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BC Politics

Owner of Site that’s Contaminated Burrard Inlet for Years Now Wants a Tax Break

The problem was first identified in 1995. It took decades for cleanup to start.

Michelle Gamage 5 Sep

Michelle Gamage is an independent journalist and photographer based in Vancouver with an environmental beat. You can find her on Twitter here.

Across the water from the touristy Brockton Point Lighthouse on the Stanley Park Seawall is a collection of industrial sites with a dirty secret.

Seaspan largely owns and operates these industrial lands. And for at least 24 years the corporation and the provincial government have known that toxic creosote — classified as a likely carcinogen — has been flowing from the contaminated lands into the Burrard Inlet.

Although the provincial government identified the problem in 1995, including the flow of creosote into neighbouring properties and the Burrard Inlet, and began talks with Seaspan on a cleanup plan in 1995, the government took no action to force a cleanup and limit pollution of the inlet until 2010.

The environment ministry spent 15 years discussing a remediation plan with Seaspan and Domtar, the land’s previous owner.

But the companies “were unable to voluntarily produce a remediation plan” over that period, according to documents filed with the Property Assessment Appeal Board.

A cleanup order was finally issued in 2010, and remediation work on the land is almost complete, with the ultimate cost estimated at $40 million.

Now Seaspan is arguing that the cleanup costs should entitle it to a big property tax break.

The company is seeking a retroactive reduction in its property tax assessment that could cost the District of North Vancouver hundreds of thousands of dollars, Derek Holloway, a retired BC Assessment senior appraiser, told The Tyee.

A history of inaction

When the environment ministry first identified the pollution in 1995 it asked Seaspan, the property owner, and Domtar, which owned the land from 1924 to 1965, to prepare a voluntary remediation plan.

The ministry identified Domtar as the most substantial polluter. It ran a creosote wood preserving plant which contaminated the soil, sediment and groundwater, according to a decision by the Environmental Appeal Board.

But the board found Seaspan was fully aware of the previous land use when it bought the property and therefore became responsible for controlling for contamination and cleanup costs.

In an emailed statement, environment ministry spokesperson Tyler Hooper said there were a number of reasons for the 24-year delay in cleaning up the site.

Underground pollution is hard to track and it’s hard to assess environmental damage, he wrote.

But Hooper wrote the main reason for delays was disputes between Seaspan and Domtar over who would foot the bill. And while the debate continued, creosote continued to flow into the inlet, he wrote.

The remediation measures, including barrier walls and groundwater capture and treatment systems, are almost in full operation, added Hooper.

“The primary environmental concern has been discharge of creosote and creosote derivatives to the Burrard Inlet,” he wrote. “From the outset, the objective has been to have the responsible parties... fully investigate subsurface contamination and develop and implement a remediation plan.”

Creosote is a tricky substance to clean up once it gets in the ground, University of British Columbia professor Roger Beckie told The Tyee. It’s heavy and will sink through soil, sand and water, leaving an oily smear as it goes, before pooling on a solid surface, often deep underground or at the bottom of an aquifer, said Beckie.

This makes it extremely hard to find and clean up and allows small amounts of creosote to dissolve in water over time and pollute surrounding waters, he added.

West Coast Environmental Law staff lawyer Andrew Gage said the government should have stepped in sooner.

“Clearly 24 years is unacceptable,” said Gage. “The province may blame the parties for not agreeing on who is responsible, but [the province] has a very clear legal mandate to decide who is responsible and order them to take care of it. The fact it took them 15 years to decide to exercise that power I think says a lot about the B.C. government’s approach over the years to contaminated sites.”

The previous BC Liberal government was very hands off when it came to pollution enforcement, said Gage.

In 2017, Seaspan and Domtar were fined for failing to follow the remediation order.

While the fine was small, Gage said it was still a positive step.

“That [the fine] is actually being used in this case is a success story of sorts. It’s a new tool, [first used in 2015] not available previously, for the government to try and make sure there are penalties that begin to reflect the type of harm that has occurred. I’m not sure what the $35,000 fine does, but it’s certainly better than a $750 or $1,000 ticket price which was available previously.”

Seeking a tax break for pollution

After dragging its feet on the cleanup, Seaspan is now looking to gain a tax break through reduced property assessments.

Seaspan has been arguing since 2013 its assessed property value should be reduced by the cost of the cleanup, around $40 million. The BC Assessment Office agreed the cleanup cost should be considered in setting the value of the company’s properties. But Seaspan is arguing the entire reduction should be applied to one property, which would give it the largest tax break.

The assessment appeal board rejected this argument in a 2017 decision.

If the assessed value is reduced as a result of the current appeal, then the property taxes collected since 2013 would have to be revised, and North Vancouver would have to return much of the taxes collected from Seaspan.

Since 2013, the land’s value has risen steeply to $212.5 million in 2018. Property taxes for the land in 2018 were $4.8 million.

According to the District of North Vancouver, it is nearly impossible to calculate what property taxes may have to be returned, because the land is listed under two zonings that have different tax rates, and it is not clear what reductions Seaspan will seek.

An appeal board hearing is set for October.

Seaspan declined to comment on the ongoing case and Domtar did not respond to a media request by publication time.  [Tyee]

Read more: BC Politics, Environment

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