B.C. Government meddling in freezing BC assessments to 2007 levels

Saturday, November 22nd, 2008

Bill entrenches meddling in assessments

Don Cayo

“When I use a word, it means just what I choose it to mean — neither more nor less.”

— Humpty Dumpty, as quoted by Lewis Carroll

So, too, with making a law — at least one specific law that was apparently written by a panicky government scrambling to cover for its leader’s rashness in shooting from the lip.

The nub of a just-tabled bill to legalize the property assessment freeze announced weeks ago by Premier Gordon Campbell means just what the provincial cabinet chooses it to mean — neither more nor less. In one fell swoop it eviscerates the 10-year-old legislation that gives B.C. one of the world’s better property-assessment systems, it endows cabinet with jaw-dropping powers to aid or hammer any individual property owner or any class of property owners it wishes, and it opens up 2009 property tax collection to potential chaos.

And, as I see it, all this merely because the premier announced the freeze — ironically intended as an economic stabilization measure — before anybody bothered to think it through.

The bill amends several existing acts in order to accommodate the premier’s announced intention to freeze assessments at the July 1, 2007 level and to grant property owners the opportunity to defer property tax payments. When it comes to business and residential assessments, the bill — nominally, at least — entrenches what Revenue Minister Kevin Krueger told me it would do. It sets aside the usual provisions of the B.C. Assessment Act and establishes as the basis for 2009 property tax bills either the July 1, 2007 assessment level or the July 1, 2008 level, whichever is lower.

But then it goes on to give the cabinet power to ignore what the bill says and to override virtually every provision it sets out. Cabinet is specifically empowered to change the rules to:

– Add anything left out.

– Make the legislation more effective, ease transitional difficulties, or fix any errors, inconsistencies or ambiguities.

– Correct any unfairness.

– Do anything cabinet “considers to be in the public interest.”

And, you guessed it, “public interest” isn’t defined.

If all that is not scary enough, cabinet can also make its rulings retroactive, and use different methods and standards to determine the value of properties in the same class. And — despite specific provisions in the old Assessment Act — no one can appeal these cabinet decisions.

Revenue Minister Krueger called me Friday to underline his view that an option to have 2009 tax bills based on the lower of 2007 and 2008 assessment value will be advantageous to most business owners, as well as to homeowners.

I agree about homeowners, although I’m skeptical about businesses. As I’ve argued previously, “average” or “median” figures obscure the radically different way that values change within the same property class. In Metro Vancouver, for example, office towers continued to soar in value long after more modest commercial buildings stalled or began backsliding. The same is true in many smaller communities, where malls continued to escalate in value at a time when Main Street was starting to falter.

In these cases, merely allowing each property owner to pay tax based on the lower of two assessment values doesn’t make it fair. Because if some properties — the malls and/or the big office towers — get a very large break but other business properties get just a small break, the result is a shift of tax burden from big to small.

In principle, the all-inclusive power the government is trying to give itself to meddle further with assessments could provide the cabinet with a tool to help its friends and harm its enemies, and on that basis alone it should never become law.

But I honestly don’t think that’s the intent. And I don’t think that’s what would happen during the one year assessments are to be done differently.

Rather, I suspect, this bill is intended to forestall a flood of appeals to BC Assessment. And it will result, instead, in a flood of supplications to the cabinet itself.

After all, by giving itself the power to right any perceived wrong, the government implicitly invites every unhappy property owner to seek a special intervention. And, boy, if I were running any of the many businesses that’ll be shafted by this ill-considered tinkering, I’d be pounding on cabinet’s door the very day my next tax bill arrives, if not before.

© The Vancouver Sun 2008


Comments are closed.