Pipeline companies operating in B.C. are in line to have their property taxes reduced by millions of dollars, and homeowners could be making up the difference.
Companies including Enbridge, Trans Mountain and FortisBC have managed, through nearly a decade of lobbying, to sway BC Assessment into changing how it assesses pipeline values, which would amount to a multi-million-dollar tax cut for pipeline companies that will need to be made up by local taxpayers.
The Conservative Party of B.C. has swiftly decried what it calls a “backroom deal” that will benefit billion-dollar pipeline companies at the expense of both rural and urban communities.
Chris Whyte, a representative of BC Assessment, told the Thompson-Noicola Regional District (TNRD) board of directors at its Oct. 23 meeting that companies in the pipeline industry approached BC Assessment in 2016 and aired grievances about the rates they were being charged. Whyte said these companies had argued the assessed values of their pipeline properties “were not representative of the current costs.”
The companies’ complaints led to a review of pipeline assessments that has gone on ever since, involving an industry working group that consisted of Enbridge, TC Energy, Trans mountain, Canadian Natural Resources, Encana, Pacific Northern Gas, FortisBC, Alta Gas and Pembina. These are the big-money pipeline companies that represent about 90 per cent of the pipeline values in B.C., Whyte said, adding there are an additional 93 pipeline companies operating in B.C. currently.
The regulation that dictates railway and pipeline valuations in B.C. was established in 1986 based on the costs of that era. Few changes have been made to that valuation model since then, Whyte said.
Under the Assessment Act, most properties in B.C. are assessed based on market value. Exceptions to this include major industrial properties, electrical power generation properties, farmland and so-called “linear properties” that impact the revenues of multiple municipalities. Whyte said pipelines, which rarely change hands, fall into the category of linear properties, and as such they are typically assessed not by their market value but by the costs associated with building and maintaining them.
Because the pipelines’ previously assessed values were based on 1980s construction costs, the companies had argued a review and subsequent change of how assessments are determined was needed, Whyte said.
“This review was conducted to reflect current industry costs that were not previously reflected in the cost model,” Whyte told the directors.
The review has led BC Assessment to drop the assessed value of pipelines across B.C. In the TNRD alone, the value has plummeted 27 per cent, or $300 million.
Clearwater Mayor Merlin Blackwell told Black Press Media Thursday the assessment change will hit his community “in a big way.”
Blackwell said his staff have crunched the numbers and have found that the loss of pipeline property tax revenue will reduce the municipality’s overall tax base by eight to 11 per cent, or somewhere between $250,000 and $300,000.
“It puts us in a position where we have very few choices to find other ways to fund that,” Blackwell said. “What we’re getting from BC Assessment and talking to our director of finance, Clearwater will definitely be one of the communities that loses and loses big time.”
The mayor said the numbers still need to be confirmed by the Minister of Finance, “so it could get worse, it could get better.”
Whyte acknowledged that this assessment change will be a burden for the TNRD and its municipalities within.
“We’re providing this early notification as we understand this will have an impact on the budgeting process for the district,” he said.
The Ministry of Finance told Black Press Media it is in the process of providing advanced notice to local governments and industry of proposed changes for the 2026 assessment roll.
“Updating our appraisal model for pipelines takes into consideration construction cost data, as well as the physical and functional depreciation,” the ministry said by email. “The new model will provide cost data that is updated annually which will help to provide improved assessment stability over time.”
Conservatives sound the alarm
On Thursday the Conservatives introduced new legislation they said would block the deal that effectively devalues pipeline companies’ property tax payments. The Municipal Affairs Statutes Amendment Act would update existing rules on rate caps and allow municipalities to accommodate revenue changes if the reassessment of pipeline properties goes through.
“Conservatives demand full transparency from NDP Finance Minister Brenda Bailey and an immediate halt to any assessment changes until communities are consulted,” the Conservatives said in an Oct. 30 press release.
Peter Milobar, MLA for Kamloops Centre and finance critic for the Official Opposition, cast blame on the provincial government for conceding to the pipeline companies. While small rural communities with pipelines running through them would be hit hardest by deflated tax base contributions from the pipeline companies, Milobar said urban centres will feel the financial pressure as well.
“This is not just a rural issue. Cities like North Vancouver, Burnaby and Kamloops already face rising costs and service pressures — now they will be forced to make up for a tax break negotiated behind closed doors with billion-dollar corporations,” Milobar said.
In a statement to Black Press Media, Milobar added it is “late in the day” for pipeline properties to be re-assessed for the 2026 assessment roll as municipal governments are already working to set their municipal budgets and tax rates for next year.
“The fact that municipalities and regional districts are not legally allowed to run a deficit means they will be left scrambling trying to figure out how to either make massive cuts to services or put the 30 per cent reduction in property taxes pipelines would receive to other rate payers,” Milobar said.
Blackwell confirmed Clearwater is in the middle of budget season and news of the assessment change has thrown a wrench in those plans, leving the district with few options.
He described the situation as a “huge pain” for the community which already needs to make massive expansions to services and infrastructure in the coming years due to the population swell that will be brought on by Taseko’s Yellowhead mining project.
Municipalities may be forced to raise taxes by double digits to maintain services, Conservative MLAs say.
“Every rural and urban community that has pipelines will be forced to replace lost revenue by raising taxes elsewhere,” said Conservative Fraser-Nicola MLA Tony Luck. “At a time when U.S. tariffs and NDP ideological bureaucracy are decimating forestry, causing layoffs and unprecedented mill closures, sawmills and pulp mills are likely to be the first targets for rural municipalities under pressure to keep the lights on.”
Blackwell expressed frustration at the level of communication from the province and BC Assessment about the pending evaporation of up to 11 per cent of Clearwater’s tax base, saying the talks with pipeline companies have been in the works for nine years and he’s only learned about the development in the last two months.
“If you’re going to tell somebody that you’re going to take away 10-plus per cent of their community’s taxation, a phone call might be a good idea for BC assessment,” he said. “Or at least labelling your email as something that’s going to be reacted to. Maybe put a red flag on it.”