Courtesy of the Union of BC Municipalities (UBCM):
1) Submission on ALR/ALC Revitalization
On March 22, 2018, UBCM met with the Minister’s Advisory Committee on the revitalization of the ALC and ALR to present a submission outlining the critical need for local governments to retain an active role in agricultural land use planning and decision-making.
UBCM recommendations to the Advisory Committee included the following:
Recognize that local governments are a key component of agriculture planning and protection in BC and that thorough consultation with local governments is an integral aspect of enabling a robust and effective ALC and ALR.
Endorse the critical role of local governments in preserving farmland through land use planning, bylaw enforcement, review of ALC applications, and other measures.
Support the principles of consistency, fairness, and transparency in the governance of agriculture lands, and endorse the critical importance of local decision-making in agricultural land use planning.
Carefully examine the means of production of recreational cannabis to determine if the expected industrial-style production is the best use of BC’s limited agricultural land.
Consider revisions to the farm class system, the issue of farmland speculation, concerns regarding residential uses in the ALR, and food security.
The Ministry of Agriculture’s discussion paper and online survey continue to be available. The deadline to submit is April 30, 2018.
2) Speculation Tax Update
Finance Minister Carole James has announced several changes to the speculation tax, focusing its geographic scope of application on urban centres, introducing different rates based on residency and citizenship, and creating several exemptions. The speculation tax will be introduced into legislation in the fall sitting of the legislature.
Local governments in several communities have been advocating for changes to the province’s vacancy-focused speculation tax. The key changes to the tax are as follows:
Geographic scope of application: The tax will apply in the Metro Vancouver Regional District, excluding Bowen Island and Electoral A except for UBC and the Endowment lands; the Capital Regional District, excluding the Gulf Islands and Juan de Fuca; Kelowna-West Kelowna; Nanaimo-Lantzville, excluding Protection Island; and Abbotsford, Chilliwack, and Mission.
Rate and credit design: In 2018, the tax rate will be 0.5% on property value. In 2019 and subsequent years, it will be 2% for foreign investors and satellite families, 1% for Canadian citizens and permanent residents not living in B.C., and 0.5% for British Columbians who are Canadian citizens or permanent residents. A tax credit will be immediately applied against the speculation tax to offset a total of $2,000 for British Columbians who are Canadian citizens or permanent residents and not part of a satellite family. This will effectively exempt British Columbians from paying the tax on second homes valued up to $400,000.
Exemptions – the tax will not apply to:
Primary residences of British Columbians,
Homes rented out for at least three months in 2018, and starting in 2019, homes rented out for at least six months in increments of 30 days or more,
An owner or tenant undergoing medical care or residing in a hospital, long-term care, or a supportive-care facility,
An owner or tenant temporarily absent for work purposes, and
A property with a registered owner who is deceased, with the estate in the process of being administered.
In addition, owners of condos where strata corporations don’t allow rentals will be temporarily grandfathered, although limited information is available on how this will be implemented.
UBCM’s recent housing strategy proposed several measures aimed at addressing speculative demand, including a tax to penalize rapid speculative resale.
UBCM will continue to track this issue and work with provincial officials to advocate based on the positions brought forward by our membership.
3) UBCM Principles for Cannabis Taxation
The UBCM Executive, at its February 23, 2018 meeting, endorsed a principled approach to cannabis excise tax revenue sharing. In the absence of fulsome data, UBCM’s four principles seek to ensure that BC’s share of cannabis excise tax revenue addresses all local government costs associated with legalization, with remaining funds shared between the Province and BC local governments.
Derived primarily from the work of the Joint Provincial-Local Government Committee on Cannabis Regulation and established UBCM policy (i.e. endorsed resolutions), UBCM has established the following four principles:
1) Cannabis legalization should not result in additional local government funding by property taxpayers
2) Local governments should be reimbursed for costs associated with the implementation of legalized cannabis.
3) Local governments should be reimbursed for any additional policing costs resulting from cannabis legalization.
4) Remaining excise tax revenue (after taking out expenses incurred as part of principles 1-3 and the federal share) should be shared between the Province of BC and local governments.
It is generally accepted that local government services will be greatly impacted by the legalization of non-medical cannabis. Areas such as policing, bylaw enforcement, land use, public health, business licensing, education, and public consultation have the potential to increase local budgets. Of these costs, law enforcement is arguably the most costly line item on a local government’s budget. UBCM’s principles look to address these costs, while also trying to ensure that any remaining taxation revenue will be shared between the Province and BC local governments.
Through endorsed resolutions 2017-SR1, 2016-A3, and 2016-A2, UBCM’s membership has placed a high priority on cost recovery and equitable sharing of taxation revenue. However, at this point there is a lack of reliable data, and with a provincial framework that continues to evolve, UBCM has taken a principled approach to cannabis taxation revenue sharing.