Feb 4, 2018

Since our commentary on Victory Motors (Abbotsford) Ltd. v. British Columbia (Assessor of Area No. 15 – Fraser Valley), 2015 BCSC 130, the B.C. Court of Appeal has reversed that decision and reinstated the Board's decision. In doing so, Frankel J.A. noted at para. 64:

That the Victory Motors property has value to Victory Motors (Abbotsford) Ltd. is beyond question. Were it otherwise, Victory Motors (Abbotsford) Ltd. would not have invested hundreds of thousands of dollars to convert the existing building from a state of disrepair into income-generating rental units. To accept that the property has no value would be to accept that Victory Motors (Abbotsford) Ltd. can carry on a commercially-viable income-generating business while contributing nothing to the property tax revenues the City of Abbotsford requires to provide municipal services.

When assessing unremediated brownfields for tax purposes, an income approach may be the best and fairest means of determining property taxes. This is consistent with the public policy goal of tax relief or subsidies to encourage brownfield clean up; a subsidy (in effect) that was not justified in cases such as this where there were improvements to generate income but the brownfield remained unremediated.