Islands Trust Area Provision Tax (ITAP)

Islands Trust Area Provision Tax (ITAP)

(An idea for providing amenities like affordable housing in the Trust Area – Eric Booth)

In 1974 the Provincial Government of the day, through the enactment of the Islands Trust Act, established the Islands Trust Area, an area of British Columbia comprising some 460+ islands.

The following passages from the Islands Trust Policy Statement describe how the stage was set for the enactment (bolding mine):

By 1960s, 50 per cent of the total population of British Columbia resided in areas adjacent to the Trust Area. Pressure for residential development of islands in the Trust Area escalated. In 1969, when it became apparent that the Trust Area’s highly-valued environment could be irreversibly damaged by unrestrained residential development, the provincial government imposed a temporary freeze on subdivision of land until the island communities could adopt plans and regulations to control growth.

Establishment of the Islands Trust

The significance and sensitivity of the Trust Area, and the need for protective measures was internationally recognized more than 20 years ago. In 1973, an International Joint Commission proposed that the islands and waters adjacent to the British Columbia – Washington State border be protected as an international park in order to maintain water quality and to preserve and protect marine and land-based wildlife habitats and archaeological and historical sites.

At the same time, concerns were being raised at the provincial level. In 1972 an all-party special committee of the legislature was established to investigate the unique problems facing the Trust Area. The committee concluded that pressures arising from the Areas’proximity to major urban centres were damaging the very features that made the Trust Area so attractive to residents and visitors.

In response to these findings, the provincial government enacted the Islands Trust Act in 1974. The Act established the Islands Trust as a unique land-use planning agency, acting for residents of both the Trust Area and the province generally, and having a special conservation-oriented responsibility – to preserve and protect the Trust Area and its unique amenities and environment.

As stated in the Islands Trust Act, “The object of the trust is to preserve and protect the trust area and its unique amenities and environment for the benefit of the residents of the trust area and of British Columbia generally, in cooperation with municipalities, regional districts, improvement\ districts, other persons and organizations and the government of British Columbia.”

The bolded portion of the Trust’s object lays the groundwork for my idea.

In establishing the Trust, the Province restricted the potential growth of development in the Area, and thereby our tax base.

Apparently, the restriction has worked quite well, since our annual growth rate on Salt Spring over the past 15 years has been less than 1% in spite of the increased population pressures which surround us.

According to the 2016 Census, Trustwide, the average “immigration” to the Area is now just 1 new resident every six months. Some areas are losing population, while Salt Spring is gaining slightly.

Real estate prices have increased to the point where there is virtually no housing that is classified as “affordable” by the Islands Trust itself (under $300,000).

It has been recognized by the Trust for over 20 years that the Trust Area, including primarily Salt Spring, has an affordable housing crisis, and literally dozens of studies have underlined the problem.

To date, there are less than 100 designated affordable housing units on Salt Spring. And now, with the North Salt Spring Waterworks District (“NSSWD”) Board “pulling up the water drawbridge” on development on the island with their current moratorium, the solution to the affordable housing crisis has become significantly more challenging. The resulting domino effect threatens the future of service industries on the island.

Current projected infrastructure costs of the NSSWD area alone are in the range of $20 million. But, since there will be virtually no more growth, the existing ratepayers in the District will have to pick up the entire cost.

Meanwhile, the Ganges Sewer Area’s projected costs of upgrade to its sewer plant are in the range of $4 million.

The cost of transporting goods, services, and people (residents and tourists alike) to the island have increased as a result of the fare increases from BC Ferries.

Building costs have risen to$300/sf and are projected to rise another 20% with the implementation of the new BC Building Code in December 2018.

And finally we get to the projected cost of the Province maintaining our road network.

The singular solution to all of the above inherent challenges is really quite simple – money. Money, in sufficient quantity, can solve every single issue we face (along with political willpower).

But, therein lies the obvious rub. Taxpayers, ratepayers and tenants are reaching what I term “tax fatigue.” While salaries and wages have remained relatively flat over the past 15 years, property taxes and rental rates are reaching for the sky.

So, if “money’ is the solution, what is the solution to reaching that solution?

I believe the foundation for the solution (and please forgive me for my overuse of the word solution) lies within the Islands Trust Act itself, and here’s why.

The Province’s legislated restriction of growth within the Trust Area, also restricts the future potential tax base within the Area.

Unlike the municipalities of Surrey, or Vancouver, or Victoria, or Nanaimo, all of which corporate enterprises have the luxury of expanding their tax base through increased development and growth, and thereby providing themselves with the services they both need and desire, communities within the Islands Trust Area cannot.

Thus, the very object of the Trust, to “preserve and protect,” acts as a supply and demand throttle which has the (I assume) unintended  consequence of long term, continued property tax increases in order to service an area of the Province, a veritable provincial park, which has been enshrined for the “benefit of the residents of British Columbia generally”.

Those residents now number in the millions – 4.631 million by the latest count, of which the 10,000 Salt Spring residents comprise just 0.22%.

In other words, the Islands Trust Area is being preserved and protected for 99% of British Columbians, at no cost to them whatsoever (other than the rather paltry $180,000 annual Provincial grant – 2016). That amounts to an annual contribution of 4 cents ($0.038) per year, per resident of BC.

And yet, in a 2011 Ipsos Poll, commissioned by the Islands Trust, 86% of respondents surveyed across BC agreed that BC’s Gulf Islands are a special part of British Columbia. Across BC, at least 83% of respondents agreed the Gulf Islands should be protected from overdevelopment, and that the BC government should take action to make sure the Gulf Islands are preserved and protected.

Given the level of over-regulation within the Trust Area, I’m not sure what further action was being referred to, unless it was tax relief.

Should that 2011 polling be accurate, and thus representative, it suggests that virtually 4 million British Columbians (3,982,660) are in support of communities, like Salt Spring Island, within the Islands Trust Area, continuing to preserve and protect their communities for the benefit of the 4.6 million.

I suggest it is time, with apologies to JFK, to ask not what the Trust Area can do for the residents of BC generally, (e.g. – to preserve and protect the Islands Trust Area), but, what can the residents of BC generally do to help the Trust Area residents continue to preserve and protect the Area?

Since money is the solution, I suggest it is not unreasonable, or would be too much to ask of the 4.6 million, that less than 1/2 penny a day (remember pennies?) per resident, or $3.65/year ($0.01/day) from each property owner in British Columbia be put aside for the continuation of the Trust.

A $3.65 Islands Trust parcel tax, assessed on each and every commercial and residential property in B.C. will generate $8,133,686 per year (2017 BC Assessment – 2,228,407 properties x $3.65).

I suggest the annual revenue raised be managed by an appointed 3 person government commission which would, similar to how the CRD Grants In Aid program works, accept annually, applications for disbursements for projects within the Islands Trust Area for a wide range of works and amenities…maybe even an ice rink. Remember, our tax base has been severely restricted through the Islands Trust Act.

Effectively, the fund could maintain the roads, paths, and trails, used by the over 250,000 visitors to Salt Spring each year. Or, provide funding for the establishment of affordable housing, and help to pay for current and future infrastructure costs (water/sewer) while helping to provide future “amenities” to the Trust Area, such as park land.

The Resort Municipality of Whistler recently, and significantly, benefited not only from the tens of millions of dollars inputted through the Olympics, but, through the affordable housing created as result of the handing over of the athletes housing.

And, Whistler has, over the years, also benefited from allowing multi-million dollar hotels and resorts to create a tax base to support the local tourist industry. Five years after the Olympics, more than 78% of BC residents thought they were worth it.

On the other hand, for the past 42 years, the Islands Trust Area has been restricted by the Province from the monetary benefits of such growth or development.

If my proposal gains initial traction with the Province, I would suggest crafting a new poll (with enough residents polled to result in unequivocal conclusions) to elicit support from BC residents for the continuation of the Islands Trust object (which necessarily includes preserving and protecting the Area for the benefit of the residents of BC in general).

With that support in hand, the $3.65 ITAP Tax would show up on every property owner’s tax bill. I would suggest a note be included the first year explaining the many benefits to BC residents that the Islands Trust Area provides through  its preserve and protect mandate…all for just a penny a day…and such a bargain!