RIBBON cutting at the opening of the Lakes District Hospital in Burns Lake in 2015. The province paid for 80 per cent of its construction costs.

RIBBON cutting at the opening of the Lakes District Hospital in Burns Lake in 2015. The province paid for 80 per cent of its construction costs.

Terrace, B.C. hospital build tax bite feared

Area residents could face paying for 40 per cent of $430 million cost

  • Oct. 18, 2016 12:00 p.m.

T’S one thing to convince the provincial government to build a new Mills Memorial Hospital, but it’ll be another thing altogether to pay for it – something that northwestern B.C. taxpayers could discover.

Using the standard hospital construction financing model in B.C., property owners from Haida Gwaii to Houston, the majority of them being residential property owners, would stand to cover 40 per cent of an estimated construction cost already pegged at $430 million.

That would amount to hundreds of dollars more per year coming from those property owners, estimate officials from the North West Regional Hospital District which extends from Haida Gwaii to Houston and which pays for major health care expenditures in its area through property taxes.

Even paying for 20 per cent of a new Mills would mean a substantial tax increase, hospital district information indicates.

The financial implications for northwestern B.C. taxpayers are contained in briefing materials used by hospital district officials in meetings with senior provincial officials.

Regional hospital district officials have been arguing for years now that northwestern B.C. property owners can’t absorb 40 per cent of the cost of a new Mills, saying instead that 20 per cent is a more realistic figure.

As it is, property owners within the regional hospital district have already seen their taxes jump substantially thanks to paying for 40 per cent of the $50 million just-opened hospital on Haida Gwaii.

And it’s the last time regional taxpayers can do so, says Harry Nyce, the chair of the regional hospital district who also represents the Nass Valley on the board of the Kitimat-Stikine regional district.

Using a baseline figure of $100, information from the hospital district predicts a dramatic increase in taxes if that same model was used for a new Mills with northwestern taxpayers paying 40 per cent and the province paying 60 per cent.

“If the line on your property tax bill for the regional hospital district was $100 before the Haida Gwaii hospital, it is now $182. If we rebuild Mills Memorial at a 20 per cent contribution it would raise to $277, or $387 at 40 per cent,” reads information from the hospital district.

“The current residential and industrial tax base of the northwest cannot absorb the increased tax levy that would result from the past standard 40 per cent contribution to a new hospital,” said Nyce.

“The northwest residents and its resources are major contributors to the province, some of this contribution needs to be returned by the province to the northwest.”

Even the prospect of large-scale industrial projects setting up shop in the region won’t guarantee the kind of tax revenue needed to support hospital construction, those materials indicate.

“The type of economic growth that is expected is not anticipated to have a reciprocal effect on the assessment tax base,” reads one document prepared in 2015.

“Mines do not increase the assessment tax base in the same way as pipelines have in the northeast. Mines typically have low assessment values attached to the property, and the equipment used for mining is not included in the assessment. A significant amount of the Rio Tinto Alcan modernization is equipment related,” it continues.

But there may be some relief for northwestern taxpayers, provided a new Mills is approved, as the province can, if it wishes, pay for more than its standard 60 per cent share of hospital construction.

That’s based on circumstances when health care facilities are built in places where there isn’t the kind of population needed to absorb 40 per cent of the construction cost, indicates information provided by the provincial health ministry.

This is what happened within the Stuart-Nechako Regional Hospital District when the Lakes District Hospital and Health Centre in Burns Lake was built.

“The Stuart-Nechako hospital district made a case to government that its tax base could not realistically support 40 per cent of the cost of that particular project,” said the health ministry in a provided statement.

The province then paid for 80 per cent of the cost for that $55 million health care facility which opened in early 2015.

Taxpayers within the Stuart-Nechako area are paying for 16 per cent of the construction and also paid for the hospital’s business case study which accounts for the remaining four per cent of the project’s cost.

Stuart-Nechako regional hospital district chair Jerry Petersen said it was able to make a persuasive argument for taxpayers to pay less.

“We have a small population with really no industry,” he said of that area’s tax base.

“To pay for 40 per cent would have been a lot for our small area,” he said.