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Updated: Waters: Nav Canada assessment appeal could hurt Kelowna's financial bottomline
Correction: Nav Canada is a private corporation that controls the air navigation system in Canada. It bought the system from the federal government in 1996. It is not a federal department or agency. An earlier version of this column referred to it as such.
To municipal officials, it’s another case of off-loading costs onto cities—this time, ones that have airports.
And for Kelowna, that could mean a $51,000 hit to its annual tax revenue bottom line.
Nav Canada, the authority that controls aircraft movement in this country has control towers at airports across Canada. But it doesn’t want to pay taxes on them.
So, in what’s expected to be the first of a series of similar moves, the agency has appealed its property assessments for the air traffic control towers at the Victoria, Penticton, Pitt Meadows and Castlegar airports. And the move has paid off.
The Property Assessment Appeal Board has sided with Nav Canada and, in the case of the Victoria International Airport tower, has dropped the assessed value of the control tower there to a nominal $20 from its assessed value of $1.4 million.
According to city director of financial services Keith Grayston, in Kelowna if a similar move is successful, the value of the control tower at YLW could be drop from its current assessment of just under $6 million to the same $20 nominal amount.
If that is the case, the city would be out of $51,000 this year.
Nav Canada argues there’s nothing it can do with the land the control towers sit on because they are so inextricably tied to the airports they serve.
But the appeals also serve another purpose. If the assessments are lowered to virtually nothing, the agency nips any claim by the city to have Ottawa pay a fee in lieu of taxes, similar to what is does for many other provincial or federal government buildings.
But the problem for the city is, while it directly affects its tax revenues, the issue is out of its hands. It does not handle assessments or their appeals and has no way to appeal a successful appeal. All it can do is lobby B.C. Assessment to fight Nav Canada on the rulings.
So far, neither the control towers at Vancouver International Airport, which is located in the City ofRichmond, nor Kelowna, the busiest and third busiest airports in the province respectively, have been the subject of assessment appeals by Nav Canada. But, given the success in Victoria, Penticton, Pitt Meadows and Castlegar, its just a matter of time.
A move here would be a way for Nav Canada to save money at the expense of Kelowna taxpayers.
The amount may not seem like a lot of money but at the municipal level, $51,000 is a program or service that may have to be cut.
Think about that next time you pay the Nav Canada charge on a flight out of Kelowna’s airport.
Alistair Waters is the Capital News’ assistant editor.