Split Classification: Class 2 – Utilities and Class 6
– Business and Other
Last Document Review Date: September 29, 2014
Last Legal Review Date: September 4, 2012
TABLE OF CONTENTS
Executive Summary .............................................................................. 2
Resources ............................................................................................ 2
Legislation ................................................................................... 2
Compliance Checklist ............................................................................ 3
Legal Direction ..................................................................................... 4
Appendix A: Case Studies ...................................................................... 7
Appendix B: Case Authority ................................................................. 11
Stated Cases ................................................................................... 11
Board Decisions ............................................................................... 17
Assessment Practices and Procedures
Split Classification: Class 2 and 6
1
EXECUTIVE SUMMARY
In certain circumstances, a property may be used for both a
Class 2 – utilities and a Class 6 – business and other purpose.
This document is intended to give guidance with respect to
the apportionment of classification, if any, between Class 2
and Class 6 in those situations.
The Prescribed Classes of Property Regulation, B.C. Reg.
438/81 identifies the specific property that falls within Class
2, whereas, Class 6 is a basket clause, and includes all land
and improvements not included in Classes 1 to 5 and 7 to 9.
RESOURCES
Legislation
Assessment Act, R.S.B.C. 1996, c. 20, sections 12, 13, 26,
57, 63 and 65.
Exclusion of Railway Bridges and Tunnels From the Definition
of Improvements Regulation, B.C. Reg. 328/96
Prescribed Classes of Property Regulation, B.C. Reg. 438/81
Assessment Practices and Procedures
Split Classification: Class 2 and 6
2
COMPLIANCE CHECKLIST
The following is a list of items that must be completed in
order to be considered compliant with this document:
1. Where properties are partially used or held for use for a Class
2 purpose but also have a Class 6 purpose (as set out in the
Prescribed Classes of Property Regulation) the classification
must be split according to the guidelines set out in this
document.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
3
LEGAL DIRECTION
As a general rule, classification is based on the type or use of
property and not on ownership. Class 2 property includes
property used or held for the purposes set out section 2 of
the Prescribed Classes of Property Regulation:
1. Class 2 property includes only
2. land or improvements used or held as track in place, right of
way or a bridge for the purposes of, or for purposes ancillary
to the business of transportation by railway,1 and
3. land or improvements used or held for the purposes of, or for
purposes ancillary to, the business of
4. transportation, transmission or distribution by pipeline,
5. telecommunications, including transmission of messages by
means of electric currents or signals for compensation,
6. generation, transmission or distribution of electricity, or
7. receiving, transmission and distribution of closed circuit
television,
except that part of land or improvements
8. included in Classes 1, 4 or 8,
c.1 used as a gathering pipeline,
9. used as an office, retail sales outlet, administration building
or for an ancillary purpose, or
10. used for a purpose other than a purpose described in
paragraphs (a) or (b).
1
In British Columbia, there are only four assessable railway bridges, and
they are located in the City of Revelstoke, the District of Pitt Meadows, the
District of Sicamous and the Village of Lytton. All other railway bridges are
excluded from the definition of improvements under the Exclusion of
Railway Bridges and Tunnels from the Definition of Improvements
Regulation, B.C. Reg. 328/96 and thus are not assessable.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
4
Because Class 2 expressly excludes certain types of property,
the determination of whether property falls within Class 2
involves two steps: first, you must determine whether the
property is used or held for the purposes identified in
paragraphs (a) or (b); and second, you must determine
whether the property is nevertheless excluded under
paragraphs (c) to (e). Section 10 of B.C. Reg. 438/81
provides authority to split classify property where it falls into
two or more property classes.
Step
Step 1: Determine whether
the land, improvements, or
both, are used or held for
the purposes of, or for
purposes ancillary to, one of
the types of businesses
listed in Class 2, paragraph
(b) or paragraph (a) if it is a
track in place, right of way
or a bridge that is ancillary
to the business of
transportation by railway.
Step 2: Determine whether
any part of the land or
improvements fall under the
exclusions in Class 2,
paragraphs (c) to (e). If a
portion is being used for
Class 1 – residential, 4 –
major industry or 8 –
recreational property/nonprofit organization purposes
it must be classified as such.
If it used for a gathering
pipeline it must be Class 5 –
light industry or Class 6 if
used for most other
purposes.
Assessment Practices and Procedures
Comment
The phrase “the business of”
in Class 2 should not be
given a restrictive meaning.
Emphasis should be placed
on “the purpose of, or for
purposes ancillary to” the
purposes listed in section
2(a) and (b).
Even if the user of the
property is one of the types
of businesses that would
ordinarily be considered to
have a Class 2 purpose
(e.g., a pipeline company)
you must consider what
kind of activity is actually
happening on the property
being assessed and whether
or not the property or
portions of it are being used
or the utility business or for
a more general purpose.
For example, where a utility
company has rooms such as
classrooms, lunchrooms and
janitors’ facilities that
facilitate the business of the
particular utility, those
Split Classification: Class 2 and 6
5
Step
Assessment Practices and Procedures
Comment
portions of the property
should be classified as Class
2. However, if those spaces
are only being used ancillary
to the office, corporate
administrative or retail parts
of the operation, then they
are excluded from Class 2
and should be classified as
Class 6. Also, even though a
railway is a utility company,
its ancillary land or
improvements are Class 6
unless those items are one
of those named in
paragraph (a).
Split Classification: Class 2 and 6
6
APPENDIX A: CASE STUDIES
Scenario 1
Entrance/studio area
Scenario 2
Warehouse area
Scenario 3
Compound area
Scenario 4
Training and lounge area
Telecommunications
Property
Purpose
Used for customers, front
desk for customers to pay
bills and make enquiries.
Part is a studio for
community programming
Telecommunications
Property
Purpose
Used by construction
technicians, planning
technicians, network
technicians and employees
to store and acquire
technical equipment and
parts necessary to
maintain the cable systems
network
Telecommunications
Property
Purpose
Used to store company
vehicles, spools of cable
and satellite dishes
Telecommunications
Purpose
A training room used as a
classroom for external
courses offered to cable
subscribers (e.g., how to
use the internet) and as a
general meeting room.
Lounge area used by
administrative staff for
lunch and coffee breaks
Assessment Practices and Procedures
Classification
Class 6 because these uses
are excluded under section
2(d), as office, retail sales
outlet, administration
building or ancillary to one
of those functions
Classification
Class 2 because the area is
used directly for the
purpose of
telecommunications
Classification
Class 2 because the use is
for the purpose of
telecommunications
Classification
Class 6 because the
training room is for
subscribers of the cable
service and is ancillary to
the retail sales area, and
the lounge is for the
administrative staff, then
the correct classification is
Class 6: Shaw
Cablesystems Ltd. v.
Assessor of Area 04 –
Central Vancouver Island,
Split Classification: Class 2 and 6
7
2004 PAABBC 20040451
(November 29, 2004).
Scenario 5
Training facility
Scenario 6
Vacant room built to house
switching equipment
Scenario 7
Tower and related
improvements on private
land used only for the
business of
telecommunications
Any Utility (except
Railway)
Purpose
Facilities used for meeting
with or training employees
or contractors of owner in
relation to construction,
maintenance and/or repair
of utility improvements
Telecommunications
Purpose
No evidence that the room
was used for anything. If it
was held for any purpose,
it was for the purpose of an
office
Telecommunications
Purpose
Only lessee/user of the
tower is a
telecommunications
company which is using it
for the business of
telecommunication
Classification
Class 2 because the facility
is used in connection with
“the business of” the utility
purpose
Classification
Class 6 as the room is
unused and if the room is
held for anything, it is held
for an office which is
excluded from Class 2: BC
Tel v. Assessors of Area 04
– Nanaimo-Cowichan and
Area 10 – Burnaby-New
Westminster (1986),
Stated Case 223
(B.C.S.C.).
Classification
Class 2, as the tower is
used directly for the
purpose of
telecommunications,
including transmission of
messages by means of
electric currents or signals
for compensation:
Westower Communications
v. Assessor of Area 12 –
Tricities/Northeast Fraser
Valley, 2004 PAABBC
20041284 (September 9,
2004).
If there is more than one
user, and some of the
users are not in the
Assessment Practices and Procedures
Split Classification: Class 2 and 6
8
business of
telecommunications (i.e.,
ham radio operators), then
split the classification
between Class 2 and Class
6.
Scenario 8
Property where a portion is
leased to a
telecommunications
company, but the
remainder is not leased or
used for any purpose
Scenario 9
Land and improvements
owned by BC Hydro but
leased to and occupied by
independently owned
laboratory
Telecommunications
Purpose
Lessee/user of some of the
improvements is a
telecommunications
company and it is used for
the business of
telecommunications but
the rest of the site unused
although available for lease
for telecommunications or
other purposes
Hydro Property
Purpose
Testing laboratory for
electrical equipment,
testing for railways,
telephone companies, gas
companies but no electrical
power generation or
transmission
Classification
Split classification between
the portion of the property
leased to and used by a
telecommunications
company for the business
of telecommunications
(Class 2) and unused
portion of the property
which could potentially be
leased to anyone (Class 6):
Westower Communications
v. Assessor of Area 12 –
Tricities/Northeast Fraser
Valley, 2004 PAABBC
20041284 (September 9,
2004).
Classification
Class 6 because the
wording “purpose ancillary
to the business of
generation” was not meant
to include a research lab
that provided testing and
research services to a wide
range of customers but
primarily to BC Hydro: BC
Hydro and Power Authority
v. Assessor of Area 14 –
Surrey/White Rock (1993),
Stated Case 343
(B.C.S.C.), application for
leave to appeal denied
(B.C.C.A.).
But caution should be
Assessment Practices and Procedures
Split Classification: Class 2 and 6
9
exercised with this
determination because this
same facility was held to
be “used for the purpose of
the generation of
electricity” and in Class 2
when it was owned by BC
Hydro and presumably
used solely by BC Hydro
for research purposes:
British Columbia Hydro &
Power Authority v.
Assessor of Area 14 –
Surrey/White Rock (1985),
Stated Case 204
(B.C.S.C.).
Scenario 10
Parking
Electrical Power
Corporation
Purpose
Parking ancillary to both
the office/administrative
area of an electrical power
corporation and parking for
service vehicles and service
staff involved in the dayto-day business of the
provision of electricity
Assessment Practices and Procedures
Classification
Split classification – Class 2
for the parking areas
occupied by the service
vehicles and service staff
and Class 6 for parking
related to the
office/administrative
function of the corporation
Split Classification: Class 2 and 6
10
APPENDIX B: CASE AUTHORITY
Stated Cases
1. Assessor of Area 06 – Courtenay v. Norske Skog Canada
Limited (2004), Stated Case 476 (B.C.S.C.)
Classification – “Industrial Improvements” – “Part of a Plant”
The properties at issue in this appeal are the Powell Dam, the
Lois Dam and the Theodosia Diversion, which service the
Norske Skog pulp and paper mill in Powell River. Both parties
agree that the mill is properly assessed as Class 4. The
assessor assessed the subject properties as Class 2; the
respondent appealed the assessor's classification to the
Board. The issue before the Board on appeal was whether the
proper classification was Class 4 or Class 2. The
determination of the issue effectively turned on whether the
subject properties were “industrial improvements” namely,
improvements that are “part of a plant”, within the meaning
of section 20(1) of the Assessment Act. The Board ordered
the assessor to reclassify both dams and the Theodosia
Diversion as Class 4.
HELD: Appeal Dismissed. The Court found that the assessor
had not demonstrated that any of the Board's material
conclusions lacked sufficient underlying evidentiary support or
that the Board acted on a view of the facts that could not be
reasonably entertained. The “physical, operational and
functional integration test” as articulated by the Board is the
applicable test established by Westar as supplemented by
Quinsam. Physical proximity is one factor to be considered as
part of this test but is not a paramount or determinative one.
There is no question that the mill has always required, and
continues today to require, electricity to manufacture pulp
and paper. The provision of power to the mill was the raison
d'etre for the construction of the subject facilities and
continues to be their purpose and use. These dams and the
diversion meet the test required to comprise part of the mill
plant.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
11
2. Burlington Resources Canada Ltd. v. Assessor of Area 27 –
Peace River (2005), Stated Case 471 (B.C.C.A.)
Natural Gas Pipeline – “the business of transportation,
transmission or distribution by pipeline” – Prescribed Classes
of Property Regulation, B.C. Reg. 438/81
Burlington Resources Canada Ltd. (“Burlington”) is an oil and
gas producer. It owns a pipeline through which it transports
gases from one of its processing plants located in north
eastern British Columbia (the “Noel Plant”) to another of its
plants located in Alberta (the “Elmworth Plant”). The pipeline
between the Noel and Elmworth plants is in two parts, and
the subject of this appeal is the 16” OD pipeline only (the
“pipeline”). The issue was whether the pipeline falls within
Class 2 or Class 5 as defined in the Prescribed Classes of
Property Regulation. The Board held the pipeline was Class 5.
The Supreme Court found that the pipeline should be
classified as Class 2.
HELD: The BC Court of Appeal found that the Board correctly
based its classification on the actual use of the pipeline, as it
was required to do. The Board correctly decided that the
pipeline in question was not used for the purpose of the
business of transportation, transmission or distribution of
natural gas by pipeline, as required for the pipeline to be
classified as Class 2. Also the Board did not err in law in its
interpretation or its application of the meaning of the words
“the business of transportation, transmission or distribution
by pipeline”. The Board did not err in using the industry, as
opposed to dictionary, meanings of "transportation",
"transmission" and "distribution" as they had a basis for using
those meanings. The parallel grammatical construction of
section 2(b)(ii) reinforces the legislative intention that
"transmission" describes the conveyance of a product from
the processing plant to the customers. The regulatory scheme
consistently treats the production stage and its antecedents
as functionally separate from the stage of transportation or
transmission and distribution to markets. The BC Court of
Appeal held that he Board’s finding that “transportation by
pipeline” refers to the bulk transportation of petroleum and
petroleum products meant that the pipeline was not used for
“transportation” of natural gas or for a purpose ancillary
thereto. Further, the Board’s finding that transmission of
Assessment Practices and Procedures
Split Classification: Class 2 and 6
12
natural gas follows after its production necessarily implies
that transmission precedes distribution to users. That
conclusion precludes a finding that the pipeline was used for
distribution by pipeline. There was no reason that the Board
should have considered whether the pipeline was used for a
purpose ancillary to the business of distribution by pipeline.
Such an interpretation would ignore the functional separation
reflected in the regulatory scheme between gathering,
production, and transmission and distribution of natural gas
to markets by elevating the distribution by pipeline to a
position of dominance such that gathering, production, and
transmission uses would be ancillary to it. That cannot have
been the legislative intent. Class 5 should be reinstated for
the pipeline.
NOTE
Since this case was decided, the Prescribed Classes of Property
Regulation, B.C. Reg. 438/81 was amended to provide a specific
definition of “gathering pipeline”. The affect of this amendment
is to limit the application of this stated case to its particular facts
and to the time at which it was decided.
3. Assessor of Area 21 – Nelson/Trail v. Cominco Ltd. (1997),
Stated Case 384 (B.C.C.A.)
Dams – Classification – Utility – Business and Other – "the
business of"
Cominco is a mining company that owns two dams. The dams
are operated by a utility company. Most of the power
generated at the dams is provided to the Cominco smelter at
Trail, and the rest goes into a power grid for purchase and
use by others. The Board classified the dams as two-thirds
Class 6 and one-third Class 2, based on the destination of the
power generated.
HELD:
1. The entire property should be classified as Class 2.
2. The words “in the business of” should be given a broad
interpretation; the dams were used for “the business of ...
generation, transmission or distribution of electricity”.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
13
3. Because the entire property is properly classified as Class 2, it
is unnecessary to consider whether the property is also used
to manufacture a product (Class 5), or whether the Board
erred in splitting the classification.
4. Assessor of Area 14 – Surrey/White Rock v. B.C. Hydro &
Power Authority (1993), Stated Case 343 (B.C.S.C.), application
for leave to appeal denied (B.C.C.A.)
Classification – Class 6 – Business and Other – Privatized
Utilities – Ancillary Buildings – Laboratories
The subject property included a general laboratory, offices,
radiography, an extra high-voltage laboratory, and a second
building which contains the high-power laboratory, which
were located on land and in improvements owned by BC
Hydro. The facility conducts testing for railways, telephone
companies, and gas companies, to name only a few
customers not in the business of electrical power generation
and transmission. Activities such as soil analysis, concrete
testing, testing of gas cylinders, vehicle component testing,
development of protective coatings, and development of a
pilot plant for disposal of PCBs are carried on in this facility in
addition to the testing of electrical components. Previously,
when BC Hydro used the property for these purposes, it was
classified as Class 2.
HELD: The property was not “used or held for purposes
ancillary to” the business of generation, transmission or
distribution of electricity. It should be classified as Class 6.
5. British Columbia Telephone Company Limited v. Her Majesty
the Queen in Right of British Columbia and the British Columbia
Assessment Authority (1991), Stated Case 315 (B.C.C.A.)
Classification – Class 2 – Utilities – Ancillary Business –
Definitions – Uses – Prescribed Classes of Property Regulation
The appellant argued that the words “purposes ancillary to
the business of” are of no force and effect because [section
19(14)] of the Assessment Act only allows classification based
on type or use. These words imply classification by reference
to the business carried on by the person who uses the
property.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
14
HELD: These words are not a reference to ownership of
property but rather to the specific use of the property (i.e.,
for the purposes of communication by telephone). “Use” in
[section 19(14)] of the Assessment Act is sufficiently broad to
permit the Lieutenant-Governor in Council to enact a
regulation defining utilities by use of the words “used or
held... for the purposes ancillary to, the business of...
communication by... telephone”.
6. B.C. Telephone Company v. Assessor of Area 04 –
Nanaimo/Cowichan and Assessor of Area 10 – Burnaby/New
Westminster (1986), Stated Case 223 (B.C.S.C.)
Classification – Utilities – Meaning of “Business”
The Assessment Appeal Board held that properties used by
the appellant, BC Telephone Company, for purposes including
assembly rooms and lunchrooms for residential telephone line
installers, exterior parking facilities, vehicle garages,
warehouses, carpentry and steel fabricating shops and
portable classrooms used to train installers, splicers and
operators of equipment were all properly classed “utilities”
because they were ancillary to the business of communication
by telephone. The Board held also that a vacant room built to
house telephone switching equipment but never used for that
purpose, was held for the purpose of the business of
communication. The Board excluded those parts of the
properties under appeal used as offices or administration
buildings, or for purposes ancillary thereto, and classified the
excluded parts under Class 6.
HELD: The Board properly interpreted section 2 of B.C. Reg.
438/81, in classifying as utilities all of those portions of the
properties under appeal used for the purpose of the business
of the appellant, or for purposes ancillary thereto, except
those portions used as offices or administration buildings or
for purposes ancillary thereto. It was held further that there
was no evidence before the Board on which it could find that
the vacant room built to house switching equipment was
“used” for anything, and if it was being “held” for any
purpose, it was for the purpose of an office and as such would
be excluded from the utility classification.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
15
7. British Columbia Hydro and Power Authority v. Assessor of
Area 14 – Surrey/White Rock (1985), Stated Case 204
(B.C.S.C.)
Statutory Interpretation – Utilities – “Ancillary”
The Board found that a Research and Development
Laboratory owned by BC Hydro was not Class 2 because it
was not “used or held for the purposes of... the generation,
transmission or distribution of electricity”. The Board
neglected to consider whether the laboratory’s purpose was
ancillary to the generation, transmission or distribution of
electricity.
HELD: The laboratory should be classified as Class 2 because
its purpose is ancillary to the generation, transmission or
distribution of electricity. The Board’s interpretation resulted
in the deletion of the expression “or for purposes ancillary to”
as excess verbiage, and the Board had no authority to ignore
these words.
8. B.C. Transit v. Assessor of Area 09 – Vancouver (1985), Stated
Case 197 (B.C.S.C.)
What constitutes a “railway” for the purposes of Class 2
The ALRT transit system (“Skytrain”) is a “railway” within the
meaning of Class 2. The ALRT roadbed, “guideways,” and
trackage constitute a “line of track providing a runway for
wheels” and the total ALRT system constitutes a system of
tracks for cars which transport people. The system is,
therefore, a railway.
NOTE
Since this case was decided, the wording of Class 2 has been
amended.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
16
9. British Columbia Hydro and Power Authority v. Assessor of
Area 14 – Surrey/White Rock (1983), Stated Case 184
(B.C.S.C.)
Right-of-Way Lands – Classification
Right-of-way lands encumbered by a right-of-way easement
for either transmission lines or gas pipelines were properly
classified as utility.
HELD: The right-of-way was properly classified as utility
because although such land was leased for grazing, by
maintenance of its easement, BC Hydro was using the land
for utility purposes. “An owner can be considered to use land
even where the land is vacant if he keeps it in this condition
for his own special purposes” (See Newcastle City Council v.
Royal Newcastle Hospital [1959] App. Cas. 248).
Board Decisions
1. Greater Vancouver Sewerage & Drainage District v. Assessor of
Area 08 – North Shore/Squamish Valley, 2006 PAABBC
20052174 (February 1, 2006)
Water and sewerage pipes – whether used or held for
purposes of or purposes ancillary to transportation,
transmission or distribution by pipeline
The appellant argued that only oil and gas industry pipelines
should be classified as Class 2. The assessor argued that the
plain meaning of the term “pipeline” required the appellant’s
land and improvements to be classified as Class 2.
HELD: Properties used or held for the purposes of, or for
purposes ancillary to, the movement of water and sewage
through a pipeline are land and improvements used or held
for the purposes of, or for purposes ancillary to, the business
of transportation, transmission or distribution by pipeline, and
therefore Class 2. Class 2 is not limited only to pipeline
transportation, transmission or distribution of the oil and gas
industry.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
17
2. Shaw Cablesystems Ltd. v. Assessor of Area 04 – Central
Vancouver Island, 2004 PAABBC 20040451 (November 29,
2004)
Properties located in industrial park – whether “used or held
for the purposes of, or for purposes ancillary to, the business
of telecommunications…”
The two subject properties are owned by Shaw Cable and
located in industrial park. One of the properties is its hub for
telecommunications systems for Northern Vancouver Island
and the other is Shaw’s regional headquarters. The assessor
applied a Class 6/Class 2 split classification to the property for
the 2003 and 2004 roll, but Shaw argued the properties
should be Class 6 only because "used or held for the purposes
of, or for purposes ancillary to, the business of
telecommunications, including transmission of messages by
means of electric currents or signals for compensation" does
not include these sorts of properties.
HELD: The Board found that the assessor properly classified
most of the properties, except for the training and lounge
area (area B) and the vacant office area (area J), which the
Board held should be Class 6 not Class 2. The Board cited BC
Tel v. AA04 & AA10. The Board rejected the argument that
paramount use governs the classification. The Board further
found that the classification of the properties as partly Class 2
and partly Class 6 is not inequitable, and that equity must be
determined in comparison to a class or group of properties.
3. Westower Communications v. Assessor of Area 12 –
Tricities/Northeast Fraser Valley, 2004 PAABBC 20041284
(September 9, 2004)
Classification of communications tower
The subject property was a communication tower that was
built for a variety of users. It is located on land under private
ownership (the Grant Hill Site). Westower leases the area
occupied by the communications tower from the private
owner. Westower rents space to clients on its towers and in
equipment shelters. Westower provides antenna accessories,
antenna sites, equipment enclosures/shelters and cabinets,
lighting control/protection, microwave equipment, connectors
Assessment Practices and Procedures
Split Classification: Class 2 and 6
18
and adaptors, towers and tower equipment. Depending on the
needs of its clients, Westower may also supply generator back
up, electrical power, security and maintenance of its tower
sites. Westower says that it is not in the business of
telecommunications, but in the business of leasing the tower
to clients, some of which, Westower admits, may use the
tower for the business of telecommunications. In 2003,
Westower had only one client using the tower, which was
Telus. Westower argued that the tower should be Class 6. The
assessor maintained the tower should be Class 2.
HELD: Property is to be classified as Class 6 only if it does not
reasonably fall into another class: Union Club of B.C. v.
Assessor of Area 01 – Saanich-Capital (1993), Stated Case
314 (B.C.C.A.). Therefore the first step in the analysis is to
determine whether the Grant Hill Site and site improvements
reasonably fall within Class 2. If the Grant Hill Site and site
improvements are "used or held for the purposes of, or for
purposes ancillary to, the business of telecommunications,
including transmission of messages by means of electric
currents or signals for compensation", then they fall within
Class 2. The only use of the tower was by Telus and Telus
used the whole of the tower for the business of
telecommunications. The tower and the Grant Hill Site on
which it was located and which was partly used and partly
held for the business of telecommunications were properly
Class 2. With respect to the other improvements on site (e.g.,
equipment storage shelters, a power shed and a diesel tank),
a split classification should apply because, with respect to the
diesel tank and power shed, there was no evidence that Telus
used them. As well, not all of Westower’s potential clients are
in the business of telecommunications (e.g., ham radio
operators). Therefore, it could not be said that all the
improvements on the Grant Hill site were “held for” a purpose
ancillary to the business of telecommunications. The house
and the land occupied by the private owner were classified as
Class 1.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
19
4. CHBC Okanagan Valley TV Co. Ltd. v. Assessors of Areas 17, 19
and 20 (AAB, 1998 – dated March 31, 1999)
Classification of broadcasters and rebroadcasters
The appellant broadcasters challenged the classification of
their properties, arguing that they should be in Class 6. The
assessors took the position that the properties should be
classified as Class 2.
HELD: The Board found that B.C. Reg. 438/81 indicated that
the legislature intended properties used in connection with
specific types of business to be included in Class 2. The Board
found that to include radio and television broadcasting as
telecommunications under the heading of utilities is not an
absurdity of logic or a violation of justice, reasonableness,
common sense or public standards.
Class 6 is a catch-all class and only property not reasonably
included in another class should be included in that class. The
properties under appeal can be reasonably included in Class
2. As a head note, the word utilities does not form part of the
regulation and must be construed as being inserted for the
convenience of reference only. The Board held that the word
“including” does not narrow the general introductory word
“telecommunication” and thus exclude telecommunication
that is not for compensation. The Board also found that the
appellants to be in the business of telecommunications. The
plain meaning of telecommunications would include
broadcasting, and it is this rule of statutory interpretation that
the court of appeal has directed should be applied.
NOTE
The Assessment Act Regulation was amended in 2000 to provide
a definition of “telecommunications” for the purpose of the
Assessment Act and regulations. The intent of this definition is to
exclude from the definition of “telecommunications” (and
therefore also from Class 2) broadcasters and rebroadcasters.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
20
5. B.C. Hydro & Power Authority v. Assessor of Area 14 –
Surrey/White Rock (AAB, 1991 and 1993 – dated June 26,
1992)
Classification – Power Service – Company Independent of
B.C. Hydro – Lands Leased from B.C. Hydro – Repair of High
Voltage Electrical Apparatus – Purpose Ancillary to the
Business of Generation – Transmission of Electricity –
Distribution of Electricity – Class 6 Business and Other
The subject folio contains land and improvements were owned
by BC Hydro and Power Authority and leased to Power Serv
Pacific Inc. Power Serv is a subsidiary of BC Hydro. It repairs
and maintains high voltage electrical apparatus used in the
generation, transmission, and distribution of electricity. Power
Serv took over facilities that previously housed BC Hydro’s
Surrey Electric Shop. It employed many of the BC Hydro
employees who had worked with the facility. Power Serv's
main customer was BC Hydro, but it was attempting to
expand its customer base. The assessor classified the land
and improvements as Class 2 because of being used or held
for a purpose ancillary to the business of generation,
transmission and distribution of electricity. BC Hydro argued
that the proper classification is Class 6.
HELD: Power Serv's business is entirely distinct from BC
Hydro and its other customers. The facility, as it is now
operated, conducts testing for railways, telephone companies,
and gas companies, to name only a few customers not in the
business of electrical power generation and transmission.
Activities such as soil analysis, concrete testing, testing of gas
cylinders, vehicle component testing, development of
protective coatings, and development of a pilot plant for
disposal of PCBs are carried on in this facility in addition to
the testing of electrical components. BC Hydro uses other
service providers and Power Serv has other clients. Power
Serv bases its charges on market factors and does not give
preferential rates to BC Hydro. Power Serv was incorporated
to operate as a company independent of BC Hydro, and does
operate independently of BC Hydro. The contracts it performs
for BC Hydro are arm's length. By incorporating Power Serv,
BC Hydro effectively disposed of its in-house service. Power
Serv was created to provide services in BC on a scale that no
other company then provided and to market those services to
Assessment Practices and Procedures
Split Classification: Class 2 and 6
21
companies including BC Hydro. Power Serv does not “use” or
“hold” the lands and improvements for “a purpose ancillary to
the business of generation, transmission or distribution of
electricity”. The land and improvements leased by Power Serv
from BC Hydro should be classified in their entirety as Class
6, despite the fact that when BC Hydro itself had used these
same lands and improvements for identical purposes, the
Court held that they were Class 2.
Assessment Practices and Procedures
Split Classification: Class 2 and 6
22