New wording has been appearing on land appraisals, what does it mean?

0:00Hello and welcome to the Jill Venetio podcast. Today, we take a look at some new language that is being used on some property assessments in BC is this causing more uncertainty and the ongoing debate on the future of the George Massey tunnel crossing, the current government saying they are full speed ahead with the tunnel replacement, but there are still many, many questions. And how a small community in BC facing a huge property tax increase is dealing with that. They got quite creative. That's all coming up on the Jill Venetio podcast. We are starting though with what is a relatively new development in the real estate world. And some questions are being asked about some new language that is being added to some property assessments. Some assessments are now having a line on it saying that a property is not subject to a land claim and is being valued as if it were unencumbered.

1:03And it's the wording of this that is raising these questions, especially given the Cowachan tribes court decision in BC Supreme Court and the agreement between the federal government and the Musqueam, the Musqueam First Nation, that agreement involving Aboriginal title for a portion of Metro Vancouver. Just before we get to my first guest, I want to play for you some or one question that was put to Spencer Chander Herbert. And Spencer Chander Herbert is the Minister of Indigenous Relations and Reconciliation. He was asked about this earlier today in the legislature. Yeah. I guess I'd say the position of the BC government going back to probably 1988 has been private properties not on the table. And we're not negotiating private property unless there's a willing seller and a willing buyer. So that hasn't changed. And I think nations actually have been quite vocal recently to be clear that they're not coming after people's private property that's not their intention, that we all have

2:07to live here together. And certainly they don't want to do to people what was done to them where they were evicted from villages had villages burned down and things like that. That doesn't lead to reconciliation if you do it the other way around. And for a nation, people probably understand that better than anybody. So I think we do have to work together where you've obviously got a province where there aren't a lot of treaties, there should have been. And that does create legal issues that we have to sort through and that's why I'm leaning into building treaties, building agreements so that we absolutely have that certainty on the land base and that people can continue to live happily in their homes just as they are today. Well, joining me now to talk more about the language that is appearing on some of these assessments is Paul Sullivan, a partner at Ryan, ULC. That is a global tax and software, software firm. And Paul Sullivan has joined us before talking about the real estate industry, what's happening when it comes to real estate to NBC. And Paul, thank you for coming back on the show.

3:07Hey, good afternoon, Jill. Good afternoon. This was something that was recently brought up by a development officer in one of the better known companies in BC, West Group properties saying there was an appraisal on a piece of land. And the language on this appraisal, it said we assume the subject property is not subject to a land claim and they are valued as if unencumbered. Is this something new that we're seeing as part of assessments? Well, yeah, I mean, we're talking about appraised values. And what appraisers do is they work within their expertise, which is the valuation of real estate. When we put in a limiting condition in a report, it's because assumptions are being made outside of our expertise and that might be contamination. It might be geotechnical or some other issue. And the new issue that's coming up now is, well, what about this Aboriginal title and as an appraiser, I might not be sure whether the properties are subject to a claim.

4:09There's a lot going on behind closed doors. And perhaps if they are subject to a claim, then we have this, what the courts have said is an Aboriginal title, which is a prior and senior right above the fee simple interest. And frankly, that's just a situation that appraisers are going to struggle with. There's no market evidence available at this time as to how that affects the value because nothing is selling that's in these claim areas. So this is a risk issue for appraisers. If they can't have certainty on title, then they must make a disclosure that the assumption is that they're not subject to any claims and order that appraiser has removed their liability on such an uncertain situation. How are they able to do that, though, because one of the other questions that was put during that scrum and the legislature earlier today, again, with the Minister of Indigenous Relations and Reconciliation. He was asked, how many of these claims are there currently making their way through the

5:10court system? And he didn't have an answer, or if he did, he didn't give an answer, he didn't give a number. He said that the preferred way is to do things outside of the court system, but he didn't give an answer. So how are appraisers even able to do this if we don't actually know how many of these claims are currently before the courts? Yeah, Jill, and I think that's exactly the point. It's the uncertainty that's creates the risk, and risk is what affects the value of real estate. And that's why this situation around the Cowwich and Case and other agreements are creating risk. But the problem is it's not quantifiable because we don't know how to adjust property valuation for this new risk in the marketplace, and look, it's not all that new. In 2019, when Andrip appeared in British Columbia, appraisers in my office were coming to our staff meetings and going, what about this Andrip thing? How does that affect the value of properties?

6:11And we started putting in disclosures several years ago, but now it's become an industry norm. And it's become a point that the appraisal institute of Canada has taken notice, and now it's going to probably get standardized as a standard limitation, because at this point, nobody knows to what extent value has been impacted. You mentioned something as well that this came about because nothing is selling or moving specifically the lands enrichment that fall under the Cowachans, the BC Supreme Court ruling about the Cowachan lands. But is it something that's happening throughout the province, or is it only happening, say, in the Cowachan lands area, and now perhaps in the area of Metro Vancouver with the agreement that's covered in the agreement between the federal government and the Musqueam? Well, let's deal with that in chunks. Cowachan in that land claim area, nothing is selling. It's unsalable, okay?

7:11Metro Vancouver, as it's impacted by this new federal sort of fisheries agreement, you know, things are trading in Vancouver, are people investing in major redevelopment sites where there is a potential of a claim, absolutely not. Our clients have all stepped away from the marketplace, not only because of the little land claim issue, but the general stated the economy and the debt and the forecast for the future, like the real estate market is in trouble in British Columbia. So that said, there is a general level of uncertainty around the land claim issue to the extent that we're going to see professional valuators putting this disclosure in there because they don't want the personal liability of not knowing what's going on and writing the report that ends up in a claim situation and potentially worth a lot less than they have scribed in their valuation, right? And you mentioned UNDRIP, the United Nations Declaration on the Rights of Indigenous People,

8:16and that this actually started once UNDRIP was adopted. So is this something then, because I think there's this idea that it's new because of these, both the court ruling and the federal Musqueam Agreement, but it sounds like you're saying though, this actually started back when UNDRIP became an issue, became adopted in BC. Well, you know, professionals and valuation need to be on top of these issues. The appraisal Institute of Canada needs to be on top of these issues, and a good appraiser would have an instinct that there's something that had to be considered here, however the market hadn't reacted to it. And frankly, it really wasn't until the Cowwich and Decision, and in fact, it wasn't until Mayor Brody put out his letter to owners saying, hey, guys, your property rights and value may be impacted here, and the media grabbed a hold of it, suddenly it became known throughout society, if you like. And now it's known to the extent that it's common knowledge.

9:19And that is going to be an impact on value, because you can imagine when it's not common knowledge, you can still have market participants coming in and buying properties. They didn't know anything about it, because it hadn't got to the media, and people are buying with a sort of a naive perspective on an issue that was about to blow up and did blow up. What about the comments, though, that are coming from many of the Indigenous and First Nations leaders saying that private property is not on the table, that they are not coming for private property, and that is not part of these agreements, whether it's they're asking for compensation from government. Many of them have said repeatedly, we are not coming after private property rights. Does that make any difference when it comes to, again, this language for assessments and the uncertainty? Well, I'm glad to hear some of that discussion coming up. I think that the nations should come together and publish some position papers on that specifically.

10:22I'm a little uncomfortable when there's always the caveat in these discussions that say, and the crown can negotiate on your behalf on a settlement with regard to any claim we may have. So now, it seems to me that the burden of the claim issue to fee simple land has shifted to the province or the feds, and as a property owner, I guess I'm hoping they're going to sort it out, because unless it's sorted out, it appears I'm not able to sell my property. It's unknown territory we're in, and that's risk, and risk creates value implications, and that's the situation we're in. It's going to take quite some time for the Cowachans case to make its way through the court, and as many have predicted, it will likely go to the Supreme Court of Canada. So are we going to be living, do you think, in the state of uncertainty throughout that? 100%. And, you know, I guess what people like me, I've got property tax appeals filed on hundreds of properties and billions of dollars of real estate, and my clients aren't happy, and

11:26they're not happy to be paying property taxes on a value that they don't think is obtainable anymore, and frankly, we're going to wait, and there will be a sale sooner or later because somebody's going to have to sell, and that sale price I suspect is not going to be what it was a year ago, and then the evidence is going to start to appear. It's going to be because people must sell, not want to sell, and that's when we're going to start to find out what the real market value in the situation is. We will stay tuned, and see what happens next. Paul Sullivan, thank you for coming on the show, and for talking more about this. I appreciate you making the time. It's my pleasure, Jill. America leads the world in medicine development. It matters. We get new medicines first, nearly three years faster. Five million Americans go to work because we make medicines here at home, and not relying on other countries keeps us safe. But China is racing to overtake us. Will we let them, or will we choose to stay ahead?

12:26When America leads, America cures. Let's go to Washington to keep us in the lead. Learn how at AmericaCures.com, paid for by Pharma. Spring is here, and the shopping list is long. Time to make a blows run. Buy three bags, get three free of stay green, one cubic foot garden soy. Plus, right now, members can earn four times the points on an eligible purchase. Start spring off strong with these deals and more. Our best lineup is here at Loves. Valentine 325, while supplies last. Soil offer excludes a last-gen who-why. Lowell T-Program subject to terms and conditions. See Loves.com slash terms for details. Subject to change. Point booster subject to exclusions and more terms apply. One time we'll only offer. We have been talking a lot this week about the future of the George Massey Tunnel, specifically the Tunnel Replacement Project. What is going to be done? How much is it going to cost when might it be done? Just before we get to my next guest, I want to play for you a little exchange. This was between Mike Smith and the Transportation Minister, Mike Farnworth, who joined him on

13:29the show today to talk more about this. Two of the things they talked about, the timeline, well they talked about a lot of things, but I think the two that are really sticking out to people, the timeline for the Tunnel Project, as well as the cost and no number on the cost that is still being worked out. I think we can all agree. It is not going to be the original projection for the project, but take a listen to what the Transportation Minister said about what the timeline is looking like and one moment here. Here we go. The timeline of this thing, let's talk about the potential completion date. When this was announced years ago now, they were talking about 2030, right? Is that still the timeline to get this thing done? What we're currently in negotiations right now is with the Cross River partnership that is building the tunnel in terms of what the final timeline will look like, and that's some of the work that's currently underway.

14:31I think we all want to see it done as quickly as possible, and we'll have more to say on that once that agreement has been reached. Okay. What about 2030 though? That was the original timeline. Yeah, no. Is that another window? No, no. I said that is the original timeline, but parcel is, that was at the beginning, and what we're seeing right now is the pre-work that's being done, and there's been a significant amount that's already been done, and working with the Cross River partnership who are actually building it in terms of exactly what will the final timeline be, and that's currently under negotiations. No, it won't be 2030. Does that make it? No. Does anyone believe it will be 2030? Absolutely not. Well, my next guest is Ian Payton. He is the BC Conservative MLA for Delta South, the Ian Payton. Thank you for coming back on the show. Yeah. Thanks. Good afternoon, Jill. What goes through your mind when you hear that exchange, because again, I don't think anybody was thinking this thing would be done in four years, but the fact that there's

15:32not even a new timeline out there, and that answer to that question. Well, Jill, I'm in Victoria now in the legislature, and on a daily basis, I'm seeing this NDP government are losing the grip on running this province, and this is another example of just another botched infrastructure project. I mean, let's go all the way back to 2017 or 2018, when they basically said, look, we don't want the bridge anymore. We're going to go ahead with a tunnel, and I mean, we've been sitting around waiting for what, nine years, and here we are, nine years later, and they still can't tell us when it's going to be completed, or how much it's going to cost to build this tunnel. He also asked him about the cost. And I think he even played your previous comment on this saying that the cost could be as high as seven possibly even eight billion dollars. The transportation minister didn't deny that.

16:32So do you know, do we have any better idea on what this is going to cost? Well, like I said, as far as this government losing grip on things, they're $180 billion in debt right now for the province, $13 billion deficit. They have no money for project. I'd be surprised if this project even gets going. They're pulling back even on the Delta Hospital Expansion project right now in my writing for long-term care. I can't see them moving forward with this tunnel project. And honestly, I've talked to several people over many, many years that said, this thing is now going to go probably closer to $7 billion. And they're still telling us, well, we think it's going to be $4.1 billion and it's going to be completed in the year 2030. What a bunch of hogwash. Is it possible they're doing some creative math in saying that the $4 billion that was the

17:32projected cost? Maybe that is what's going to be spent by 2030 and then there might be a creative way. Because obviously it's not going to be done, but a creative way of continuing the project from there, because it does seem like when trying to get any sort of concrete answer to either of those questions, one just doesn't exist. Well, you know, every year, just about this time of year, Jill, literally a few weeks back, as they come out with the budget, the provincial budget. And how many years in a row, there's no change to it. They're not giving us any update on what they feel the cost of this tunnel is going to be. But you know, when we spoke with Mr. Mike Smith, which I was on yesterday, I mean, the environmental issues of, you know, Mr. Farmer says, well, there's dredging on a daily basis. Well, I agree with that. They dredge a little bit off the bottom of the Fraser River for shipping, but they certainly don't go down 50 feet into the bottom of the river to build a new trench for this concrete

18:35tube to go in. So that was very surprising. Mike Farmworth also said that this idea of going back to a bridge is not even on the table, that it's not what the region wanted, that there has been all of the work done. And as people will know, if you've been in that area, you see the trees that have been cleared the work that is being done right now. He said that is absolutely not on the table that the tunnel project is going to move forward. How do you respond to that? Well, I mean, all I could say is long as the NDP's in government, I guess they're calling the shots, and I still go back to October of 2019 when they actually went to a group of municipal mayors, including the mayor of Richmond, Burnaby, Coquitlam, Delta, who put together a task force, and the government said to these mayors, you decide for us whether you think it should be a tunnel or a bridge. And that's when it came down with these mayors who said, oh, we prefer to see a tunnel rather than a bridge.

19:36And if we'd gone ahead with the bridge that was already in progress back in 2017, the bridge would have been open three years ago. The original project, though, and I'm guessing this could be dealt with because we've seen it on other bridges, the Portman and the Golden heirs, the original bridge project, that 10 lane bridge. It was a toll bridge, so would there have been a way to deal with that because it seems like given the environment now with taking the tolls off those other bridges? We can't just smack one toll bridge in the region. No, well, you know, Jill, the thing about the George Massey Tunnel, I can remember as a child in the back seat of my dad's car, paying a toll in 1960 or 61 to go through the newly minted George Massey Tunnel. It was a toll tunnel. But politically, you know, that just doesn't happen anymore. And you know, of course, if it was to go ahead with a tunnel or a bridge under a new government

20:38by us, there wouldn't be any tolls on the bridge. And do you have any idea what the price would be? And again, the minister said that that's off the table, that it would be ridiculous to go back, or I don't know if he used it, he didn't use the word ridiculous, but basically said there was no plan, they're not going back to start from scratch with a bridge. But obviously, it wouldn't be the same cost as what the original bridge was costed at. Is there any idea what that price tag would be? Well, like I said earlier, Jill, you know, I've had people in the financial business. Even Mr. Dawn Filps, a retired engineer that was extremely intelligent speaking last week on the Mike Smith show, he said this thing's going to go likely to about $7 billion. And I mean, it's laughable what Mr. Farndworth had to say. He's blaming it on COVID, he's blaming it on inflation, he even blamed it on things that are happening in the Ukraine that this tunnel project hasn't gotten underway.

21:44You know, give me a break, please. So what do you see happening at this point, then, is the work is obviously continuing, some of the clearing, the work that's being done on the ground in Delta. The minister saying it's going forward, even though at this point we don't know the timeline and we don't know the cost. So what do you say to residents of Delta and residents of Surrey, anybody that uses that crossing? Okay, so Jill, that's a great question because first of all, the environmental assessment has not even been approved yet by the province for this project, for this tunnel. And yet as you drive through this into the tunnel, from Delta side over to the Richmond side, you can see probably four or five acres of complete deforestation of trees on D's Island Park, which is a Metro Vancouver Park. How would people like that if we saw that happening in Stanley Park? The other thing that I would like to say is he keeps saying the people overwhelmingly in Richmond and Surrey in Delta were in favor of a tunnel over a bridge. That is the craziest thing I've ever heard.

22:45I mean, if you go back to every CKNW talk show I've been on over the years, and people who call in, 95% of the people that have called in over the last seven or eight years that I've been on your programs have said we're totally in favor of a bridge, let's get on with it. Ian Payton, we will leave it there for today. Thank you for coming back on and talking more about this. I know it's not the last that we will talk about this project, but appreciate your time today. You're most welcome, Jill. Thank you. What we often talk about property tax increases, we've certainly spent a lot of time talking about the Metro Vancouver, the North Shore wastewater treatment plant. That project is billions over budget and residents throughout the region, especially those on the North Shore are going to be paying a lot more in the years to come. But this is a story about a big percentage hike when it comes to property taxes, but

23:45how a village is taking a bit of a creative approach on how to deal with it. We're talking about the community of say word and the fact that the draft budget includes a 42% property tax increase. That means hundreds of dollars more per year for the average homeowner. So what is being done to deal with this? Joining me now is Gerald Wally, Strathcona Regional District Area A Director to talk more about this. And Gerald, thank you for being with us. You're welcome. Before we get into the increase and what is being done about this, can you describe say word for listeners for people who aren't familiar with where it is and the size, what say word is all about? Yes. I am an area director for the electoral area A, which goes from Johnson Street, right to north of Campbell River, all the way across to the Pacific, to the community of Kayuket over there, and then north of the village of say word. So the village of say word is just north of the say word valley, Salmon River area.

24:52All right, and how many people live in say word? Well, say word encompasses two distinct communities. In the village of say word, I would estimate there may be 300 people. In the say word valley, there's probably maybe 400 or a few more than that. The say word valley is an electoral area. Okay. The village of say word is a incorporated municipality. All right. So how did we get to the point then or how did the village and the area get to the point where here's a draft budget and it's looking at a proposal of a 42% property tax increase. Yes. As I understand it, that's 42% of direct tax increase, but if you add their increases in services for water and sewer, that brings it up to a little bit over 50%. So the math of tax height, the reason for it is that over the previous number of years the village council has used up all the reserves on funding the shortfall from taxation to

25:54meet their budget objectives. And now they run out of reserves and they have no choice but to increase taxes. They're in a survival mode. I thought I had seen as well that there have been some legal issues and there have been some other things that have been happening in council and that that has been expensive as well. Well I've heard that there are. Now I'm not a member of city council, but what is reported to me is that yes, there have been some extensive legal costs. They believe that they have a 225,000 in their 2026 budget and other 125,000 or so in their 2027 budget for legal fees. And what the residents of the villages say word are proposing is that they dissolve the village and join the electoral area and then let the village be run by the regional district, the track corner regional district. And is that a pretty bold move or is that something that is rare?

26:54It's rare. It hasn't been done since the 1920s and yes, it's a bold initiative, but there's a lot of people that don't have the income to fund this tax increase and they're concerned. They don't have any other options. What would that do to the community? If they dissolved that and became part of the electoral area and did that. How would that change the community? Well, how that would work is they instead of having a mayor of council, the electoral or director that is myself would run their affairs. I would set the village boundary up as a special service area. So those residents would continue to pay for their water and sewer, but all their other costs or most of the other costs would divert the electoral area. Now, it would be a benefit to electoral area because more people paying into that same service that the electoral area residents pay would reduce our costs. It would also reduce their costs and I could give you one example, for example, planning.

27:57My electoral area pays about $52 a year in planning. They pay about $125. So if they came into our planning department, their costs would go down and ours would go down a bit too because there'd be more people paying for the same service. Are there any downsides that you can see to doing this? I'm not aware of any. The province would pick up their road and snow plowing costs, so that would be a benefit to them. They have a massive complex called the Kelsey Center, which is very expensive to run. It's been shut down for a while. They only maintain their village offices and council chambers in that building, but they have to hit the entire building. I think it runs around 80,000 just to keep the vacant building basically running and it certainly would save those costs as well. So, but with these, if nothing changes and the residents of Sayward are seeing this huge tax increase, again, the 42% or like you said, in some cases, close to 50% hundreds of dollars that it would cost residents that don't have that money.

29:00Where does the shortfall go if they were, if they unincorporated and then they became part of the electoral area? Would the electoral area, though, then be on the hook for the discrepancy or the fact that they appear to have some financial mismanagement from the past few years? Does that become the problem of the electoral area or can you deal with that? I don't believe so, but they have put together a petition which has the majority of the residents of that village have signed and they're going to send it to the province. The province will come up and hold discussions, I expect, to tell them what the benefits and the decimates could potentially be. But no, the costs and the debt that the village currently incurs wouldn't be passed on to the rural area residents. That's why I would set up a special service area. They would retain those costs. However, the regional district could borrow the money that's required and amortize it over a long period of time and reduce their cost to a reasonable rate. When you add in their sewer and water services, I think the costs are well over $800 increase

30:01in taxes for the average resident in the village. That's a lot. I did a lot. So would the mayor, if this was to happen, would the mayor and council, would they see out their term or would they effectively be fired? Well, I don't expect any of this would happen quickly. Governments aren't going for being awful fast. True. So I would expect that it would curb probably over a period of quite a few months, so I'm not sure. If they dissolve, there would be no future mayor and council. So you mentioned the province will come up and have discussions with residents. That's right. Is it the province's decision then who makes that final decision on whether or not they dissolve? Well, you're asking me a question. I don't honestly know the answer to, but that's why we need to promise to get up here and talk to both the village and the valley and see what the options are. All right. We need to have the information to make an informed decision. Otherwise, it's basically speculation in here, say, and you can imagine the information that goes on the internet.

31:03Oh, for sure. And I don't know where he's not knowing the answer to that, because like you said, this is something that hasn't happened since the 1920s. So I'm not surprised that we're not all up to speed on what happens when a community wants to do this. Exactly. What does it say, though, do you think about the fact that this didn't happen overnight? This is something that's been happening over a number of years, whether it's the legal costs and the community spending more than it's bringing in. What does it say, I suppose, about oversights or about the fact that this was even able to happen? I don't know what to honestly say about that without being a little bit overly critical, but I think anyone who managed the budget of their own household realizes that you can't live off borrowed money from your credit card, you have to spend what you earned. Well, in that's the case, then the current government might not be the best one to come in and sell that rule to live by, because I think we can see what's happening at a

32:06provincial level. But again, this obviously isn't feasible for the residents of Sayward. So like you said, probably more discussions of a few months at least. And will it be a relief, do you think, then whatever way this goes, will it be a relief that at least something is being done? So this expenditure, the expenditures and such won't continue. Yes, there has to be a resolution to this, because the infrastructure that village, it was a company town where it was originally constructed, and the infrastructure is well over 50 years old, and everything in the world wears down breaks eventually. So they need to have reserves, funds, and store just to keep their services going. So yes, they have to sell this wrong. I appreciate so much, Gerald, that you joined us and brought us up to date on this, because even though it's different from what's happening, obviously, in other communities, that common thread of taxes going up, mismanagement at certain levels, that certainly is something that people can relate to. So thank you for joining us, and I'm sure we'll talk to you again when there's an update.

33:10Thank you, you're very welcome. Thanks for listening to the Jill Manageo podcast. Can't wait for the latest episode to drop, tune in to the Jill Manageo Live from noon till three on 730, CKNW. Have a question or comment, send me an email, Jill at CKNW.com. Thanks again for listening. Hello there. Thursdays on Global. I'm Madeline Matlock. She's the lawyer with a legendary name. Don't underestimate this Matlock, this one is a shark. You know it, baby. The one you can trust, even if she has to bend the rules. Things aren't always as black and white as they seem. To crack a case. This is how I get things done. Any winning actress Kathy Bates is, Matlock, all-new Thursdays at 90's turn on Global. Stream on Stack TV.