Saturna Island Property Owners Association
P. O. Box 27, Saturna, British Columbia, V0N 2Y0
SIPOA@saturnanet.net

Gulf Islands National Park Appeal Settlement

August 31, 2012

From: Art Chambers
To: Murray Rankin
Cc: Hilary Harley
Subject: Gulf Islands National Park Appeal Settlement

Hi Murray

My apologies for the late response for a summary of the 2008 appeal of Saturna Island properties within the Gulf Island National Park (GINP).

Briefly, the branch appealed the 2008 grant in lieu of tax payments made by the Federal government for a majority of the Saturna Island properties within the GINP. There were several delays in scheduling a formal hearing, including a one year delay while the federal government established all new members of the Dispute Advisory Panel. The new Panel commissioner placed a renewed emphasis on appellants and Public Works and Government Services Canada (PWGSC) to negotiate a settlement as a first stage prior to proceeding to a formal appeal hearing. Some of the appeal delay was also attributable to our own staffing availability, given the annual peak workloads we experience each year to prepare approximately 400,000 tax notices.

Once discussions started up again, there were a number of stages to the appeal process:

• Initial fact finding – the original PWGSC position was that parcels within the park could not be sold, so there were no comparables that could establish a market value for park properties. Our original understanding was that the Park boundaries had not been gazetted, and so parcels could be sold if the funds were used to purchase more desirable parcels for the park. Our position was incorrect once we reviewed the actual GINP agreement, and reviewed the federal legislation. We proceeded to find another approach to support our argument that the PWGSC grant assessments were too low;


• PWGSC assessors took a very definite position that assessments for the grant calculation had to be based on market value, and as there were no sales of national park properties, the properties only had nominal value, and said that we had to provide evidence of market value for similar properties in order for them to be able to adjust the assessment values they used;


• We changed our approach to looking for market sales of properties with severe use restrictions. We found assessment precedents for sales of properties subject to strict conservation covenants, which we successfully argued were equivalent to the restrictive legal restrictions on national park lands. We brought to the negotiation table some comparable sales of properties with conservation covenants, and PWGSC countered with their own comparables after conducting their own review. We eventually reached consensus on what the new aggregate valuation for the Saturna Island park properties should be;


• The original aggregate assessment value used by PWGSC in 2008 was $4.67 million, and we reached a negotiated settlement of $11 million of assessed value for the 2008 taxation year in March 2011;


• Due to the large amount of staff time expended on the 2008 appeal , with no guarantee of success at the time, I did not appeal the 2009 or 2010 grant payments. However, once we reached agreement on the revised 2008 valuation, PWGSC recognized that we were still within the 90 day appeal period for the 2011 grant payment, and offered to adjust the 2011 grant payment based on a revised assessment total of $12 million. To provide some future certainty, they also requested that we use $12 million as the basis of the 2012 grant settlement as well;


• I agreed to the $12 million aggregate assessed valuation for 2011, and agreed in principle to a $12 million valuation for 2012, with the provision for 2012 that the non-Saturna Island properties within the GINP would also see an equivalent assessment adjustment.

We received the additional grant payment from PWGSC in June, which I reviewed for reasonableness. We did a pro-rata allocation to all tax levies for the appealed properties, and on August 9, we paid out these additional 2008 and 2011 grant funds to the impacted parties. The total additional grant payment received was $59,756, of which $12,717 went to the Capital Regional District and Capital Regional Hospital District (CRD/CRHD). The largest recipient was the province for school and general taxes, the CRD/CRHD received the 2nd largest payment, and Islands Trust received the 3rd largest payment.

I want to acknowledge that Hilary Harley, Director, Audit & Compliance of this branch, made a significant contribution to the assessment discussions throughout the appeal process. She is a property appraiser by profession, with current responsibility in the branch to ensure that the assessment information used in the property transfer tax program reflects market value. Without her assistance, the appeal process would not have been successful.

Art Chambers
Director, Real Property Taxation
Phone: 250 356-9565
Fax: 250 387-2210
Web: www.gov.bc.ca/sbr/