Assessor for Port Alberni v. MacMillan Bloedel et al.

Attached hereto is By-Law No. 3036 passed by the Respondent pursuant to Section 427 of the Municipal Act and which by Section 2(2) levies a Business Tax in respect of the calendar year ending December 31, 1972, of

…either an amount equal to seven (7%) per centum of the annual rental value of the real property occupied or used for the purpose of carrying on such business, or an amount equal to seven tenths (7/10) of one per centum of the taxable value of personal property used by him in or on the real property for the purpose of the said business, whichever produces the greater amount of tax.

The Respondent issued to the Appellants 1972 Business Tax Assessment Notices with respect to four businesses in the City of Port Alberni owned and occupied by the Appellants, particulars of which assessments are as follows:

ASSESSMENTS

Business

Roll No.

Annual Rental Value

Taxable Personal Property

Alberni Plywood Division

200

275,000

1,875,911

Alberni Pacific Division

201

247,000

1,285,683

Somass Division

202

672,500

2,920,718

Alberni Pulp & Paper Division

203

4,576,500

25,765,425

The Respondent assessed the Annual Rental Value of each of the said businesses by:

(a) Doubling the assessed values of the lands and improvements for the 1972 General Assessment Roll in order to arrive at the actual value of the said lands and improvements,

(b) Applying a capitalization rate of Six Percent (6%) to the actual value of the lands and a capitalization rate of Eight Percent (8%) to the actual value of the improvements in order to arrive at the return which a prudent investor might expect to receive on such an investment,

(c) Adding to such return the amount of the 1972 real property taxes payable in respect of such lands and improvements.

For the purposes of the General Assessment Roll, there was deducted from the assessed values of the lands and improvements, the assessed values of those portions thereof used exclusively for pollution abate-

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ment within the meaning of Section 327(1) (p) of the Municipal Act, which deductions for 1972 were as follows:

ASSESSED VALUE OF DEDUTIONS UNDER SECTION 327 (1) (p)

Business

Lands

Improvements

Alberni Plywood Division

Nil

Nil

Alberni Pacific Division

Nil

18,500

Somass Division

Nil

38,740

Alberni Pulp & Paper Division

4,620

986,217

No such deductions were made from the assessed values of the lands and improvements for determining Annual Rental Value under paragraph 3 hereof.

The issues for determination on this Appeal are whether in assessing Annual Rental Value for the purpose of Section 427 of the Municipal Act:

(a) The assessor was correct in taking into consideration the real property taxes payable in respect of the lands and improvements in arriving at the annual rental value of the lands and improvements.

(b) The Assessor was correct in not deducting from the actual value of the properties an amount equal to the actual value of land and improvements used solely for pollution control, within the meaning of section 327 (i) (p) of the “Municipal Act”.

The Appellants appealed their 1972 assessments for Business Tax purposes on the said businesses to the Court of Revision sitting in the City of Port Alberni which appeals were dismissed on March 9, 1972. The Appellants served Notice of intention to appeal the assessments upon the Municipal Clerk of the Respondent and have brought this Appeal in conformity with and within the times limited by Section 362 of the Municipal Act.