Ask Pat: Private School taxes

Duke asked—

The two large private schools on opposite ends of the city are nearing completion. My question is will the City be receiving any property taxes from these schools? It’s my understanding the BC Libs exempted them from certain taxes.

Short version: no, they likely won’t pay property tax. But as always, there is a longer answer. And this needs a bit of a “this is how I understand things, and I think I am correct here, but am willing to hear any corrections if people have them and I will fix the record” warning.

There are two types of exemptions from paying property taxes: statutory and permissive. As you may have figured from the name, the first is set in provincial regulation, Section 220 of the Community Charter outlines uses that may be exempt from property tax: Provincial property, places of worship, cemeteries, fruit trees(!), private schools and other things. The general interpretation of this act is that the statutory exemption only applies to the building or ground used for the prescribed purpose, not necessarily the entire property.  So a church that has a large parking lot and/or adjacent housing on the same property may not get statutory exemption for those auxiliary lands, but just for the place of worship.

The permissive exemption is also what it sounds like: something cities are permitted to grant, but are not required to grant. There are limits to how we can hand these out, and they are listed in Section 224 of the Community Charter. This permission is generally limited to government-owned lands not caught up in Section 220, parts of lands exempted under S.220 that are not strictly exempted by S.220 (like the parking lot around a church), or lands used by a charity or public service that are used for a community service or charitable work, including sports clubs. The City may grant partial or complete exemptions on these lands, but it is generally limited by Section 25 of the Charter which prohibits the City from providing direct assistance to a business. Whew.

In practice, the City does a review of permissive exemptions (and reviews applications for new permissive exemptions) in September or October, and updates its Bylaw in time that those exemptions can be factored into our financial planning for the next year. The last time we reviewed them in New West was on September 17, 2018, and you can see in that report the list of to whom the City provides exemptions. Both John Knox and Urban Academy are listed as exempt under S.224.

Now back to the other part of your question, Back in 2015, the BC Liberal Government was led by a Premier who proudly boasted that her child attended the most exclusive private school in Vancouver (one that had a large swath of “Permissive Exemption” real estate) while also taking public school teachers to the Supreme Court to defend an illegal contract that kept her from having to staff public schools enough to meet reasonable classroom size standards. That government signed in to law Bill 29, which extended a Statutory Exemption to all of these ancillary lands around private schools are part of the school operation. Student housing, parking lots, skating arenas, the woods out back where the kids smoke pot; as long as they belong to the school, they are now exempt by statute.

Frankly, this change probably does not apply to either the new John Knox school on 12th street or the new Urban Academy school at Braid and Rousseau, because both are modern “urban school” designs, with very little footprint outside of the building site. The parking is underground and the play area on the roof, so there aren’t open fields of “accessory lands”. The shift from Permissive to Statutory exemption is probably irrelevant in this case, though I am not clear why the City gives them an S.224 exemption when a S.220 exemption probably applies.

That said, both schools are being built on lands that had significant commercial value, and paid commercial property taxes before the schools took over the sites. If we ballpark the two properties at (land value only) $3 Million each, then at 2018 taxation rates for commercial properties, the property tax they would pay to the City would be a little over $30,000 each per year if there was a non-exempt commercial property on that spot. Plus about $12,000 each in School Tax. Take from that what you will.

2 comments on “Ask Pat: Private School taxes

  1. Pretty obvious where you stand on this one Patrick. Your NDP colours are coming through. Cherry picking examples like your jab in this article does a great disservice to the many people who are not snobs and who choose to support independent schools for many, many reasons; some faith based and some not. We as a society need to value and ‘respect’ diversity, not try to control it. I know that the issue of independent schools is a hot button but it does scare me to see and read some of the mean spirited comments and suggestions some people have. Just my two bits worth.

    1. I don”t think there is anything above that is related to “Cherry Picking”. I answered Duke’s question as best I could. I also don’t think I have ever hidden my biases, including my disdain for the former Premier’s aggressive undermining of the public school system. Of course, I also try hard to recognize my biases when doing my job as a City Councillor. Here is a throw-back article to the first discussion we had on this topic during my time on Council, which may provide some context on how I have tried to balance this: https://patrickjohnstone.ca/2015/05/the-urban-academy-meeting.html

Leave a Reply