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By FRED WILSON

If Vancouver city finance
director Peter Leckie and mayor
Jack Volrich get their way, about
$6 million in taxes will be chopped
from industrial property’s share of
the tax load next year, most of
Which will be dumped on to
residential property.

_In a special report to the city’s
Mance committee, meeting this
Thursday as the Tribune went to
Press, Leckie proposed tax cuts for
Industry amounting to 21.8 percent.
But to let industry off the hook, he

Proposed to increase taxes on

Commercial property by 3.7 per-
cent and on residences by another
3.7 percent.

Leckie’s report apparantly has
the backing of mayor Jack Volrich
and his “economic development
department” set up last year to

_ attract industry to the city. The

Proposed tax cuts are an obvious
attempt by Volrich to line up big
Dusiness support for his campaign
mM the civic election and to
demonstrate the kind of policies
that a “conservative council’’
as his leadership would carry
out.

The city would have had to make

-& decision on 1979 taxes by

November 10 in any event, five
days before the civic election. But
it was widely expected that council
would routinely re-implement the
tax system in effect in 1978 which
had been the most equitable

_ Sharing of the tax load in years.

Leckie, an unabashed right
Winger who has more than once
attempted to direct city policy on
behalf of big business, has drawn
up a one sided report which calls
for a change in the tax system
because the changes in 1978
“benefited the residential sector at
the expense of the business sec-
tor.” Although Leckie admits in
the report that there is no in-
dication that industry was unable
to pay the tax increases in 1978, the
implication throughout is that the
increases were unjustified.

To back up his contention, Leckie
Cited an average tax increase of
41.4 percent on industrial property,
14.54 percent on commercial
Property and 5.22 percent on
residential property. The figures
are misleading, however, as
Leckie carefully omitted giving the
actual taxes the percentages were
based upon.

What really happened to taxes
this year was based on two main
factors. The first was the re-
assessment of all property in the
Province by the provincial
assessment authority which ended
a three year freeze on the tax rolls.
The re-assessments were supposed
to bring assessments up to market

value, which it did for most

DERA receives
grant from feds

The Downtown Eastside
Residents Association, whose
funding was cut by Vancouver city
Council this year by $24,000, this
Week received a $10,000 grant from
: €federal government to make up
or one of the two salaries that the
city had axed. :
2 The application for funds to the
So of state in Ottawa was
Ghee exactly like the case put to
Y council, DERA president
Tuce Eriksen told the Tribune
one tay: “It seems that the
oe who do not consider the
= of our Association worthy of
: ee are the incumbent
Breer and the mayor,” said
sonee DERA’s funding was cut
thr three salaries to one, the
Raa officers have shared
worki ae € salary and continued

residential
In most cases,
industrial property

remained vastly underassessed,
even though the percentage rises 1n

some cases were higher.

The second main factor was the
decision of the city to choose an
“assessment base”’ by which to tax
various classes of property. The
provincial government gave
Vancouver and all municipalites
four choices, termed Option A, B,
C, and D, of how to distribute the
tax burden. Option D would have
had taxes applied on the basis of
actual assessments and would
have benefited industry and
business substantially and made
residences pay the great majority

commercial and
properties.

however,

_of taxes. The city chose Option A,

the most beneficial for residents,
which said that residences would
be taxed on the basis of 15 percent
of: the market assessment, com-
mercial property on the basis of 25
percent of the market assessment
and industrial property on the
basis of 30 percent of the market
assessment.

Leckie’s proposal is that the city
approach the provincial govern-
ment to change the breakdown of
Option A and drop the assessment
base for industry from 30 percent
to 25 percent. That would reduce
industry’s total property tax bill of
about $30 million by 21.8 percent or
$6.5 million.

The catch, or course, is that what
industry does not pay, the
residential taxpayer will.

Residential taxes already amount -

to 52.7 percent of the total property
tax pie, and Leckie would have that
share rise to 55.2 percent. Ac-
cording to the method of
calculation (city figures are
notoriously inaccurate and often
don’t balance) residents will be
saddled with anywhere from $3.9
million to $5 million in added

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Tax gift proposed for Vancouver industry

City finance director Peter Leckie this week proposed to cut in-
dustrial taxes by over 20 percent and to raise taxes on residences by
3.7 percent. Leckie’s analysis of the 1978 tax levies only tells half the
story, however, and his position as finance director could well
become an election issue.

property taxes. After working its
way through the calculations it
could amount to a $36 to $60 in-
crease for the average home in the
city.

The 332 industrial properties in
the city, on the other hand, at
present pay only about 15 percent
of the total property taxes in the
city, and the city only receives a
fraction of that. First of all, the
province takes a rake off for school
tax purposes, and secondly, about
60 percent or $18 million of what

industry pays is a machinery tax~
which only applies to the school tax
and not for general city purposes.
In other words, when Leckie
complains on behalf of industry
that it is being taxed ‘‘at double the
rate’’ of residences because of its
30 percent assessment base, he is
telling a half-truth. The clear
majority of industry’s property
values are in machinery and these
values just aren’t counted in
working out city taxes. The
principle of the property tax is that

City economic advisory committee
a ‘who's who’ of business interests

Continued from pg. 1
senior vice-president of the CNR;
Roz Kunin of Canada Manpower;
John Langstaffe, executive vice-
president of Canadian Forest
Products; David McLean, lawyer
with McLean, Hungerford and
Simon; John McLennon, president
of Macauley, Nicolls, and Maitland
real estate firm; John Poole,
presdent of Daon Development;
F.J.N. Spoke, general manager of

the National Harbors Board; and .

Paul Trussel, executive director of
the B.C. Research Council. The
only other labor representative

Vancouver and District La
ed this week that the city s econo
the majority of its time lobbying

that is just what t

besides Neale is Pete: Wilson of
the Teamsters who was absent at
Friday’s meeting.

According to one report of the
advisory committee’s meeting
both the mover of the motion to
endorse Leckie’s report and the
-seconder, Cosulich, questioned the
appropriateness of their placing
the motion because their
businesses would directly benefit
from the tax cuts.

Neale said the Wenesday that he
“may have to get off the com-
mittee,’ but would ocontinue to
-serve on it for an interim period to

ict Labor Council secretary Paddy Neale reveal-

mic advisory committee has spent
for tax breaks for industry — and

he city’s finance department is now proposing.
—Sean Griffin photo

“‘police”’ its activities.

In spite of the obvious conflict of
interest between the members of
the economic advisory committee
and the city’s taxation policies,
when Leckie produced his tax
proposal it was released early for
consideration by members of the
city finance committee and by the
advisory committee. The advisory
committee was invited to make a
supplementary report, as well,
which will be presented to the
finance committee in support of
Leckie’s proposal.

Neale said that he insisted that
he be disassociated with the report
of the committee, and that his.
views also be represented before
the finance committee. The VLC °
meeting unanimously endorsed his
position. .

In other business before the VLC,
delegates voted to endorse COPE
candidate Bruce Yorke for mayor
in the November civic elections,
along with the entire COPE slate
for council, school board and parks
board, and independent aldermen
Michael Harcourt and Darlene
Marzari.

Plumbers delegate and VLC
executive member Jom Dougan
said that the labor movement can
be pleased that there will be a
united campaign for the civic
election behind COPE, Harcourt
and Marzari. But -he declared, in
speculation by Harcourt and the
speculation by Hariourt and the
media that the labor council would
join Harcourt in endorsing May
Brown for mayor, “This motion
should make it clear to the press

that labor won’t be supporting a -

Liberal candidate for mayor.”

taxes should be proportional to the
value of ‘property owned, and the
omission of machinery from the
city’s taxes against industry is a
giant and unjustified tax bread for
industry. :

Industry can hardly claim that it
is being overtaxed in Vancouver.
Of the 332 industrial properties in
the city 101 paid less than $1,000 in
property taxes in 1978. That should
be contrasted to the $1,011 that the
average homeowner in the city
paid in property taxes, but without
the privilege of using the property
to employ labor and make profits.

Only 156 — less than half — of the
industrial properties paid more
than $5,000 in property taxes. And
the bigger the property gets, the
more evidence exists that its taxes
are nothing short of a rip off of the
public purse. A Tribune study
earlier this year revealed that with
the new assessments, the assessed
values of industrial land was put at
half and often less, the assessed
value of an average east end city
lot. Canada Packers plant at 750
Terminal Avenue, for example,
was assessed at $6.00 per square
foot for its choice industrial land.
But an ordinary lot on East Charles
Street was assessed at $9.25 per
square foot. Canadian Forest
Products Eburne Mill, sprawling
over 18 acres of land on the Fraser
River, had an assessment of only
$2.90 per square foot.

Tronically, while Leckie and
Volrich rush to the aid of industry
with claims that it has been vic-
timized by the 1978 tax changes,
the report showed that industry got
off lighter than was predicted
would be the case when the city
council adopted Option A last year.
The city at that time figured that
the share of taxes born by business
would increase by 7.54 percent; in
fact, it went up by only 5.4 percent.

Why Leckie and members of

‘council didn’t cry on industry’s —

behalf when they set the rates last
year is a question not addressed in
the report.

It’s also a bit of chicanery to pose
Leckie’s tax proposal as an assist
to small business. When its all
worked out, industrial property
will also benefit by about $2.4
million at the expense of com-
mercial property, the vast
majority of which is small
business, and which will get an
average 3.7 percent tax increase.

Leckie’s report went to the city
finance committee, chaired by
mayoralty hopeful May Brown, on
Thursday. They will put a
recommendation on it and it will
then go on to city council, likely
before the end of October.

It could be a very poorly chosen
issue for the right wing on city
council whose partisanship to big
business will have a direct impact
on homeowner taxes at a time
when the politicians are falling
over each other to appear as
crusaders against high taxes. May

Brown in particular will be on the-

spot to make it clear which side —
homeowners or industry — she will
favor.

About the only consistent op-
position to the move that can be
expected will come from COPE
alderman Harry Rankin. But
Rankin has been carefully kept off
the finance committee and he
won’t get a shot at it until it
reaches the council stage.

As for Leckie, it may well tura
out that he too erred in exposing his
biases on the eve of an election.
Obviously a person with a muca
more objective view of financial]
matters is needed for such an
important city post, and that is en
anomaly of the present set up at
city hall not likely to ve overlooked
by candidates in the election
campaign. -

PACIFIC TRIBUNE—OCTOBER 6,1978—Page 3