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MLAs critical of tax break for ports becoming permanent

It's unjust and unfair that Delta taxpayers will continue to subsidize a big business operating in their community.

It's unjust and unfair that Delta taxpayers will continue to subsidize a big business operating in their community.

That's the reaction from Delta MLAs Vicki Huntington and Guy Gentner following a government announcement that a temporary cap imposed on municipal taxation for port facilities will be made permanent.

"There's no indication they spoke to the municipalities on something of such magnitude, which is so typical of this government," said Huntington, the independent MLA for Delta South.

Delta North New Democrat Gentner was equally displeased, saying, "Isn't it strange that we have a government and a premier who talk about how families have to come first and the middle class has to be bolstered and what do we find, when it comes to helping homeowners who are the tax base, it's being taken away from communities that are being heavily impacted by this kind of infra-structure development."

In 2004, the province restricted municipalities' ability to set tax rates for ports. Although Victoria has been compensating local governments to an extent, Delta's own analysis showed it should be getting several hundred thousand dollars more annually.

Originally a temporary measure, the cap on municipal tax rates was imposed following the Ports Competitiveness Review, initiated by a lobby group representing major port and terminal operators. That review concluded property taxation would be a major threat to their competitiveness.

In 2007, the Ports Property Tax Act was extended to 2018, but now it's been made permanent.

On Monday, the government announced that B.C.'s ports "will be even more attractive to Canadian and international investors" with the cap, encouraging infrastructure investment and expansion.

The province says the private sector has announced, initiated or completed port investment projects worth more than $1 billion since the cap, creating hundreds of jobs and significantly improving the competitive position of B.C.'s ports.

The permanent cap will also provide greater long-term cost certainty for investors and an incentive for further investment, according to Transportation and Infrastructure Minister Blair Lekstrom.

"B.C. benefits greatly from this amendment, as it will keep our port tax system competitive and makes our Pacific Gateway the preferred gateway for AsiaPacific trade. The proposed amendment will encourage investment so our ports can grow to serve our rapidly increasing export trade," he said.

The Deltaport container terminal at Roberts Bank opened a third berth a couple of years ago, while an entirely new three-berth terminal, called Terminal 2, is also proposed.

Huntington, who was on Delta council with Gentner when the controversial cap was imposed, said, "The province and the federal government have invested millions, if not billions of dollars, into that port infrastructure, and to restrict further the ability of the taxpayer to benefit at all from that infrastructure in terms of that tax base is quite simply improper. I don't think it's taking into account municipal needs as these businesses on port lands make large profits at what's basically been the public's expense."

Huntington noted Delta's industrial tax rate was already low compared to other communities when the cap was placed in 2004. Since then, Delta has only received an annual increase matching the rate of inflation, she said, adding that when T2 opens by 2020, the municipality will still only receive the artificially low rate.

Gentner said it's just another example of how the government is raiding the pockets of ordinary citizens through downloading and mismanagement.

Disappointed but not surprised the cap will be permanent, Mayor Lois Jackson said the original purpose of the freeze was to allow ports to put money into upgrading facilities, but years later they continue to get special treatment that other business doesn't receive.

"There's a philosophy out there that everybody should pay taxes and it doesn't matter who you are. What makes the port any different than a cement company or a fish company? Somebody has to pay taxes and why is it that only one area doesn't look like they're not?" she asked.

The compensation provided by government is limited and has not served to replace foregone property tax revenues, according to a report a couple of years ago by Metro Vancouver.

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