced with making some very drastic changes not only to the city of Penticton but also at the regional district. To this day, that’s one of my largest cobblestones and cornerstones that I carry around my neck for what had to transpire there. Nobody wants to go through that.

As I had said earlier, normal business cycles are seven-plus years, give or take. Well, we’ve come through a dramatic 12-year expansion, with very cheap money, with things going ahead, with housing prices and commercial buildings and business revenues just going to the moon. But it is changing, and I would suggest that instead of having municipalities come back….

[S. Chandra Herbert in the chair.]

I say this with respect. I know that the minister has talked about what she has heard from municipalities, but I’m also thinking out loud.

[4:15 p.m.]

This isn’t just about municipalities. This is about the people that own the buildings. This is about the people that are looking into the future to do a redevelopment on a particular piece of land that would qualify underneath this.

I would just ask the minister if she would even think about the possibility of extending it — it’s four, plus the year that it comes in, so we round it off at five — up to a maximum of ten years. What that does is that it allows these people to plan ahead if there is a substantial downturn, or any form of downturn, for the next period of time — up to, say, seven-ish years. It allows for incidences….

We hear, on a continual basis, that it can take three to five years just to get a building permit in the municipality of Vancouver. It would give the opportunity so that municipalities didn’t have to come back through the government and get legislation changed. It would be there, up to ten years. They may not want to use it; they don’t have to use it. They, too, may say to themselves: “Here is a period of time.” But it allows them a little bit of flexibility.

I would think that what we want to do with our partners in the governance of this incredible province, whether it’s regional districts, municipalities, provincial government — and the input from the feds, on a time-to-time basis…. I would like to be able to work with them totally.

Again I say, respectfully, that I’ve heard the number of consultations that took place. I would really like to see — hopefully, we’ll get it — who the consultations were done with and how many times. Was it three or four communities that were talked to five or six times? I don’t know that, but I would ask that ministry staff maybe take it back and that the minister would think about giving a little bit of extra time for municipalities to work with in these uncertain times that we are assured to be seeing over the next brief period of time.

Thank you very much, Mr. Chair. To the minister, again, and to her ministry staff, thank you for your inputs today.

Hon. S. Robinson: I’ve listened to what the member was saying, and I’ve read into the record that over 20 meetings have already happened with local governments. What he’s suggesting is taking it back and delaying moving this forward. That’s what it would mean: probably not reintroducing it till the spring, and then it would be too late to bring it in. So I heard his appeal, but it also would mean that another year would go by, and the businesses that he’s talking about, and the not-for-profits, would still struggle under a significant burden.

Having said that, I want to remind the member that local governments asked for a framework. They wanted it time-limited as well. They understood that this is about incentivizing redevelopment as an important part of revitalizing a community. That’s why they make OCP changes: to revitalize the community. That’s why, you know, it is time-limited: because an increased tax burden helps move things along.

The other thing I want to point out is that should something happen like in 2008, then there is an opportunity for the local government to reach out to the minister and just say: “We need an extension.” They’d have to make a case, for sure, but I can’t imagine any ministers not supporting that if they can make a good case for it.

It’s not like it’s a real barrier. Again, it’s just about that they asked us for a framework because they didn’t want to get lobbied. They want to stimulate redevelopment; they don’t want to stop it. It’s just trying to find the balance between incentivizing redevelopment as well as preventing the lobbying that they expressed some concern about.

This was the work that ministry staff undertook with local government staff. These were the conversations we’ve had with UBCM, as well as with businesses, to try to find the balance that everyone was looking for. Business is happy with it; local governments are happy with it. The mayor of Vancouver, where 50 percent of the properties where we’re seeing this are, is happy with it. Other local governments say that they’d like to work with it.

[4:20 p.m.]

So again, the people who seem most unhappy with it right now, I think, are the opposition. I’m not quite sure I can appreciate it in the same way that the members opposite seem to, but the folks who have been asking for this are all quite pleased.

Again, they look forward to seeing this passed through the House so that local governments will have the tool. They can pass a bylaw by the deadline, and they can help the small businesses, the mom-and-pop shops that the member talks about, the not-for-profits that have been struggling, so that they can help deliver some of the relief that they’ve been asking for.

B. Banman: I do appreciate the opportunity to speak to this amendment. My colleague would like to clarify one of the things that he said, which was in regards to consultation. What he meant was with ministerial staff, not necessarily the cities themselves.

As the minister has said, consultation was done. I, as my other colleague, find it a little concerning that those consultations aren’t open and transparent. But what do you expect from the government that’s been voted as the most secretive in all of Canada? I’m not surprised that those comments have not been made available to the opposition so that we could have a look to see what people actually said or didn’t say.

That being said, one would think that the ministry has, and the government has, better things to do with its time than to consider whether or not they should give an extension to the five-year limit. It puzzles me as to…. I’ve heard time and time again how taxed for time and overworked staff are, and I take government at its word for that. But why they would want to add on to their burden of having to deal with an extension doesn’t make much sense to me.

When one considers that it now takes longer to get the approval process in place than it does to actually build the building, when one considers how long it takes to get all of the necessary engineering and geotechnical and building designs and go through a city hall on this, five years seems like a long time, but in fact, it is not.

There are going to be many of these, as I mentioned before — charities, such as the Foundry, or dance clubs or small businesses — that are now going to be left wondering whether or not they’re going to get an extension on the exemption. It would be much easier and much better for them to just find out from local government.

This is a decision that local government is well within their ability to make — whether to grant an extension or not. I’d think that it is oversight on behalf of the provincial government to grant extension on something that really is a municipal matter. The municipalities have…. This would be a great tool to have in their toolbox, and they deserve more flexibility than what has been put forward. This amendment helps deal with that.

For the life of me, I don’t understand why this five-year limit is in here with such oversight on behalf of the provincial government. It just seems like overkill to me. It just seems like taking a sledgehammer when really all that’s required is something a little sharper, like a thumbtack. It just doesn’t make any sense. It is an unnecessary burden on provincial staff. It is an unnecessary roadblock with regards to municipal governments and something that they’re well able to deal with.

Yet once again we will see whether or not government wants to collaborate with this side of the House, whether or not they wish to choose to listen to the concerns of two former mayors that have both expressed concerns.

[4:25 p.m.]

I have a hunch where I think this is going to go, but that doesn’t mean that it is necessarily wise or prudent. This is a very simple amendment. Yet once again the Minister seems to be unable to take a look at or even understand what it is that this side of the House is bringing up. She’s even said as much.

I would hope that the Minister and staff reconsider, take a look at this and vote in favour of this particular amendment. It is really just very small housekeeping that I think enhances this particular legislation, the bill that is before this House. It provides municipalities the flexibility and gives them one more tool that they may or may not choose to use.

I just think that it is, in fact, almost heavy-handed for a municipality to then come to government with their begging bowl, so to speak, and say: “Please extend on this piece of property.” I don’t know that there is any tool that requires the provincial government to respond to them in a timely manner.

I would encourage government to rethink this one particular area and to vote in favor of the amendment.

Hon. S. Robinson: Once again, I appreciate the member taking to the floor. But again, we consulted extensively with local government staff. We’ve heard from some local government leaders about how to best deliver this. Local governments did ask us for framework and to time-limit it, so we are responding to their requests, and that’s what’s in the legislation.

The member hasn’t been a mayor for some time. I think it was 2011, maybe a little after — ‘18? Things certainly have changed, and that’s why we’re working with current staff complements at various local governments who are dealing with this significant pressure. They have shared with us what their concerns were around the interim measure that we brought forward back in March of 2020. They did ask very specifically for framework, which is what we’re delivering.

They are happy with this legislation as it is, and so we will not be supporting the amendment because it doesn’t deal with the local governments who we have been collaborating with on this important piece of legislation.

L. Doerkson: I want to add a few comments to this as well, only because we’ve heard throughout the day that local governments are the decision-makers and that we’re trying to create a framework to allow them to operate within that structure. I can appreciate all of that.

The other thing that’s been mentioned is the shock that we’re speaking against the bill, and that’s certainly not the case. I think we’re largely in favour of it, but what we’re hoping to change are some of those barriers that I think are being put in, certainly, by this five-year time limit. We feel that it’s actually too restrictive.

I would encourage the minister and the ministry to consider the fact that we’re actually trying to improve the bill by giving a little more flexibility to our communities. Certainly, I’ve heard on a number of occasions this afternoon that the communities and the municipalities are in favour of this. However, I have talked to a couple of people that do have some concerns about, particularly, the amendments that have come forth this afternoon.

So again, I want to encourage the minister to have a second thought about this five-year cap. I would encourage people to vote in favour of this amendment.

[4:30 p.m.]

P. Milobar: I’ll just say a few comments in closing out the amendment. The minister talks of the consultation and things of that nature and how their municipalities are in favour of this — how it stands, not amended. The problem is that we…. Because we’re unable to get access to what the government was offering up, what those discussions entail, because of NDAs, because of the refusal by the minister to provide, without us having to go to FOI, information, there’s a lot of ambiguity in some of that, because we don’t know what the alternatives were.

So municipalities might have agreed to this, because it was this or a much worse alternative, but we won’t know that. Again, I don’t know of many mayors and councillors in this province, over the last 20 years, that I’ve interacted with that would say they want more government control over their operations. What we tried with the previous amendment and what we’re trying with this amendment is to give them that autonomy. That is all it is.

As I outlined to the minister, and as the minister has indicated, caps need to be in place, but five years is not realistic. It’s not even in line with what happens with current property tax exemptions when you’re trying to do development areas. Those are capped at ten years. In fact, I think those you can even extend to 20, if need be, if memory serves correctly. I don’t know that for sure, but I know that ten years is a cap. So that’s what this is trying to do. This is trying to give that flexibility.

Since the ministry and the minister didn’t bring forward language that aligned with existing tax exemptions, we felt it was most prudent to highlight it and try to remove it completely. That is the spirit of this. As my colleague just said, it’s not because we’re opposed to the concept of this. We agree. In fact, that’s why we had maximum flexibility in our private member’s bill. This is about trying to add to that flexibility, not take away from it.

This amendment would actually provide more flexibility and more autonomy to local governments, especially in the face of uncertain times and especially in the face of the fact that we’re coming into brand-new councils across this province. If you look at the sheer number of non-incumbents running, its massive this time. So there’s a guarantee of a shift — a change in government. That’s going to take time. It’s going to start chewing up the clock. That is what this amendment tries to do.

Hopefully, the government can see it for what it is — that it’s not meant to be problematic. It’s not meant to try to weaken and dilute this bill. It is meant to actually support and strengthen local governments to be able to have autonomy to do their job in the best interests of their local taxpayers.

Hon. S. Robinson: Again, I just want to let the member know…. I know that he’s the critic, and he’s been the critic for a couple of years, so he certainly had a couple of years to engage with local governments to find out what the status was of this work that we’ve been undertaking. We’ve been very transparent that we were undertaking this work. There have been questions in this House asked about this status. I have shared that, and it is here before us.

Again, I want to point out, and I want to remind the member, that what we heard from local governments…. This was also public. I was actually just looking to see if I could find certainly the newspaper articles — I wasn’t able to find them — where local governments were concerned about the interim tax measure that we brought, that it didn’t have enough structure to it. So this is us responding to the structure.

Again, this is us responding to what we heard from local governments, which local governments had made public, and that’s why it is in here. That’s why we won’t be supporting the amendment that the member has made, because the local governments asked us to bring this in as part of this bill.

Amendment negatived on division.

[4:35 p.m.]

P. Milobar: Well, the minister just alluded that, potentially, I wasn’t being effective enough as a critic over the last two years because I had plenty of opportunity to consult with municipalities about what they were saying in relation to the development of this bill.

Is the minister now saying that those communities were not actually under an NDA over the last several months that they were working with the minister and they could have spoken freely about the development of this legislation?

Hon. S. Robinson: What they could have said was that they were working in partnership with us — they were certainly free to do that — and that they were happy working with us, that they were bringing forward their ideas. They were certainly welcome to talk about the fact that they were participating with us on developing this work. They were certainly able to do that. The member could have asked: “Are you pleased with the direction it’s going? Is it going to work for you?” That information, certainly, they were able to speak to.

The specifics? No. That was under an NDA. But in terms of how they were participating, whether or not they were participating, that was certainly available.

P. Milobar: So to be clear, we should have been able to understand what was being discussed, where they may have concerns or no concerns by simply asking them what was already known — that they were in consultations. But they can’t tell me what they’re talking about. They can’t tell me what they wish was in it, because it has already potentially been discounted by government — and why. They can’t tell me what government is offering up and where it goes or doesn’t go.

Somehow we, as opposition, have been derelict in our duties by not doing that over the last few years because everyone that we could have asked any questions about has been under an NDA, and the minister refuses to release any of the information that would actually help shine a light on any of that discussion. That’s where we’re at with this debate, with this secretive government. Suddenly, opposition isn’t doing their job, because we haven’t forced people to break NDAs that they signed with the government.

So note taken. We’ll have to put a little more pressure, I guess, moving forward — maybe get them to sign some other NDA with us — that we won’t disclose that they disclosed their NDA with the minister. That’s how ridiculous this has gotten with this government and their NDAs.

Can the minister…? The minister has spoken to the fact that the government, if municipalities ask, can extend this for more than five years. They just need to ask, provide a compelling case, and it’ll be approved. Can the minister point me, in the bill, to the language that enables the minister to do that? When I read this bill, in section 2(5), it says:

“Land is eligible for relief under this section if (a) the land is classified as property class 5 or 6, and (b) the property that includes the land meets all of the following criteria: (i) the property includes an improvement that (A) is classified as property class 5 or 6, and (B) was in use on October 31 of the taxation year immediately preceding the taxation year to which the annual property tax bylaw relates; (ii) the property has a land-value ratio equal to or greater than 0.95, determined by taking the quotient of (A) the assessed value of the land that is classified as property class 5 or 6, and (B) the assessed value of the land and improvements that are classified as property class 5 or 6; (iii) the property is not disqualified under subsection (6).”

So you have to meet all of that. Let’s go to subsection (6), because there’s no “may” or “as long as you come close to meeting it.” It’s that you have to meet all of that. Subsection (6): “A property is disqualified from relief under this section if…relief under this section was provided for the property for a taxation year that is more than 4 or a prescribed number of years, whichever is greater, preceding the taxation year to which the annual property tax bylaw relates.”

Now, I’m assuming that’s where the override might be. But this seems that you have to set that ahead of time, not after, because there’d be no certainty that you would qualify. So is this the section that actually provides for the override, for the minister? And where exactly does it say that they’re the ones that actually override, not a municipality?

[4:40 p.m.]

Hon. S. Robinson: Again, I want to remind the member that when the B.C. Liberals were on this side, whenever they were writing legislation and doing it in consultation with anybody, everybody signed an NDA. That’s a standard practice that has been going on for eons. So to suggest that somehow our government operates any differently than when people on that side were here is not accurate. It’s always been thus.

I want to point out that it’s in the language. The legal writers say that in all of those sections where it says “or a prescribed number of years” is the indication that under regulation, there is the opportunity to extend, if that is what is needed to happen.

P. Milobar: For certainty, does the prescribed number of years have to be stated at the onset of the approval or at the end of the five years?

Hon. S. Robinson: It can happen at any point.

P. Milobar: Thank you for that. Where in the bill then does it stipulate that it’s actually the ministry that provides the approval for the prescribed number of years and not the municipality?

Hon. S. Robinson: It’s in subsection 8. So it’s subsection 198.1(8), for anyone following closely at home, where it says: “The Lieutenant Governor in Council may make regulations as follows: (a) prescribing a number of years for the purposes of subsection (6) (a).”

P. Milobar: Thanks for that.

The minister has repeatedly mentioned today that Vancouver…. She’s quoted Mayor Stewart several times as being happy with this, and that’s important. I would argue that it’s important for the Mayor of Vancouver — regardless of who the mayor is, moving forward — because, according to the minister, they have half of all the properties that will be impacted. So it makes sense that whoever the mayor is, you’d want them onside with this.

By stating “half of all properties,” the minister must know how many properties in B.C. would actually qualify for the way that this bill is written. How many is that?

Hon. S. Robinson: I have those. I had a feeling that the member would ask the question, so my capable staff here came prepared. B.C. Assessment estimates that there are about 6,000 commercial properties with development potential in the province right now. As I had mentioned before, about half of them are located in the city of Vancouver.

P. Milobar: So there are around 3,000 properties that could qualify in Vancouver alone, 6,000 throughout the province. That is based on the 95 percent of land value taken into account.

Hon. S. Robinson: That’s correct.

P. Milobar: Given that size of a number, it’s a much…. I’m going to admit it. That’s a much larger number than I would have thought, and that’s with a very restrictive 95 percent.

Can the minister explain how, the feeling, this legislation, which will apply to those 6,000 properties, will be enacted and used with any heft to it, or numbers, considering the failed previous bill wasn’t used once for one property and would have accommodated many more properties than 6,000 across this province and probably actually qualified a lot more municipalities to try to enact something?

[4:45 p.m.]

Hon. S. Robinson: Again, we moved quickly when we brought in the interim tax relief bill and recognized that more work needed to be done. So we undertook that work, and we engaged with the municipalities specifically that were asking for this tool, because we knew that we needed it to work for them, which is why we worked very closely with them.

Staff estimate that about 80 to 85 percent of these properties, of the 6,000, would be in the Lower Mainland, and if you include Victoria and Kelowna, that’s about 95 percent of these properties. That’s why those were the communities that we engaged with to make sure that this piece of legislation would work for them.

So it’s because we worked in cooperation and in collaboration with these local governments, with the staff who would need to understand it and understand the impact…. They were included in as part of the consultation, because we do want it to be taken up by local governments — and again, just as the members opposite have been arguing, the flexibility, leaving local governments to make the decisions that work for their communities but also, at the same time, making sure it’s a tool that works for them.

This has been a significant undertaking, and I want to extend my gratitude to the staff at the ministry who undertook, probably, about 30-plus meetings between business and local governments and UBCM — dozens and dozens of phone calls and back-and-forth — to make sure that we landed in a place that would work for the businesses, first and foremost, but also for the local government so this was a tool that they feel would work for them in their communities.

That’s why this legislation is before the House. The people that are most impacted by it have all come to a place of agreement that this would be a tool that could work.

P. Milobar: Has the minister done any modelling or does she have any expectation of what will be considered a success in terms of numbers of properties that actually get actioned by this legislation? Or is it simply a case of the minister having a piece of legislation out, and if it gets used, great, and if it doesn’t get used: “Oh well. We wash our hands of it, as a government.”

Hon. S. Robinson: Of course I want local governments to pick it up. That’s the whole intent of this — you know, making sure that the relief is provided to the small businesses that we have all heard from. We’ve heard from them in this House. The opposition has brought forward examples.

I have examples of hearing from…. Just across the street in my community, Me-n-Ed’s Pizza has been really struggling because the local government, my city council, made the decision to change the OCP. That had significant impacts, and that’s why we worked closely with B.C. Assessment, with the UBCM, with specific local governments to make sure that it was a tool that would work. That’s why we took the approach that we did, and that’s why I directed staff to work closely with these partners so that we could deliver a tool that would work.

P. Milobar: With that as an expectation from the minister, is there a built-in review mechanism? Is there a way to check back, to check on the effectiveness?

There have been many pieces of legislation and many items brought through that have very little accountability measurable to them, over the time that I’ve been in opposition, in terms of the government actually checking to make sure that there’s a clear and defined deliverable and, if it’s not successful, a way to trigger and make things better.

Is there a planned review? Is there a way that the minister is going to be actioning if this is not taken up by municipalities, given that the previous legislation had zero properties and zero municipalities take it up?

[4:50 p.m.]

Again, yes, there is…. Now this is going to sound contrary to everything I’ve said previously, but the goal is to give flexibility to municipalities, but the other goal is also to give business owners and landowners tax relief. So if it’s not working yet again, it’s accomplishing one goal by giving ultimate flexibility to municipalities, but if it’s not delivering any tax relief, it’s just a piece of paper in a book.

Is there any plan, by the minister and the ministry, to do a check-in, to have a target that they would consider to be a successful implementation of this? If not, is there a built-in review that would kick in to make sure that this is actually working or needs amending?

Hon. S. Robinson: I appreciate the acknowledgment of a contradiction. Sometimes that happens in debate.

I want to be really clear. The goal is for tax relief. That is the ultimate goal — to provide tax relief, to provide a mechanism so that tax relief can be provided to these businesses and these not-for-profits. That is the entire goal — and doing it in a way that works for everybody.

I have already directed B.C. Assessment to provide support to local governments so that they have the information they need. We also have staff available to help with developing the bylaw. It is new, and we want them to have the supports that they need, recognizing that some local governments…. This is new, so we want to make sure that they’re well supported.

I know that staff will provide me with feedback as we move through using this new tool. We will also be hearing from B.C. Assessment around the requests that local governments make for the actual use of the land and improvements, the intel that local governments will be asking for. That will also help inform us about the appetite from local governments.

If there is some way that we would need to address any changes…. I’m sure we will hear from local governments about how it gets used and if there are challenges with it. They have been quite open with us around the interim measure. They told us. They gave us the feedback about what was hard.

Certainly, I would say…. Initially, there was some interest, and then, of course, COVID hit, and so peoples’ ability to direct staff to continue to do the work on an interim measure and bring it in became secondary, I would say, for some local governments. By then, we were well into doing this work, and so many of them chose to wait for this to come through in order to act on it.

P. Milobar: To be clear, the tax relief that is in this bill is strictly the municipal portion of property taxation. It’s not any other line item on your municipal tax bill that you would receive. It is strictly to do with the municipal property tax mill rate.

Hon. S. Robinson: That’s correct.

P. Milobar: I mean, that’s but a portion of taxes that get paid. Frankly….

You’ve referenced Kelowna a few times. Kelowna would have hospital taxation, which is quite significant. In the Interior, we pay 40 percent of the capital costs of hospitals. You don’t pay in the Lower Mainland or the capital regional district, but you do in the Interior.

It gets very expensive when you’re trying to build hospitals. In Kamloops, $200 million went to the regional hospital district tax. Kelowna was even more. So Penticton, Salmon Arm, all of those. I mean, if we’re talking about the areas that this would most likely impact, Penticton might have some airspace impacts, as well, on a few properties. Kamloops might have a few. Kelowna would have many.

Was there no thought given to the province trying to make whole regional hospital boards, regional hospital districts, and providing some tax relief that way, enabling municipalities to make similar reductions in those mill rates that people are charged, especially in the Interior?

[4:55 p.m.]

Hon. S. Robinson: I want to remind the member that folks in the Lower Mainland pay for transit. It’s just different investments from different groups in different parts of the province.

Again, I want to remind the member that those funds pay for those things in communities around the province. What we heard from municipalities is that they want a tool for their portion to relieve the burden. That’s what this is.

Flow-through taxes that they collect on behalf of other authorities added a layer of complexity that would have been challenging for local governments.

P. Milobar: Well, the minister beat me to the punch with transit, but I know that was the saw-off back in the day. Municipalities in the Lower Mainland were supposed to pay for TransLink, and municipalities in the Interior pay for hospitals. That seems to have gone out the window, but we’re still paying our 40 percent, and away we go.

I guess, really, though, at the core of this…. I recognize that both transit and the hospital taxes…. I started with those on purpose, because those would be much more complicated to work through with local governments to try to make whole and everything else like that. Not super complicated, but more complicated. However, there’s a significant portion that would be school taxes, which are remitted back to the province for the province. There’s obviously no homeowner grant to offset that for these properties.

Was there a consideration given? If not, why not? If it’s really about bringing forward some form of impactful tax change, municipalities are going to have to shift and move things around to make this workable. If they do that, why is the province not coming to the table on those properties with the commensurate share of school taxes to make sure that there’s skin in the game for the province as well to help bring these projects along?

[5:00 p.m.]

Hon. S. Robinson: I need to remind the member that local governments in the Lower Mainland do pay transit tax. The member seems to think that’s not the case anymore, but it certainly is the case. The other thing I want to remind the member is that the municipal portion of the tax is the most significant portion of the tax, and it gets redistributed as a result of this framework and this bill that allows local governments to continue to deliver the services and the programs that they deliver for the people of their community.

This is a temporary redistribution that provides relief to a subset of the folks in their communities, the mom-and-pop shops that several members on the other side described, that need relief because of circumstances that the local governments decided, which are creating additional pressures — sort of, I guess, what you could call unintended consequences of redevelopment. It’s for that reason that the municipal governments have the opportunity to shift around the burden, and this is the tool that they can use to do that to provide the temporary relief for those mom-and-pop shops while the redevelopment happens.

It’s not broad, all businesses. It’s very narrow in scope, which is why we have the 95 percent criterion there. It’s temporary in nature. So it’s five years. The whole idea is the redevelopment, which is what municipalities want in the first place, and it is about just shifting the burden so that they can continue to receive the tax revenue that they need in order to deliver the drinking water, deliver the sewage, deliver the parks, deliver the roads, deliver the infrastructure, because that’s what those tax dollars do. It just allows them the opportunity to provide temporary relief.

As a provincial government, we do similar things. We did that in 2020 by reducing school taxes significantly. We’ve done it around PST exemption on machinery. We’ve lowered the small business tax rate. We continue to look at ways that we can support small businesses through our frame, and this is one that local governments wanted to deliver for the folks in their communities.

P. Milobar: I wasn’t trying to suggest that the transit taxes aren’t still paid and charged in the Lower Mainland, but the ratios have, over the years, shifted, with other projects being taken on by the province, versus TransLink. The Pattullo Bridge would be a good example of that, where the $1.4 billion was just automatically assumed by the province instead of TransLink, overnight.

If we’re splitting hairs on stuff like that, I’ll just point out to the minister that, actually, this won’t help cities with sewage whatsoever, one way or the other, because water and sewer are statutorily separate utilities. You cannot mix those dollars with general revenues in municipalities. That’s why they’re always standalone, and that’s a minor point in the overall scheme of things.

[5:05 p.m.]

I guess the question, though, is…. I’m not asking for a broad-based cut to school taxes, but this would have seemed to be the opportune time to bring in a synchronized piece with the province, joining municipalities, trying to incent municipalities to get that development moving, to get that housing on the market. We’re in a massive housing affordability crisis. We’ve never seen house prices and rents as high as we have right now.

This minister was a former Housing Minister.

The former Attorney General was our former Housing minister for a couple of years, and we’ve seen rents now skyrocket.

Trying to bring these types of development properties onstream faster and more affordably will actually help with the overall housing mix. I think everyone can agree with that. That’s not even a political statement. That’s just fact. If you can densify a lot and get it onto the market faster and more inexpensively, there is a ripple effect.

The question is really around the province doing their part with this legislation, to be that partner at the table, to incentivize municipalities to actually adopt this type of legislation and actually bring in a bylaw. As we saw with the previous bylaw, it failed. Zero took up, and we could have been forewarned.

I guess the good news is that Mayor Stewart is liking this legislation. He sure didn’t like the previous. “We’re not happy at all,” Mr. Stewart said. “We straightforwardly asked for something” more workable “with ample time to get it passed, and they didn’t do it.” That was in February of 2020, so it’s a good thing that it has changed, given that Vancouver is half of those properties.

The question and the premise and the answer the minister gave just before this question really backs it up, frankly. Municipalities have a pool of ratepayers, and to enact this legislation in a municipality is going to require them to shift those tax dollars differently amongst all this pool of ratepayers. The province has a pool of ratepayers that pay into school taxes on your property bill.

The question is: why was there not a complementary piece to this to try to incentivize municipalities to move quicker on adopting bylaws, by showing that the province is an equal partner in this, by saying: “You know what? If you adopt this, we will waive the property tax for schools, the school rate, at the same percentage on the properties that qualify.”

Right now all we have is the well meanings of councils that they may or may not enact this.

The Chair: Member, I’m just a little bit curious where the housing and school tax piece fits into clause 2, because this bill deals specifically with tax impact on small businesses, not the other question. So if you could draw your questions closely to clause 2, I’d appreciate it so I can better understand the relevance to the bill. Thank you.

P. Milobar: Thank you, Mr. Chair.

In the drafting of this bill, the missing piece seems to be the partnership of the province with the municipalities, and we have a failed bill previously that was law, that was not actioned by one property in one municipality.

So why was there not a clause in this bill to say, as a province, we’re going to be equal partners with you, municipalities, and we’re going to do our part on the school taxation, which would be spread out around the school tax ratepayers just as property taxes get spread out across other ratepayers?

Hon. S. Robinson: Glad to get to the question. We did hear in our consultation process that any school tax relief that was in the interim legislation actually adds a layer of complexity for municipal administration.

Because the proposed legislation provides relief through municipal tax rate flexibility and not through a reduction of assessed value, there’s no straightforward way for school tax relief to be provided to the properties identified in the bylaw. It actually made it clunky. I think that is the technical term that we heard from the administrators who would be responsible for this. They asked for a much more simple framework, and that’s what we provided.

[5:10 p.m.]

P. Milobar: Does anything in this bill change, though, the system that currently works, where a municipality will collect the taxes, the complete tax bill, on behalf of all the other jurisdictions, the school boards — well, the province on behalf of the school tax? The regional district levies, the hospital levies, the transit levies — those all get collected by the municipality, and then they get redistributed out. Is there anything in this bill that changes that system?

Hon. S. Robinson: No.

The Chair: Member. And we still are on clause 2.

P. Milobar: Yes. Thank you, Mr. Chair. I’m just trying to get to some of these consultations that we don’t have access to. It has to be done through verbal questions, because they haven’t been provided.

The minister says that in the drafting of this bill it was discussed but that municipalities felt it would be too clunky to tell somebody that if they’re getting a 20 percent reduction in their municipal taxes, it would be too clunky to tell them they got a 20 percent reduction in school taxes and to remit the representative amount of money collected back to the municipality. Is that what the minister saying — that it was seriously considered with the drafting of this bill and dismissed because a computer software program would be considered too clunky?

Hon. S. Robinson: As the member described rightly there, he listed a number of different…. It’s what we call flow-through. The municipality collects on behalf of various other groups, whether it’s a transit authority or a hospital tax or on behalf of the province. The framework for those is within a jurisdiction, so for the province, the school taxes across the province, and to define an area and then a portion and then what that would look like when they don’t have the authority to change a tax on behalf of any other organization, any other taxing authority.

There isn’t the ability for the local government to do it, and there isn’t the ability for the province to do it, to define it based on what they were crafting for their unique area that they’re doing this tax relief for. So it became this very…. I’ll use the word “clunky.” It’s a technical term that is used all over by tax policy folks, because it’s not elegant, in that it has a framework, and this is when you use it, and this is when you don’t use it. It became very, very complex.

So they actually asked for it to not be included and to just leave it with the municipal portion — which is the bulk of the tax revenue — and allow them to have the flexibility. I know the member has argued, quite rightly, in this House, around municipalities being able to have the flexibility and that by adding another layer, it was going to be very, very difficult, and that it wouldn’t make it a simple process for the local government. It’s for that reason that we’ve crafted the legislation this way.

As a government, we are constantly looking for ways to respond to the needs of businesses, which is why we have a whole host of additional tools that we use to support small businesses.

P. Milobar: Well, municipalities, until this gets royal assent, don’t have the ability to do anything that’s in this bill either. I guess, technically, they have the ability to do some of it, but they’ve chosen not to in the previous bill. That’s the whole reason we have legislation.

To say, “Well, we would have had to change things to be an equal partner,” and to say that it would get very complicated doesn’t make a lot of sense. So I’m curious. Again, this is the frustration of not knowing what the consultations actually were and what was discussed, because I can get, perhaps….

I don’t think elected officials would be too overly concerned about the ins and outs of how to make a decision like that work, in terms of actually delivering it. They would see that it may be a good idea and want it done. So the people that are tasked with putting that in would find it difficult.

[5:15 p.m.]

But I find it hard to understand how a simple clause or two in Bill 28 that would have said that when the municipality enacts this, the provincial school tax will be adjusted at the same ratio as the municipality is adjusting their taxes…. It would make it very simple.

I know I’ve simplified it even more than the legalese type of people drafting it would. But the concept is very simple. The municipalities are doing all the heavy lifting. They’re the ones identifying the properties. They’re the ones identifying who actually qualifies or not, based on provincial criteria. They’re the ones deciding how long it’s going to be for, or not. They’ve decided whether or not one part of town gets a bit more of a subsidy when the other side of town gets a bigger subsidy. All of that has already been decided.

It’s simply that the province would have had to insert in Bill 28 a clause that says that they accept all of that work was done. “Go ahead, and we’re going to lower that particular property’s bill by the commensurate amount of school taxation.” Municipalities are going to have to do that for their own property tax. That, to me, would probably be more complicated than the province needing to do it.

Again, why was there an unwillingness of the province, through these consultations, to find a way forward, to be an equal partner, to try to incentivize municipalities to adopt a new change to their property tax system that is going to have impact on other ratepayers in those rate classes and has not been actioned once with the previous legislation, moving forward?

Hon. S. Robinson: As I’ve already stated — I think I’ve provided an answer — local governments did not want that added component, because it’s not their taxing authority. It’s another taxing authority, and it resulted in far more complex requirements on behalf of the local governments.

It was for that reason that they asked us very specifically, as part of the consultation, to not layer in additional, other taxes because of the requirements that would be on them to make those adjustments to make it legal. It’s other authorities that they would be making decisions on behalf of. That added a lot more layered complexity for the local government. We listened to them. We listened to their feedback, and that’s why we’ve crafted it in the way that it is crafted.

P. Milobar: The minister can correct me if I’m wrong on this. Has there been any concern by the minister or the ministry that there may be confusion when you have Bill 28, which we’re debating right now…? I haven’t seen, in Bill 28, where Bill 28 repeals Bill 10, 2020, the Municipal Affairs and Housing Statutes Amendment Act, 2020. I haven’t seen anything that has repealed the existing legislation, which not one municipality has used for one property.

How do these two bills, then, work together, when they don’t even acknowledge each other?

Hon. S. Robinson: I want to draw the member’s attention to clause 6. The purpose of this clause is to actually repeal the interim business property tax relief legislation under the Municipalities Enabling and Validating Act (No. 4).

P. Milobar: I did not catch that. I’m just confused, I guess, because it only refers to 2011, not Bill 10, 2020. I’ll follow that up when we get to clause 6.

Again, I guess, on clause 2, the bigger overarching questions, then, are in terms of the ability for the minister to override. What provisions are there? Is there anything internally that enables municipalities to know what timelines they would expect for a ministerial override on things like numbers of years in this?

[5:20 p.m.]

Also, is there any ministerial override to the 95 percent? We have ministerial override for five years. Is there any ministerial override to the 95 percent if a community can provide a good reason?

Hon. S. Robinson: There is no override for the 95 percent. That’s part of the legislation.

P. Milobar: I guess, drilling into that, then…. Again, we trust municipalities; we don’t quite trust municipalities to make sage decisions.

There has been a recognition by the minister that there maybe needs to be an override for a number of years. But a hard cap on 95 percent, even if a municipality can show that somebody is only at 90 or 93 percent…. Why were there not provisions in this for a similar type of override when it starts to become very apparent that the city is trying to work with the best of intentions but the property may fall short by a year or two?

The reason I’ll ask this is because the first year you qualify, you might be at 95 percent. But the way assessment values work and things slingshot around sometimes, in year 2, you might not be, and then in year 3, you might be again. So not having the ability to override, does that mean that that property would be slingshotted in and out of the program because, by definition, they would not qualify in year 2 if they didn’t meet the 95 percent threshold, but in year 1 and year 3, they did?

Hon. S. Robinson: Mr. Chair, I’ll provide an answer and then, I understand, will note the hour, I’m assuming.

Again, I want to remind the member that we’re not talking about an override. There’s a possibility of local governments asking for an extension. So I don’t know why he’s choosing some language that isn’t quite accurate, because local governments would need to ask government if they could extend five years.

The member acknowledged, and I acknowledge as well, that assessments can change, depending on what’s happening in the market. Because highest and best use is assessed…. It uses the market to do that. Local governments, in our consultation, were really clear that they wanted a threshold that was sufficient, that identified developable properties that were going to deliver on what they thought was important for redevelopment. That’s why they agreed to a 95 percent framework; that was important to them.

If such a thing were to happen as the member’s example, there is the revitalization tool that local governments can choose to use if they feel like that’s something that they do need to use. But again, they asked for a framework. They asked for a threshold because they felt that they could get lobbied by different businesses in different parts of their communities. So they wanted a framework that they could apply consistently that had a way of making these determinations.

Again, we modelled, based on the 95 percent threshold, that about 6,000 properties in the province…. Almost all of them are in designated areas where there are some significant challenges. This will be the tool that they would be able to use to provide relief.

With that, I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 5:24 p.m.

The House resumed; Mr. Speaker in the chair.

[5:25 p.m.]

Committee of the Whole (Section B), having reported progress, was granted leave to sit again.

Hon. G. Heyman moved adjournment of the House.

Motion approved.

Mr. Speaker: The House stands adjourned until 10 a.m. on Monday, October 17.

The House adjourned at 5:25 p.m.