A Lesson from Parksville
A recent advertisement in the PQB news caught my attention. The ad was placed by the City of Parksville to notify not-for-profit organizations ("NPOs") of the upcoming deadline to submit applications for property tax exemption for properties used by the NPOs for non-profit purposes. The ad directed interested NPOs to the City's website to obtain a copy of the application to ensure that the the application met the necessary criteria. In this regard, the City's website set out the application form as well as the City's policy for permissive property tax exemptions.
By way of background, the Community Charter (the "Charter") provides for property tax exemptions for certain properties. Section 220 of the Charter deals with statutory (ie., mandatory) property tax exemptions for a range of properties such as those held or used by the province, a municipality, regional districts, libraries, cemeteries and places of public worship. For properties used for public worship, the statutory exemption is limited to the land and building used specifically for public worship. The remaining portions of the land and/or buildings are subject to property tax unless Council uses its discretion and grants a permissive exemption. As an aside, the Town of Qualicum Beach seems to grant full property tax exemption for the whole of such properties, regardless of size, notwithstanding the discretion permitted under the Charter.
The Charter also provides for permissive property tax exemptions for properties used by NPOs. The permissive exemptions are at the discretion of Council. There is no obligation to grant the exemption. To qualify for an exemption, the property must be owned or held by the NPO and, as determined by Council, must be used for a purpose directly related to the purposes of the NPO.
The City of Parksville has a policy for permissive property tax exemptions, the intent of which "is to identify the services and organizations which provide the most complementary extension of municipal services and for which the burden resulting from the exemption is a justifiable expense to the taxpayers of Parksville". Thus, the City of Parksville recognizes and acknowledges that the amount of the exempted taxes are passed on to, and shared by, the rest of the taxpayer base.
The City of Parksville policy contains a number of guidelines to determine whether a permissive property tax exemption will be granted. These include:
1. the need for the services provided by the NPO;
2. other funding sources available to it (an exemption may not be granted if no effort has been made to obtain other funding);
3. the use of volunteers to deliver the service;
4. exemptions are based on the principal use of the property, not on the charitable service of the NPO as a whole;
5. exemptions are only granted to the portion of the property that meets all of the requirements of the policy;
6. the exemption may apply to the whole or part of the land, improvements or both;
7. exemptions are not automatically renewed. A new application, together with the
NPO's most recent financial statements must be filed each year;
8. a property tax exemption is similar in effect to a cash grant and therefore is subject to budget considerations;
9. the NPO must be seen to be working towards self-sufficiency by seeking funding from other sources;
10. the exemption granted may be less than 100% of the property taxes;
11. the cap on tax exemptions for 2027 is $225,000.
The takeaway from the City of Parksville's policy is that the NPO must demonstrate need; there is no guarantee that the exemption will be granted; if an exemption is granted, it may be for less than 100% of the property taxes; an application must be made each year; and the availability of the exemptions to any one, or all, of the NPOs may be constrained by the City's budget.
Many other municipalities in BC have policies for permissive property tax exemptions. Some are stricter than Parksville in their application. The rationale for the policies is the same, however. Namely, the exemptions are discretionary and they pass on the exempted property tax revenue for payment by the remaining taxpayers. As a result, guidelines must be put in place to ensure that the remaining taxpayers are not being disadvantaged. The policies also, hopefully, provide a clear understanding to all as to how the exemptions will be evaluated and either granted, in whole or in part, or refused.
As mentioned, many municipalities have a permissive property tax exemption policies. Does Qualicum Beach? A search of the Town's website did not locate such a policy. In September, 2025 I was looking into the same issue and sent a letter to the Mayor and Council asking whether the Town had a policy. I did not receive an answer to my question. I can only assume that the Town does not have a policy.
In the absence of a policy, how, does the Qualicum Beach Council determine which NPO's should receive a property tax exemption? And, what is the process for an NPO seeking an exemption? The answer may be provided in the September 17, 2025 staff report from the Director of Finance when Council was considering the granting of the 2026 permissive tax exemptions. In his report, the Director of Finance stated that "as the list of exempted properties has remained largely unchanged; the Town has not required an annual application process." It appears from this statement that if an NPO received an exemption in the past, it will receive one in the upcoming year and, presumably, in the years to follow, without taking any action or doing anything. How does the Town determine that the criteria for the exemptions are still being met by the NPO? In the absence of any policy guidelines, at the least, Council must consider the criteria set forth in the Community Charter, namely, that the property is used for a purpose directly related to the purposes of the NPO. There was no evidence provided at the September 17, 2025 council meeting that this criteria was considered.
Why should we be concerned about the granting of property tax exemptions by the Town? The answer is perhaps also provided in the September 17, 2025 report from the Director of Finance in which he stated that exemptions granted for the 2026 tax year totaled "approximately $658,000 in foregone taxes, across municipal, school, regional district and other levies. Of this amount, approximately $305,000 - equivalent to a 2.3% property tax increase - relates specifically to municipal property taxes. These exemptions effectively shift the tax burden to non-exempt taxpayers." This is even more troubling because not only is the Town passing on the $305,000 municipal portion to the non-exempt taxpayers, it is remitting the balance of $353,000 to the other taxing authorities, passing on an additional $353,000 to be paid by the non-exempt taxpayers. Thus, the amount being passed on in total represents not just a 2.3% increase in property taxes, but instead over 5% increase in property taxes.
As mentioned above, Parksville caps its exemptions at $225,000. Based on Parksville's property tax revenue of approximately $20,000,000 this represents 1.125% of the revenue. In comparison, Qualicum Beach collects approximately $14,000,000 in property taxes. The $305,000 exemption on a property taxes revenue represents 2.17% of the revenue.
Annual property tax increases appear to be a foregone conclusion, however, Council has an obligation to ensure that the tax burden is shared fairly by all taxpayers. The initiation of a permissive property tax exemption policy with a proper application and evaluation process could begin to achieve this.
James Noel
June 9th 2026
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