Nanaimo will lose $150,000 in total tax revenue from its three B.C. Ferry terminals after the provincial government stepped in to resolve a property assessment dispute between the ferry corporation and B.C. Assessment.
In 2010, B.C. Ferries appealed the $47 million assessment given by B.C. Assessment for its Horseshoe Bay ferry terminal. Late last year, the Property Assessment appeal board reduced the value of that property to just $20, saying the lease requires the property to be a ferry terminal, and because B.C. Ferries is losing money, a market-based approach suggests the property is virtually worthless.
If that decision had held, the City of West Vancouver would have had to pay B.C. Ferries back about $750,000 while losing the property from its tax base.
That decision, however, prompted B.C. Ferries to appeal its other 48 ferry terminals in the province by the Jan. 31 deadline, including Nanaimo’s Duke Point, Departure Bay and Gabriola terminals. If a similar decision was reached, Nanaimo would have lost $1.2 million in tax revenue, prompting Mayor John Ruttan and other mayors whose municipalities host ferry terminals to approach the province for a reasonable resolution.
On Thursday, Bill Bennett, minister of community, sport and cultural development announced the province had encouraged a deal between B.C. Ferries and B.C. Assessment that would see value in B.C. Ferry terminals be reduced by as little as 12 per cent in Richmond to as much as 22.1 per cent in Nanaimo.
“The appeal board decision directing B.C. Assessment to value the Horseshoe Bay terminal at $20 was simply not reasonable or fair to local taxpayers,” said Bennett. “I asked the parties to enter into discussions and agree to a fair assessment level that made sense. I am pleased with with the agreement and appreciate the efforts by everyone involved.”
Overall, B.C. Ferries will see about $1 million in total tax relief for all of its terminal properties for the length of the five-year agreement.
“We view this as a positive outcome for all parties involved,” said Deborah Marshall, B.C. Ferries spokeswoman. “All along we’ve stated we want to pay fair and reasonable property taxes throughout our service areas and we see this as a positive step. It also helps with predictability and helps mitigate fare increases.”
B.C Ferries claims its property taxes have risen from $1.3 million in 2003 to $5.2 million last year.
Prior to Thursday’s agreement, Nanaimo’s three ferry terminals were valued at $50.1 million. The adjusted taxable value is now $39.6 million, meaning Nanaimo will take a tax revenue hit of $150,686, the highest of any municipality.
The Horseshoe Bay terminal is once again assessed at $47.8 million, down from $54.6 million, which means the City of West Vancouver will lose $32,221 annually in taxes.
The municipality that takes the second biggest hit is Delta, which will lose $133,426.
Ruttan said while not ideal, the resolution provides certainty.
“We didn’t have much of a choice in this really, and I’m not entirely satisfied but at the same time it’s important to note, in my opinion, it’s fair and equitable,” he said. “But it’s still a lot of money and we obviously didn’t budget for this and we had no way of knowing in advance this was happening, and we’ll have to make up for it somewhere.”