Province asked to review port tax cap

Province asked to review port tax cap

Prince Rupert one of the municipalities asking for more grant assistance

Six municipalities affected by the provincial port tax cap signed and delivered a letter to the Ministry of Finance requesting a review.

Prince Rupert Mayor Lee Brain outlined what he considers to be the city’s number one financial challenge and explained why he and five other municipalities — including Surrey, Delta, the District of North Vancouver, Port Moody and the District of Squamish — wrote a letter to B.C. Finance Minister Carole James outlining the impacts of the cap and requesting solutions at the 2018 Union of BC Municipalities convention.

READ MORE: Prince Rupert city council takes aim at cap on port’s property taxes

“We want investment, and we want the port to do well but we also want the community to do well which means getting a fair contribution and if the cap is going to stay and that’s what the port ultimately wants and the marine operators want then we need to make sure there’s no difference in terms of how much payment we’re getting,” he said. “And if that means that has to come from the B.C. government then that’s what we’re going to address and we’re working with them on that.”

The tax cap was implemented in 2004 with the purpose of creating financial certainty for port industry and encouraging their growth. While this has been effective in helping port industries thrive — traffic through the Fairveiw Terminal in Prince Rupert expanded to 850,000 TEUs in 2017 — the cap also limited the amount municipalities can tax those industries to meet their annual budgets.

A provincial compensation grant was also created in 2004 to help municipalities make up the tax shortfall, but that amount neither accounts for depreciation nor applies to properties built after 2004. Brain said the primary purpose of the letter was to ask the province to adjust the grant to make up for the steadily decreasing industrial tax revenues.

“They could stay with the cap, but at least we’re not putting taxes on residential and commercial tax payers to make up the difference that we’re losing every year. That’s ultimately what our argument is,” he said. “What we need is for the B.C. government to come in and make sure that every time that tax rate goes down that there is a grant that tops it up to what is should fully be.

“That is what the problem is, it’s unsustainable in the long term and that’s why eight communities are coming together to say it’s not sustainable.”

READ MORE: Prince Rupert mayor outlines visions, challenges in Hays 2.0 presentation

In a emailed statement, the Ministry of Finance thanked the municipalities for writing the letter.

“Our government knows that many of B.C.’s smaller, coastal communities depend on ports to provide good-paying jobs and economic stability for the region. The Minister of Finance reviews all taxes and programs each year as part of the budget process, and takes the feedback of stakeholders into consideration during this process,” the statement read.

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