Posts tagged real property
Universities in British Columbia own land of considerable value. Should that land be subject to property tax and a university be assessed like any other landowner?
The answer is found in s. 54 of the University Act (BC Laws):
(1) Unless otherwise provided in an Act, the property vested in a university and held or used for university purposes is exempt from taxation under the Community Charter, the Local Government Act, the School Act, the Vancouver Charter and the Taxation (Rural Area) Act.
(2) If land vested in a university is disposed of by lease to a college affiliated with the university, so long as it is held for college purposes, the land continues to be entitled to the exemption from taxation provided in this section.
The issue then involves defining what it means for a university to hold or use property “for university purposes”.
In Assessors of Areas #1 and #10 v. University of Victoria, the BC Supreme Court held (CanLII) that student union buildings owned by a university but leased to commercial tenants were held for university purposes and thus exempt from taxation. In the decision, the court considered buildings used by the student unions of UVIC and SFU, particularly portions of those buildings leased to commercial tenants, like Travel Cuts, fast food outlets, medical and dental clinics, etc. These are businesses designed to cater directly to students but they are distinct from other businesses owned and operated by the student unions.
Hence the question: are those portions of the buildings used by commercial tenants being held or used “for university purposes”?
In one corner, the Assessor argued that a university purpose involves academic pursuits or, at the very lease, those non-academic activities that are critical to facilitating academic goals. In the other corner, the universities and student unions argued that these businesses provide an ancillary benefit to students and form part of the multi-faceted elements of modern university life; in this way, the spaces in which they operate are being held for university purposes.
To interpret the meaning of the words “university purposes”, the court went back to the basics and discussed what it means to be a university:
Canadian universities today are multifaceted institutions that require a diverse array of services to advance their broad objectives. They operate in a competitive environment. In order to achieve their objectives and perpetuate as relevant institutions, they must reasonably service the needs and aspirations of their faculty and their diverse student bodies. Student and faculty recruitment and retention play a significant role in the success of a university. It is surely trite to observe that the attendance of students is the most vital component of a university; without them, a university is little more than a languishing collection of resources, vacant classrooms and idle professors. I agree with the Board’s remarks that student societies play an important role in assisting universities in recruiting students by contributing to a student’s enjoyment of university life in a variety of ways. To that end, universities need to provide more than the rudimentary features of higher learning; more than lecture halls and labs. Modern universities commonly have extensive athletic and recreational facilities, as well as facilities aimed at promoting social interaction among the students, the faculty, and the students and faculty together. As observed by the Board, universities also require considerable human support services such as housing, transportation, food services and health care clinics to reasonably attend to the needs of their students and faculty.
The court went on to reject a narrow view of the purposes of a university. Student unions are responsible for managing student affairs, and they are often granted space in buildings owned by universities for that purpose. Accommodating student needs frequently requires inviting commercial tenants to rent space and set up shop on university property. The court rightly saw this fact as a simple element of what it means to be a university today.