Tax break for pipelines increases tax burden for B.C. residents

Changes to assessments

B.C. Assessment, a Crown corporation, plans to change pipeline property valuations, reducing industrial tax assessments by an estimated 23% to 30%, shifting hundreds of thousands of dollars as a tax burden onto homeowners and small businesses in communities where pipelines make up much of the commercial tax base.

In 2016, an industry group accounting for 90% of B.C.’s pipelines by value (including Enbridge, TC Energy, Trans Mountain, Canadian Natural Resources, Encana, Pacific Northern Gas, FortisBC, AltaGas and Pembina) approached B.C. Assessment about reviewing their assessments. The companies complained the assessed values of their properties “were not representative of the current costs,” according to B.C. Assessment’s Chris Whyte.

The complaints triggered a review, and after years of lobbying, B.C. Assessment is changing how it assesses the value of pipelines. The result is slashed assessment values, dramatically reducing the amount of property tax the companies will pay next year. Whyte said the agency “has maintained a proactive collaborative relationship with the pipeline industry.”

Whyte said the regulation was established in 1986 based on costs and construction techniques for that era.

“This is the first time since then that B.C. Assessment has completed a detailed review of costs,” said Whyte.

Most B.C. properties are assessed based on their market value. The assessed value of houses is calculated based on recent sale prices for similar properties nearby. However, that method is not possible for utilities and other properties that rarely change hands. Instead, the assessed value of pipelines is governed by B.C.’s Assessment Act and has historically been determined based on the costs to build and maintain them.

Whyte said B.C. Assessment’s revised model uses a widely used, known costing platform. That model suggests that costs to build transmission pipelines have declined due to pipeline twinning and the use of composite materials in pipeline construction. The cost overruns that plagued the construction of the Trans Mountain pipeline and led to its eventual purchase by the federal government were not mentioned.

Local taxpayers will have to make up the difference. With pipelines criss-crossing British Columbia, many local governments will be affected. In communities where pipelines comprise much of the commercial tax base, residents could end up facing sharply higher tax bills to make up for lost revenue from the pipeline companies.

At the Oct. 23 Thompson-Nicola Regional District board meeting, directors expressed confusion as to how B.C. Assessment had determined that the pipelines were less valuable than previously judged. Several directors questioned the logic of using a “fixed and immediate depreciation” model, which lowers assessed values regardless of ongoing maintenance or profit.

TNRD chair Barbara Roden noted pipelines are legally required to be maintained to “like-new” standards to prevent leaks or environmental damage, adding that reducing the assessed value undermines the promised financial benefits that were used to justify such infrastructure projects to local communities.

“When these projects come into an area, increased tax revenue is always one of their selling points. Residents deserve to know whether that promise actually holds up over time,” said Roden.

In the TNRD, pipeline value has dropped 27%, or $300 million. That shifts approximately $250,000 in taxes primarily onto residential properties in smaller, rural electoral areas that have limited commercial tax bases. Residential property owners could face tax increases of up to 25% in order to maintain existing services before any other budgetary adjustments or inflationary pressures.

Roden asked why local governments weren’t consulted earlier.

“It’s not just about money. It’s about transparency and fairness,” she said. “This was sprung on us with virtually no consultation.”

Clearwater Mayor Merlin Blackwell added, “If you’re going to listen to industry, there should be at least equal opportunity for municipal governments to be part of the discussion.”

Whyte suggested it was not until August that B.C. Assessment knew what the precise impacts would be for each local government.

According to its communications manager Ben Mittelsteadt, B.C. Assessment is committed to providing advanced notice to its municipal and regional district partners and First Nation partners of changes that may impact assessed values prior to the upcoming 2026 Assessment Roll.

“And we formally did so on Sept. 18, 2025,” he said.

B.C. Assessment Authority officials have said the new model will receive regulatory approval in November, Ministry of Finance approval by late November and final approval by the B.C. Assessment Authority’s board in December.

In a letter to Finance Minister Brenda Bailey, the TNRD formally requested the authority postpone implementation until the 2026 reviews of other major utility classes, railway, telephone, cable, and electrical transmission lines, are completed.

“We’re already hearing from other regional districts and municipalities who were blindsided, just like us,” Roden said. “This isn’t just a TNRD issue, it’s a province-wide concern about how industrial property is valued and who ends up paying the difference.”

(Editor's note. A representative of Enbridge says the company did not approach the B.C. Assessment Authority about reviewing its assessments. The B.C. Assessment Authority approached the company first. The representative also says Enbridge was not part of the lobbying effort to change how B.C. Assessment assesses the value of pipelines.)

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.