BRITISH COLUMBIA

PORT ALBERNI — The
Court of Revision reserved judg-
ment Mar. !0 ona third party ap-
peal which charged that forest gi-
ant MacMillan Bloedel was gross-

~ ly under-assessed on its two tree
farm licences (TFLs) in the area.

School trustee Gary Swann
launched the appeal following the
action of the B.C. Assessment
Authority in reducing the assess-
ment dramatically on the two
TFLs — from $177.50 per acre in
1980 to $78 per acre last year.

Swann emphasized that the re-
duction in assessment ‘‘is com-
pletely unjustified due to growing
timber demand, undervalued
stumpage appraisal and the lack
of a price escalation factor.”

Under the assessment system,
the value of tree farm land is de-
termined on the basis of the cur-
rent value of revenues expected in
the future. The value of the tim-
ber is estimated from current
B.C. Forest Service stumpage ap-
praisals which, in turn, are based
on prices for logs traded on the
Vancouver log market.

But that system has ‘‘critical
shortcomings,’’” Swann empha-
sized.

He cited statements by J. J. Ju-
hasz, head of appraisals for the
Forest Service that the Vancouver
log market ‘understated log val-

Ptr

» o«

GARY SWANN ... tree farm
assessment should be increas-
ed fourfold.

ues for the four major log
species.”’ Because the logs are un-
dervalued, the stumpage apprais-
als are low — and the assessment
based on that appraisal is also
low, Swann said.

In addition, the assessment sys-
tem makes no allowance for in-
creases in prices. ‘Considering
that lumber values have been es-
calating at 13 percent per annum
for the last decade, this lack of a
price escalation factor is indeed a
generous concession to the forest
companies,”’ he said.

He told the court that the B.C.
Assessment Authority ‘‘is syste-
matically underappraising TFL
assessments.

Mac-Blo tax break challenged

“This . . . shifts the burden of
taxation from the large forest
multinational to the home-
owner.”

In fact, he argued in his sub-
mission, the value per acre should
be closer to $300 per acre — based
on current prices in the U.S., and
on what the forest companies
themselves have been prepared to
pay for cutting rights on tree farm
land.

The U.S. case is revealing, he
said, because there, unlike the sit-
uation in B.C., forest companies
must bid competitively for timber
rights, thus establishing a market
price for those rights.

When that U.S. price is con-
verted to Canadian dollars and
calculated on the basis of the tim-
ber-growing ability of MacMill-
an Bloedel’s TFL, the value per

acre works out to about $292.

But there are other examples
closer to home, Swann said.

He cited the case of the sale of
Rayonier’s assets to B.C. Forest
Products in 1980 in which the
main asset was the timber rights
on Crown land. In that sale, B.C.
Forest Products paid $300 an acre
for the timber rights.

And currently, the Victoria
Water Board sells timber from its
small TFL. Its prices, applied to
M-B land, indicate a value per

acre of $360, he said.

“T have established from three
separate sources a per acre value
ranging from $292 to $360,”
Swann argued in his summation.

“T request that the current
value of $78 per acre be increased
four times to $312 per acre,’’ he
urged, adding, “‘there is more
than enough evidence to support
this increase.”

Although judgment was re-
served, court chairman Ed Hodg-
son indicated little support for the
appeal, suggesting to reporters
that Swann ‘‘didn’t understand”’
that stumpage values were down
because of depressed markets for
wood.

Significantly, however, al-
though. the market is in a slump,
prices have not fallen. And a re-
port from Pemberton Securities,
which Swann appended to his
submission, stated clearly that
world-wide shortages of timber
would continue to push prices up
in the years ahead.

Despite that report, M-B is
clearly using the market slump to
press its bid for reduced assess-
ments on tree farm land.

M-B has itself launched an ap-
peal against its assessments on the
two TFLs for the previous two
years, claiming that they were too
high.

Socred government ‘created monster’
with new education finance

““SAlthough it will result in tax
reductions for many homeowners _
this year, the new education
finance formula announced Mar.
11 by education minister Brian
Smith is a ‘‘monster’’ that will pro-
_ duce even more inequities in the
future, B.C. trustees have charged.
_ And equally bad, the assump-
tion by the province of the respon-
sibility for school taxes on in-
dustrial and commercial property
will result in greater centralization
Of education and a loss of local
Schoo! board autonomy.

The new formula announced by
Smith calls for the province to
assume 60 percent of all school
Operating costs. Five percent of the
_ Temaining.40 percent will be borne

by the local school board and the.
last 35 percent will be shared by the
Province and the board according
to. a complex formula based on the
total property assessment roll and
the number of students in the
district.

Under the formula, the province
assumes responsibility for non-
residential taxation — on commer-
Cial and industrial property —
much of which will go to paying the
Provincial portion of the shared 35
Percent.

The new formula applies to
Operating costs only, however. The
‘Other school board expenditures in-
cluding non-operating, debt and
non-shareable capital costs — the
So-called G H and J accounts —
will presumably continue to be
shared as before.

But under Smith’s new regime,
boards will have only the residen-
tial property tax to raise their share
__ Of the costs, forcing homeowners
to bear the entire burden that
formerly was distributed among
residential and non residential tax-
_ payers.

The 35 percent shared portion

Could also pose future problems for
School boards. The sharing is sup-

‘in school taxes in 1
1981. That will still result in some

‘posed to be based on the residential
‘assessment roll in any district,

divided by the pupil enrollment and
applied against an “‘equalization

‘index’. But the statement prefac-

ing the formula states that, in
calculating the amount, boards
must first find out ‘‘the total
amount of provincial money
available for distribution in the 35
percent shared portion.” ©

In other words, the provincial
government has already determin-
ed to impose limits on the amount
“available” to be shared, opening
the way for more government
chiselling.

“This is a political charade,”
B.C. School Trustees president
Gary Begin charged Mar. 12 in re-
jecting the new education finance
formula. He said the government Is
attempting to use “statistical
distortion”’ in an effort to convince
taxpayers that the government 1s
bearing more of the costs. =

“This government’s integrity 1s
nothing short of astonishing,’’ he
said. “Brian Smith is proudly pro-
claiming that the province will pay
75 percent of public school
operating costs. This couldn’t be
further from the truth. In fact,
Smith’s formula gives no relief for
homeowners.”

According to the BCSTA,
homeowners across the province
will pay an average 44 percent more
982 compared to

tax savings for some urban districts
since the extra money will be oe
ing from those districts in outlying
anes which have traditionally had
anet school tax bill of zero after the

a “shell game’, warning that
homeowners will be s
cent of operating cos
non-operating and non-shareable
apital accounts.-
“AIRCSTA officials estimated total

no
bargain for the public in new
formula.

PAULINE WEINSTEIN ...

school costs for 1982 at $1.76
billion. Of that, residential proper-
ty tax is expected to pay 15 cents on
every dollar as compared to 13
cents last year.

“Once again it seems necessary
to reiterate the need for govern-
ment to pay a more equitable share
of education from general
revenue,”’ he declared.

Vancouver School Board chair-
man Pauline Weinstein noted that
parents and homeowners in Van-
couver had been instrumental in
forcing the government to move to
change the old, grossly inequitable
financing formula.

She added, however, that the
government ‘‘has created a
monster with its new formula.”

Although Vancouver taxpayers ~

» will probably get an average $45
saving in school taxes this year, she
said, ‘‘there could well be tax in-
creases in future years.

“yen the ministry officials
can’t tell what they expect in 1983,”
she warned. —

formula

In any event, she added, ‘‘any
finance formula based on the
assessment of property can’t be
equitable.”’

Weinstein agreed with Begin
that the formula is a political ploy,
noting that the government hoped
to divide boards between those
which reaped some benefits and
those who would pay, and to direct
homeowner anger over any future
tax increases at local boards instead

of the provincial government.
She also emphasized that the
new formula is inextricably linked.

j _ tothe provincial government’s pro-

gram of budget restraint.
By centralizing the financing,

~and taking over the commercial

and industrial tax base, the provin-

cial government will be able to im-«

pose its budget ceilings directly.

And since boards will have to go
directly to residential taxation to
raise money for any special pro-
grams and for non-operating and
non-shareable costs, they will be
seen as being responsible for tax in-
creases.

On the other hand, the provin-
cial government has already hand-
ed a favor to industrial and com-
mercial property owners. The max-
imum mill rate has been set at 55
mills which is a decrease in 49
districts. For the other 26 districts
where the mill rate is already lower,
the rate has been frozen at 1981
levels.

In rejecing the new formula,

_ Weinstein emphasized that boards

should be united in their opposi-
tion.

“The ministry is already trying
to play one board off against
another,”’ she said. ‘‘If we fall for
that, we’re defeated before we

“As far as we’re concerned, if
this formula isn’t good for one

district in the province, then it’s no

good for the whole province.”

Students
protest

cutbacks

More than 1,000 students
from Lower Mainland campus-
es joined by faculty and staff
representatives marched
through downtown Vancouver
Mar. 12, capping a week-long
national protest against govern-
ment cutbacks to post-
secondary education.

Shouting the familiar chant,
“They say cutback — we say
fightback”, marchers moved
from the Queen Elizabeth plaza
to rally at Robson Square in
protest against intensified
federal and provincial cuts to
education budgets that
demonstrators said will create
more unemployment and
threaten Canada’s future.

Student representatives from
outside the Lower Mainland
also reported activities on their
campuses, all part of the Cana-
dian Federation of Students
‘‘week of action’’ protests
across Canada.

Rally speakers denounced the
Bennett government’s cuts and
also criticized some college and
university boards for their will-
ingness to hike tuitions and cut-
back on services instead of join-
ing others in the mounting pro-
tests. The crowd cheered as they
heard representatives from the
B.C.. Teachers Federation, the
College and _ Institutes
Educators’ Association, the
Association of University and
College Employees and the
Canadian Union of Public
Employees, which co-sponsor-
ed the demonstration together
with CFS.

‘We are here to talk to the
public. We are marching to pro-
test four years of Socred cuts to
education,’’ demonstration
organizer and UBC student
Gene Long told passers-by dur-
ing the march and rally.

“It’s time to tell the rest of the
community we’re not going to
take it any longer,” said CFS
Pacific Region chairperson
Sophia Hanafi, who said educa-
tion funding had become a}
‘‘political football’’ in disputes |
over federal/provincial cost
sharing agreements.

Organizer Nick Witheford
and Bill Tieleman of UBC’s
Students for Accessible Educa-
tion both attacked provincial
government mega-projects such
as the Northeast coal
“giveaway’’ for siphoning | —
funds needed for education and | —

College said federal and provin-
cial education cuts will slash job
training programs and deny
women access to higher paying
employment. 7
“Thirty thousand teachers
endorse your week of protest,”
said BCTF president Larry
Kuehn, who said education cuts

the Socred government’s in-

PACIFIC TRIBUNE—MARCH 19, 1982—Page3