In the early 2000’s the Provincial Government of British Columbia quietly passed legislation that would allow municipalities more latitude in taxing not-for-profits. That possibility excluded the worship space of churches but not potentially the extensive parking lot which FBC Penticton provides as overflow for the Penticton hospital across the street. Nor does it include the “Out of the Cold” meal and sleep program space at Grandview Calvary and the list goes on. There is nothing wrong with the government seeking more value from their tax base. It was a little inept and some would suggest cowardly (I would be one of those folk) for the Provincial Government of BC to pass such a bill on a politically suicidal clause of not-for-profit taxation to mainly volunteer or minimally paid local governments. Canada Revenue Agency has been involved for years in probing and speculating on how they can create clearer guidelines for charitable groups.
Some of this is good, overdue and just good process which in turn forces many charities, including churches to be better at financial management. Some of this process is simply a short sighted cash grab which will continue to erode not-for-profit groups’ ability to provide services for the community that the government has stopped providing, shouldn’t provide or have no concern for those in need (everyone happy?)
From time to time I will share with you some of the research and preparation we are engaged in to responsibly respond to governments. Today’s piece is from Bill Mains. Some excellent work.
TAXING CHURCH PROPERTY IN BRITISH COLUMBIA
In 2003, the British Columbia Government implemented the Community Charter which addresses certain issues concerning the ability of local governments to levy property taxes on land and buildings owned by non-profit organizations, including churches. Churches located in incorporated jurisdictions in the province (ie. municipalities, villages, towns and cities) are governed specifically by Division 6 – Statutory Exemptions, Section 220 (1h) which states:
“Unless otherwise provided in this Act or the Local Government Act, the following property is exempt from taxation to the extent indicated:
(h) a building set apart for public worship, and the land on which the building stands, if the title to the land is registered in the name of i) the religious organization using the building ii) trustees for the use of that organization, or iii) a religious organization granting a lease of the building and land to be used solely for public worship”
This means that, by provincial statute, property taxes cannot be levied by municipalities, etc. on the church building set aside for worship and the land that such a building sits upon (the building foot-print). Other church lands (such as parking lot, sidewalks, lawns, landscaped areas, etc. will be taxed by the municipality unless an exemption is approved by the elected council of the municipality, etc.
However, Section 224 of the Community Charter sets out certain exemptions that a municipal council, etc. may approve if authorized in a bylaw. Specifically, Section 224 (1, 2a, 2f, 2h and 2g) which state:
“1. A council may, by bylaw in accordance with this section, exempt land or improvements, or both, referred to in subsection (2)from taxation (municipal property taxes), to the extent, for the period and subject to the conditions provided in the bylaw.”
“2. Tax exemptions may be provided…for the following: a) land or improvements that (i) are owned or held by a charitable, philanthropic or other not for profit corporation, and (ii) the council considers are used for a purpose that is directly related to the purpose of the corporation.”
“2f-2g. In relation to property that is exempt under section 220 (buildings for public worship), (further exempt) (i) an area of land surrounding the exempt building (ii) a hall that council considers is necessary to the exempt building and the land on which the hall stands, and (iii) an area of land surrounding a hall that is exempt under subparagraph (ii.)
The issue of levying property taxes on church buildings and properties recently came to the forefront in one BC municipality when it looked like its council would not approve the list of non-profits, including churches, to be tax exempt. Only much lobbying by churches and others in the community resulted in the exemption bylaw being approved by a 4 to 3 vote.
IMPORTANCE OF THIS ISSUE
British Columbia’s (and Canada’s for that matter) levels of government are facing increasing costs and demands to provided services to their residents. It is particularly a challenge to municipalities as their tax sources are very limited (property tax is the main source) and they see the costs of needed services (eg. police, fire protection, medical, environmental, streets, water and sewer, etc.) rising rapidly. At the same time, higher levels of government sometimes download services to the municipalities and/or do not support existing services with sufficient funding. And, local elected council members are closest to the voter and usually very attentive to the desire of their citizenry to have good services and yet, at the same time, keep property tax increase as reasonably as low as they can.
Therefore, it is not unexpected that these municipalities would consider trying to expand the existing property tax base. Provincial legislation in BC enables this possibility with the decision to be made at the local council level. Churches are a potential source of significant new tax revenue if required to pay taxes on the “non-church footprint”.
WHAT NEEDS TO BE DONE?
- First of all, CBWC needs to find out what the current situation is with our BC churches concerning exemption from municipality taxes. We need to contact every church in BC to find out if the church has had to pay property taxes. We also need to know whether church exemptions from taxes have ever become a political issue in their community.
- Secondly, we need to support and resource our churches as they focus and strengthen their mission to add to the “social capital” of their communities by advancing the teachings of Jesus Christ with respect to strengthening the spiritual, social, economic, and cultural dimensions of community. Such actions as helping people to grow in the knowledge of their faith, relieving suffering and poverty, advancing education, supporting people at all stages of their life cycle to continue to grow and develop, and generally “adding value” to their communities by bring overall human betterment to its citizens are laudable and bring specificity and visibility in what having a church in the community means.
- We also need to help churches to see the importance that their mission may need to be more outwardly focused into their communities. To help others “see Jesus” as we go sharing the faith and increasing the social capital of the place where we live.
- We also need to not “hide our lamp under a bushel” and share our stories of how we as CBWC churches are, indeed, making a difference in the quality of life in the community in which God has placed us.
Prepared by Bill Mains
Canadian Baptist of Western Canada
January 14, 2010