By Sarah Payne The Tri-City News
Sep 14 2007
The provincial government intends to extend its tax cap for port industries until 2018 — potentially good news for Pacific Coast Terminals but bad news for Port Moody's pocketbook and PCT's neighbour, the Flavelle Sawmill Company.
The Ports Competitiveness Initiative was introduced in 2003 to encourage new port investments and to increase the industry's competitiveness with the U.S. Since then, about 20 port properties throughout B.C., including some in Port Moody, have paid property taxes based on a capped mill rate of $27.50 per $1,000 assessed value while other Class 4 industrial properties such as Flavelle have been paying nearly twice that amount.
To offset tax revenue losses the province has provided a $494,000 annual grant but Port Moody's shortfall between the grant amount and what it would have collected in property taxes from its port properties now amounts to $364,000 since 2004, or about $91,000 each year.
"The province can subsidize port industries, but B.C.'s cheque should go to industries directly," said city manager Gaetan Royer in an email. "They should not send cities a cheque and force us to give it to ports in the form of a tax break.
"Tinkering with the property tax system in favour of a few owners is unfair to the rest of the taxpayers. Artificial caps and special rules for industrial assessments just distort the system. Port Moody has long favoured an in-depth review of the property taxation system rather than having the province play with the rules."
In making the announcement Tuesday, Finance Minister Carole Taylor said the extension "will provide additional support for communities and ports operators to ensure B.C.'s ports remain competitive into the future." Transportation Minister Kevin Falcon said the province's ports are an "integral part of the Pacific Gateway Strategy" and the extension is needed to attract international investment.
The proposal still has to make the legislative rounds but, if approved, the 2009 Ports Competitiveness Initiative will include:
• a continued tax rate cap of $27.50/$1,000 assessed value for existing investments for 10 years;
• a continued tax rate cap of $22.50/$1,000 on new investments for 10 years; and,
• increased municipal compensation and payments indexed to inflation from 2009 to 2018.
Cities would get a one-time adjustment in 2009 to reflect what the compensation would have grown by had it been adjusted for inflation since 2004.
A media release stated that consultation with stakeholders fulfils the province's commitment to review the initiative after three years. Port Moody has spoken out against the tax cap several times since it was first introduced in 2003, maintaining the tax relief for one industry shouldn't be made on the backs of neighbouring industries, businesses and homeowners.
Royer said the city will have to work a continued cap into its 2008 budget deliberations, adding any shortfall from port properties will have to be absorbed by other property owners.