DATE:  June 19, 2003
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Mayor Joe Trasolini
TEL:  604-649-9273 
E-MAIL: joe.trasolini@cityofportmoody.com

Municipalities Shocked by Proposed Provincial Ports Policy

PORT MOODY – Eight lower mainland port municipalities are expressing extreme concern on behalf of their municipal taxpayers and business owners about the provincial governments plans to cap taxation of port authorities. The Cities of Port Moody, North Vancouver, Burnaby, Surrey, Richmond, Vancouver, the Corporation of Delta and the District of North Vancouver have been pressing their point for some time that the provincial government's plans to address ports competitiveness would place an unfair burden on already overburdened municipalities who have coped with successive provincial downloading for almost a decade.

These municipalities recognize that our ports are significant economic generators for local economies, for BC and for all of Canada. "We have no objection to provincial and federal spending to make the port industry more competitive," says Port Moody's Mayor Joe Trasolini, "but they should spend their money, not ours. In other words, ports serving a provincial or federal need should not be subsidized by local property taxpayers simply because they have a port within their municipal boundaries." City of North Vancouver Mayor Barbara Sharp added "the benefits of ports competitiveness and port industries are shared by all British Columbians and indeed all Canadians. Municipalities bordering the Port of Vancouver should not be legislatively required to bear the cost of the subsidies."

The provincial government's proposal has four elements:
They plan to limit the local government Class 4 property tax rate on significant investment in new improvements made by port terminal operators up to a maximum of $25 per $1000 of assessed value and establish an overall ceiling or maximum Class 4 property tax rate for port terminal properties equal to the $30 per $1,000 of assessed value. Says Mayor Joe Trasolini "For Port Moody, this represents an astounding 35% decrease in the taxes currently paid by port industries,or an almost 3% tax rate increase to be absorbed by municipal taxpayers." Added Mayor Derek Corrigan of the City of Burnaby, "Even though the financial impact to Burnaby is not nearly as serious as the impact on our neighbouring municipalities, we are fundamentally opposed to the continued interference in our municipal autonomy. It is particularly galling that the Provincial government trumpets the benefits of the Community Charter, but continues to impose its will on municipalities. We are unable to tolerate any more downloading, either direct or indirect. Our taxpayers should not bear the burden of subsidizing the Port businesses."

The provincial government has indicated they would provide some provincial transitional assistance to local governments affected by imposition of the tax rate cap but do not specify the form that assistance would take. This transitional assistance to offset tax revenue loss would also be limited to a five-year period. In addition, certain defined types of assets of port terminal properties would be exempt from the assessed value, and thus exempt from municipal taxation. They suggested a review of the five year assistance program after three years, which raises fears that there may in fact be less than five years of buffering available to cities.

This tax rate cap would only be imposed on the City of North Vancouver, District of North Vancouver, City of Vancouver, City of Richmond, the Corporation of Delta, City of Surrey, City of Burnaby, and the City of Port Moody.

These eight port municipalities have presented a position paper to the Provincial Government advocating other means of distributing the cost of increasing the competitiveness of our ports. The Provincial Ministry of Finance has confirmed that not all of these have been explored.

The primary responsibility for Canadian ports falls under federal jurisdiction and therefore ports competitiveness is primarily a Federal responsibility.  Improving competitiveness of ports should not place additional burdens on host municipalities because:

• Our local port facilities benefit all Canadians, not just municipal taxpayers.
• Municipal governments do not earn any incremental revenue associated with the economic activity generated by ports, while the provincial and federal governments enjoy direct cash benefits in the form of sales, income and excise taxes, plus the annual stipend remitted by port authorities to the federal government.
• The presence of port authorities and related port industries create real costs for municipalities, i.e. Police, Fire Protection and roads.
• Revenues from property tax and Federal Payments in Lieu of Taxes (PILTs) are crucial for municipalities, in some cases amounting to 15% of their revenues.

Property taxes and/or PILTs are not the main obstacle to ports competitiveness. Several factors under the control of the federal governments could greatly improve port authorities' and related industries' competitiveness and their ability to make appropriate capital investments.  In dollar terms these would have a much greater benefit to ports than the reduction or elimination of municipal property taxes and/or PILTs. These federally controlled factors include:

• eliminating the requirement for port authorities to remit an annual stipend based on gross revenues,
• making a wider range of tools available to port authorities for financing capital investment,
• where appropriate, granting ports the authority to acquire and dispose of real property on behalf of the federal Crown without the necessity of Supplementary Letters Patent, as well as the right to retain the proceeds of sales of federal real property,
• playing a more strategic role in terms of legislation and investment that would facilitate the development of a comprehensive national and provincial transportation infrastructure, and
• direct subsidy to that industry if they feel that is in the interest of all taxpayers.

The lower mainland port municipalities are advocating that the provincial government ;

1. Not take any steps that negatively impact municipal property taxation of major industry lands for those municipalities that include ports within their boundaries;
2. Not take any steps that negatively impact municipal property taxation of major industry lands for any municipalities without:
   (i) More meaningful consultation with B.C. municipalities,
   (ii) A public process involving all stakeholders; and
   (iii) A more comprehensive review with municipalities of the taxation of all classes of property under the Assessment Act.
3. Involve those municipalities with significant port operations in any other initiatives being considered or implemented by the province related to ports competitiveness.

As of today's date, the Provincial Ministry of Finance has indicated they will not proceed with their proposed cap without a further meeting with the Mayors of the affected municipalities. The provincial government released the cap rate figures just last week and had indicated that implementation would follow very shortly.