The B.C. government is promising to extend permanently a cap on municipal taxes for the province’s major port terminals. Finance Minister Kevin Falcon made the pledge as he delivered the province’s 2012-13 budget on February 21, 2012.

The government implemented the cap in 2004, and in 2007, extended it to 2018. Falcon said his Liberal government will introduce legislation at a later date to make the cap permanent.

Under B.C.’s Ports Property Tax Act, $27.50 per $1,000 of assessed value is the maximum municipal tax that can be imposed on the designated port facilities. In return for the cap, the provincial government compensates the affected local governments. That will continue, Falcon said.

The City of Prince Rupert is receiving $1.49 million in annual compensation, according to latest version of the act. Payments are indexed to the rate of inflation until 2018, says a backgrounder on the cap.

“The Port of Prince Rupert is on the verge of historic growth. We are seizing the opportunities of Asia-Pacific trade and working with investors who are eager to share the success of B.C.’s northern trade corridor,” commented Don Krusel, President and CEO, Prince Rupert Port Authority. “A permanent cap on municipal property tax makes investment here even more attractive. It means adding tax stability to the long list of Prince Rupert’s advantages. The inevitable result will be sustainable growth, more jobs, and long-term benefits for our communities.”

Port Metro Vancouver, also covered by the act, welcomed the decision. “Port Metro Vancouver is very pleased with the provincial government’s decision to permanently extend the B.C.’s Ports Property Tax Act. These changes are essential in supporting the competitiveness of Port Metro Vancouver and our industry stakeholders,” said Robin Silvester, President and CEO of Port Metro Vancouver. “As Canada’s largest port and a gateway to Asia, we appreciate the important steps the province has taken to encourage port investments and create new jobs, while maintaining support for our municipal neighbours.”

According to the backgrounder, the cap has resulted in investments of over $1 billion in terminal expansions.

 “Now we’re making the cap permanent – because it’s working,” Falcon said in his budget speech.

The existing act also calls for a 10-year tax cap of $22.50 per $1,000 assessment on “eligible new investments” built before the end of 2018.

The proposed legislation would remove all the expiry dates.

Meanwhile, the budget includes a promise to introduce new training tax credits “for eligible employers” for apprentices in B.C.’s ship-repair and shipbuilding industries. These will pay up to $5,250 per apprentice, per year, for the first two years of an eligible apprenticeship program.