ANYONE banking on long-term municipal tax revenues from port expansion projects may want to stop and read the fine print.
A new report released by the City of North Vancouver's finance department reveals that Port Metro Vancouver has almost halved its payments to the city on unleased port lands over the last decade. Also, any new improvements on leased lands will be depreciated and removed from the tax base in 10 years.
The staff report reveals the "tremendous tax advantage" port industries receive, Coun. Pam Bookham said at the May 27 city council meeting.
"The community is absorbing a lot of negative impacts," she said, citing tree clearing and traffic jams resulting from the Low Level Road expansion project, "and the idea that there was some financial benefit that was going to come to the community . . . when it's put to the test, assuming that this information is accurate, it's pretty paltry and it's going to be a very short-lived bump in our tax revenues from the port industries."
According to the staff report, residual or unleased lands owned by PMV are not subject to provincial tax rules, but are instead required by federal law to make a "payment in lieu of taxes," or PILT. Two recent Supreme Court of Canada decisions, however, have directed the government to follow existing provincial tax regimes, unless extraordinary circumstances are found. This has caused PMV to work with BC Assessment to examine land and improvement values on residual port lands and, in some cases, BC Assessment has significantly reduced its assessment of these values, the staff report states.
It says that from 2003 to 2012 the port reduced its PILT payments to the city by 46 per cent from $325,710 to $176,677.
When it comes to leased lands, the provincial Ports Taxation Act controls both the assessed values and the tax rates for port tenants. In the city, this legislation applies to Neptune Terminals, Cargill, James Richardson, Seaboard Shipping and Lynn Term East (Western Stevedoring).
Tax values are capped for existing leased lands and improvements. For new improvements on leased lands, however, values are set by a provincial formula and written off over 10 years. The city staff report states improvements will be depreciated on a "very aggressive schedule" and therefore removed from the municipal tax base after 10 years - far shorter than their probable useful life.
This rapid depreciation is a "galling" revelation for Coun. Rod Clark.
"Ten years later we get nothing extra in the way of taxes," he said. "That, to me, is not only thumbing your nose at the community, but it's not paying your fair share."
The 10-year depreciation term was also news to Coun. Don Bell.
"It's frustrating," Bell said. "When the port comes forward and talks about their various projects, they outline the benefits to the community, they do so in terms of employment opportunities and tax revenue."
Bell said planned port expansions mean more equipment, but will not necessarily result in significant job creation.
"So we don't get the employment, and now it sounds like we're not going to get the long-term benefit of the increased development at the port, the expansion of the port, in terms of tax revenue," he said.
At the meeting, council unanimously supported a motion put forward by Coun. Clark to write to the PMV board, asking the port to keep hydro servicing for its tenants on Port Metro Vancouver land, eliminating the need for a 69-kilovolt power line down St. David's Avenue.
The port has already indicated it plans to proceed with the St. David's power lines, though, having said it would cost $10 million to run the lines from the west along port property.
"It's not really a question of not having the money, it's a question of them not being wiling to spend it and really not listening to the community," said Clark.
"The port doesn't recognize us as a licensing agency, they don't respect our noise control bylaws, they don't do a lot of things. They are the big kahuna and they throw their weight around accordingly and as far as I'm concerned it's not acceptable," he added.
Earlier in the evening, council deferred making a decision on a $10,000 budget to cover the 2013 costs associated with the Low Level Road Community Liaison Committee in order to propose that the port help fund the committee.
Coun. Bookham said she did not support spending $10,000 on an "exercise in futility."
"Port Metro Vancouver has made it very clear, repeatedly, that they will do what they will do without regard for the impact on our community," she said.
