In January 2015, the B.C. Supreme Court dismissed a challenge brought by TimberWest against the 2014 City of Campbell River Tax Rates Bylaw. See our post of January 28, 2015 entitled “City of Campbell River Successful Against Challenge to its Tax Rates Bylaw”.
In a decision given January 29, 2016, the British Columbia Court of Appeal upheld the Supreme Court ruling and dismissed TimberWest’s appeal.
The interpretation of section 14 (now section 29) of the Local Government Act was the subject of the proceedings. This section provides that on incorporation of a municipality or extension of a municipal boundary, letters patent issued by the Province may designate the newly incorporated lands and require that they be taxed at a rate (in this case the rural taxation rate set by the Province) different than property of the same class existing elsewhere within the municipality. TimberWest challenged the City’s interpretation of that provision and argued that all property of the same class, whether a part of a boundary extension or not, must be taxed at the same rate.
The Court of Appeal, finding in favour of the City, stated:
“In my view, the chambers judge correctly interpreted section 14 of the LGA as authorizing the Province to fix a tax rate for a class of land within a designated area, and as exempting Campbell River from having to apply the same rate to other lands in that class falling outside the designated area.”
The Court of Appeal decision is significant to local government. Many municipalities have lands similarly designated through municipal boundary extensions, and tax those lands at a differential rate from other lands of the same class, utilizing the authority of this section of the Local Government Act and Provincial letters patent. The validity of that process and the tax bylaws adopted pursuant to that authority have been confirmed by the Court of Appeal.