British Columbia

BC Ferries agrees to pay West Vancouver property taxes

Political pressure has helped plug an expensive land-value disagreement that had threatened municipalities that have BC Ferries terminals with the loss of hundreds of thousands of dollars in tax revenue.
BC Ferries as reach an agreement to pay property taxes for its Horseshoe Bay ferry terminal in West Vancouver. (Darryl Dyck/Canadian Press)

Political pressure has helped plug an expensive land-value disagreement that had threatened municipalities that have BC Ferries terminals with the loss of hundreds of thousands of dollars in tax revenue.

Following three months of discussions, BC Ferries and the agencies that determine property values created a formula that boosts the assessment of the Horseshoe Bay terminal up to more than $47 million, after it was slashed to just $20.

The new agreement now ensures all 48 ferry terminals across the province are assessed in the same way and smoothes the rift with the District of West Vancouver, which called the initial decision "ludicrous" as it filed notice to take the dispute to court.

The waters were calmed after British Columbia's Community, Sport and Cultural Development Minister Bill Bennett convinced the parties to meet at the same table.

"I think everybody knew that ultimately government has the leverage of being able to introduce legislation and establish how those assessments are going to be done," he told reporters in Victoria.

"So it's a lot cheaper to stay out of court, it's a lot easier for everybody to sit down and negotiate something that's reasonable. And that's what they did."

November ruling devalued properties

The Horseshoe Bay terminal, a major port located on the western tip of West Vancouver, was the first to be devalued in a ruling last November. 

The change amounted in the loss of future property tax revenues from BC Ferries, and the district was also ordered to pay back three years of previous taxes, worth about $750,000.

The decision came as the result of a BC Ferries' appeal of a routine appraisal by B.C. Assessment, the Crown corporation that assesses the market value of property which is used tax purposes by municipalities.

The original assessment put the value of two parcels of land and some other property at more than $54 million.

But that value plummeted to just $20 with a ruling by the Property Assessment Appeal Board, which operates at arm's length from the assessing body. The agency's rationale was that because ferry terminal land is designated by the province as having only one purpose, it has no potential for profit.

At the time of the November decision, the property value assessments for the Swartz Bay terminal near Victoria and three more in the Courtenay-Comox area, were also being appealed. Some other BC Ferries properties in Richmond and Prince Rupert were also on the list.

New methodology still reduces assessment

The new methodology still results in about a 12 per cent reduction of Horseshoe Bay's property value, bringing it to just over $47 million, but the District of West Vancouver said that overall it's pleased.

"Unfortunately, the challenge we all faced is the (potential B.C.) Supreme Court ruling -- even if it went our way -- could have simply re-set the clock and the same ridiculous assessment could have been made again," said Mayor Michael Smith.

The district will also no longer be required to pay back any retroactive revenues.

"All things considered, including the risk to West Vancouver taxpayers and the legal fees and other costs we would have incurred, we are satisfied with this outcome."

Bennett said assessments in other municipalities vary in the amount BC Ferries' properties have decreased in value, the most at upwards of 22 per cent.

But he said the figure is relative to the size of the community, meaning only a few hundred dollars for some, and more for Nanaimo, West Vancouver and North Saanich, where there are major ferry terminals.

The minister said he still plans to bring in legislation sometime in the future to close the assessment loophole more formally. The government will also look at what other properties might fall under a similar single-use designation and see if it should be covered when that time comes.

Nanaimo Mayor John Ruttan said he's pleased Bennett brought the parties together for a successful conclusion.

"I would also like to express my appreciation to BC Assessment and BC Ferries for their active participation on this challenging issue," he said in a release.

MLA Joan McIntyre, who represents West Vancouver-Sea to Sky, said she's spoken to West Vancouver's mayor several times in the past day.

"The mayor was happy," she told reporters in Victoria. "It was a very difficult situation ... It is definitely a win-win."