Province won’t review its grants for taxes

B.C. rejects UBCM request to review province's grants-in-lieu of taxes formula

The Ministry of Advanced Education says “essentially thanks but no thanks,” to re-evaluating the way it calculates grants in lieu of taxes.

“He will not review and he will not revise it,” said Oak Bay Mayor Nils Jensen, referring to an Oct. 25 letter from Minister of Advanced Education Andrew Wilkinson.

Oak Bay and the Union of B.C. Municipalities asked the province to amend the University Act to require that the university grants-in-lieu-of-taxes formula better reflect forgone municipal taxes and that rates paid by universities be in keeping with payment- in-lieu-of-taxes paid by the Government of Canada for Federal properties.

Council continuously uses the example of Esquimalt which received about $12 million this year for the naval base within its borders.

The provincial pot for grants-in-lieu-of-taxes hasn’t increased since its inception.

“It’s one pie and it’s sliced thinner and thinner and thinner,” Jensen said. “It’s not just us, it’s every community that has a university.”

When payments started in 1965, three public universities – University of British Columbia, Simon Fraser University and UVic – shared the funds; today, 11 public universities split the money contributed to their individual municipalities.

In 2003 Oak Bay got more than $72,000; this year the district received $55,000.

“While the Ministry of Advanced Education provides funding for British Columbia’s public post-secondary institutions, these institutions operate under provincial legislation,” Wilkinson wrote in a letter to Oak Bay. “Under the University Act, responsibility for the management, administration and revenue, business, and affairs of a university rests with its board of governors. Under the act, property vested in a university and held or used by, or on behalf of, a university for university purposes is exempt from taxation. Requesting universities to increase the grants paid to municipalities would place additional financial pressure on the limited resources of the Ministry of Advanced Education, public universities and students.”

They hoped to see the government open a conversation about shifting toward the approach taken by the federal government where the grant is based on assessed value and taken from general revenue.

“That’s how it should be in British Columbia. It should be tied to the value of the land and the cost of services and it should come out of general revenue. That’s the fair way to deal with it,” Jensen said. “What we had hoped for was a discussion. … Our services are covered to about only 20 per cent so  it is a burden to the Oak Bay taxpayer to have the university in its jurisdiction.”