Health Authorities Act

Transcription

1 Health Authorities Act Last Document Review Date: September 29, 2014 Last Legal Review Date: December 15, 2016 TABLE OF CONTENTS Executive Summary... 2 Resources... 3 Legal... 3 Compliance Checklist... 4 Health Authorities Act Exemptions... 6 General... 6 Section 15 of the Health Authorities Act... 7 When is Property Used for the Purposes of the Health Authorities Act?... 8 When is Property Used By or On Behalf of a Health Authority?... 8 Specific Use Scenarios Seniors Residences Physicians Offices Section of the Health Authorities Act Property Designated for Future Hospital Purposes Hospitals or Designated Hospital Facilities The Occupiers Health Authorities Act 1

2 EXECUTIVE SUMMARY There are, officially, five regional health boards in BC (i.e., health authorities): o Northern Health Authority o Interior Health Authority o Vancouver Island Health Authority o Vancouver Coastal Health Authority o Fraser Health Authority These health authorities are Crown agents and registered charities. Although the Provincial Health Services Authority (the PHSA) is listed as a health authority on the Ministry of Health s website, it has not been designated as a regional health board under the Health Authorities Act. Accordingly, the exemptions discussed in this document do not apply to it. However, the PHSA is a society under the Society Act and it is also a registered charity. While it is not entirely free from doubt, the PHSA is probably also a Crown agent. In the past several years, the health authorities in BC have acquired ownership of many health-related properties, including hospitals and health clinics. A few different exemptions potentially apply to these properties, but when property is owned by a health authority, you should first look to the Health Authorities Act. If the property does not meet the exemption criteria in the Health Authorities Act, look into other potential exemptions for the property. Sections 15(1) and 15.01(2) of the Health Authorities Act exempt certain property owned by a health authority. Exemptions in section 15(1) of the Health Authorities Act apply to property owned by a health authority and used by or on behalf of the health authority for the purposes of the Health Authorities Act, as well as to property owned by some other exempt entity that is leased to a health authority and used for the purposes of the Act. Health authority purposes are set out in section 5 of the Health Authorities Act and in the Board and Council Purposes Regulation made under that Act. Basically, these purposes are Health Authorities Act 2

3 RESOURCES Legal the provision and delivery of health services in the region of a particular health authority. Generally speaking, if the property is used by the health authority for some health care purpose, we assume that the property meets the use test and apply the exemption. Exemptions in section 15.01(2) apply to property owned by a health authority that is either designated by the minister of health for future hospital purposes, or occupied by very specific third parties for certain purposes. Generally, this exemption will only need to be considered if the exemption in section 15 does not apply. Health Authorities Act Board and Council Purposes Regulation, B.C. Reg. 376/98 Budget Measures Implementation Act, 2011, S.B.C. 2011, c. 9 Health Authorities Act 3

4 COMPLIANCE CHECKLIST The following is a list of items that must be completed in order to be considered compliant with this document: 1. Subject to the conditions noted in this document, apply an exemption under section 15(1) of the Health Authorities Act to: a. any property owned by a health authority and used by or on behalf of the health authority for the purposes of the Health Authorities Act; and b. any property owned by the Crown or a municipality, or other exempt entity, and which is leased to a health authority and used by or on behalf of the health authority for the purposes of the Health Authorities Act. 2. Subject to the conditions noted in this document, apply an exemption under section 15.01(2) of the Health Authorities Act to property that is owned by a health authority and: a. is designated by the Minister of Health, by order, as being held or occupied for future hospital purposes; or b. is part of a hospital or designated hospital facility and i. occupied and used by a non-profit corporation or organization for a purpose that would exempt the property under another Act if the property were owned by that non-profit corporation or organization (e.g., an area in a hospital occupied by a women s auxiliary), ii. iii. occupied by a third party who, on behalf of the health authority, provides services exclusively for the health authority, occupied by a third party who provides prescribed services for the hospital or hospital facility, or iv. occupied by a medical practitioner who is a professor or member of the UBC medical faculty teaching staff and designated staff under section 45 of the Hospital Act (e.g., staff giving instruction to UBC medical students) for the purposes of that person s teaching position (and Health Authorities Act 4

5 not for the person s own private medical practice if there is no instruction given). 3. If a property owned by a health authority meets the criteria for exemption, apply exempt tax code 78 Health Authorities to all or a portion of the folio. Health Authorities Act 5

6 HEALTH AUTHORITIES ACT EXEMPTIONS General The Health Authorities Act provides exemptions specifically for property owned by a health authority (or owned by an exempt entity and leased to a health authority). Beyond the specific exemptions in the Health Authorities Act, there are several other exemptions that may apply to property used for purposes related to health care (e.g., a hospital or seniors care facility). For instance, a building used solely as a public hospital is exempt under section 220(1)(j) of the Community Charter along with the land under it. The general rule is that if the property is owned by a health authority and meets the criteria for an exemption under the Health Authorities Act, exempt tax code 78 should be applied to the property or appropriate portion of it. If the property does not meet the criteria for an exemption under the Health Authorities Act, consider whether there is some other potentially applicable legislated exemption. 1 The object behind this general rule is to ensure that the property receives the broadest possible exemption. For instance, section 15(1) of the Health Authorities Act exempts property whereas section 220(1)(j) of the Community Charter exempts only a hospital building and its footprint. The land surrounding the hospital will only be exempt if a municipality grants a permissive exemption under section 224(2)(h) of the Community Charter. NOTE The relevant date for determining the application of mandatory exemptions is December 31 of the year during which the assessment roll is prepared: F.R.E.E. (Friends Recycling Everything Everyway) v. Assessor of Area 04 Nanaimo/Cowichan (24 December 1998), Appeal No (A.A.B.). 1 For instance, see section 396(1)(c)(iii) of the Vancouver Charter, sections 220(1)(j) and (k) and 224(2)(h), (j) or (k) of the Community Charter and sections 15(1)(k) and (t) of the Taxation (Rural Area) Act. Health Authorities Act 6

7 Section 15 of the Health Authorities Act The exemption in section 15(1) of the Health Authorities Act should be interpreted as exempting: 1. any property owned by a health authority and used by or on behalf of the health authority for the purposes of the Health Authorities Act; and 2. any property owned by the Crown or a municipality, or other exempt entity, and leased to a health authority, and which is used by or on behalf of the health authority for the purposes of the Health Authorities Act. 2 As a general rule, if property is owned by a health authority and used by or on behalf of the health authority for a health care purpose, it may be assumed that the property meets the requisite use test and the property should be shown as exempt. Apply exempt tax code 78 to the property or any portion of it that meets the use requirement. If a property is owned by a health authority, but: 1. the property is not used for the purposes of the Health Authorities Act (e.g., rented residential properties or a strip mall with retail stores); or 2. the property is not used by or on behalf of the health authority (e.g., most vacant land), the property should be shown on the assessment roll as taxable in the name of the health authority or the occupier, as appropriate. Apply exempt tax code 00 All Fully Taxable Land and Improvements to the property or to any portion of it that does not qualify for the exemption. 2 See City of Victoria v. University of Victoria (1983), Stated Case 181 (B.C.S.C.), where the Court determined that a leasehold was property vested in the university. Health Authorities Act 7

8 When is Property Used for the Purposes of the Health Authorities Act? The purposes of a health authority are set out in section 5 of the Health Authorities Act and include the broad object of developing and implementing a regional health plan and delivering regional health services. The Board and Council Purposes Regulation, B.C. Reg. 376/98, further extends a health authority s purposes to include the construction, supply and operation of housing facilities for low and moderate income individuals and families, the aged and functionally handicapped persons. If the property is being used by or on behalf of a health authority for purposes that come within section 5 of the Health Authorities Act (e.g., a health-related purpose) or the Board and Council Purposes Regulation, the property should be exempt. Keep in mind that buffer land is likely used for the purposes of the Health Authorities Act and should be treated as exempt. If the property is being used but not for the purposes of the Health Authorities Act (e.g., it is rented residential property or a strip mall with retail stores), the property will not qualify for the exemption under section 15(1) the Health Authorities Act but may still qualify under section 15.01(2). See Section of the Health Authorities Act section for further detail. When is Property Used By or On Behalf of a Health Authority? Section 15(1) of the Health Authorities Act was amended by the Budget Measures Implementation Act, 2011, S.B.C. 2011, c. 9 to make it clear that, to benefit from the exemption, the property must not only be vested in (i.e., owned by) a health authority but must also be used by or on behalf of the health authority for a health care purpose. Under this new wording, it is not sufficient that the property be used by any person on their own behalf for some purpose related to health care. This amendment was retroactive to the extent necessary to apply for the purposes of the 2011 taxation year. However, the amending statute contained a grandfathering (Sec 31(3) of the Budget Implementation Measures Act 2011)provision to ensure that any property occupied by a third party and that was exempt on the 2010 roll under section 15(1) of the Health Authorities Act 8

9 Health Authorities Act will continue to benefit from that exemption until the earlier of a change in occupier or December 31, The new rules applicable to third parties are aimed at occupiers newly seeking an exemption for 2011 or a subsequent tax year. When the health authority occupies and uses the property, it is used by the health authority and the property qualifies for the exemption under section 15(1) of the Health Authorities Act as long as the ownership and purpose requirements are also met. It is more difficult to determine whether the property qualifies for an exemption when it is occupied and used by a third party. Whether a third party uses the property on behalf of the health authority will depend on the specific contractual relationship between the third party and the health authority. For instance, residences provided by a health authority for medical professionals at very preferential rental rates and/or as a term of employment may be used on behalf of the health authority. Generally, if a third party occupies space owned by a health authority, assume the third party occupies and uses the space on its own account and not on behalf of the health authority unless one of the two following condition is met: 1. The property and occupier meet the criteria set out in section 15.01(2)(b) to (e). If the third party provides documentation that establishes it is operating on behalf of the health authority, we can reconsider our position. Please contact Assesssment Legal if you have any questions about whether an occupier is using health authority property on its own behalf or on behalf of a health authority. Health Authorities Act 9

10 Specific Use Scenarios Seniors Residences A seniors residential facility operated by a non-profit society on property leased from a health authority and providing some measure of healthcare support to its residents would be considered to be used on behalf of the health authority for the purposes of the Health Authorities Act and exempt under section 15(1). The Board and Council Purposes Regulation specifically provides that a health authority s purposes include the supply and operation of housing accommodation for aged persons: Interior Health Authority v. Assessors of Areas 17, 21 & 23 Penticton, Nelson/Trail & Kamloops, 2008 PAABBC (May 21, 2008). Physicians Offices The recent amendments will mean, going forward, that physicians offices in health authority property should be treated as taxable unless: 1. The property and its physician occupier meet the criteria set out in section 15.01(2)(c) to (e) of the Health Authorities Act. 2. The physician can establish that he or she is using the property on behalf of the health authority. The recent amendments overrule the decision in Assessors of Areas #17, 21 & 23 Penticton, Nelson/Trail & Kamloops v. Interior Health Authority (2008), Stated Case 524 (B.C.S.C.), where the Court confirmed that health authority property need not be used by the health authority to qualify for the exemption under section 15(1) of the Health Authorities Act. Section of the Health Authorities Act Section 15.01(2) of the Health Authorities Act identifies specific situations in which property owned by a health authority will be exempt if it does not meet the requirements set out in section 15(1). The exemption in paragraph (a) of section 15.01(2) requires (i) the property to be owned by a health authority and (2) designated by the Minister of Health. Health Authorities Act 10

11 The exemptions in paragraphs (b) to (e) of section 15.01(2) require the property to be (i) owned by a health authority and (ii) occupied and used in a specific manner. Section 15.01(2) does not apply where property is owned by some other exempt entity and leased to a health authority. Section 15.01(2) exempts from taxation property that is owned by a regional health board and: 1. designated by an order of the Minister of Health as being held or occupied for future hospital purposes; or 2. part of a hospital or designated hospital facility and 3. occupied and used by a non-profit corporation or organization for a purpose that would exempt the property under another Act if the property were owned by that non-profit corporation or organization (e.g., an area in a hospital occupied by a women s auxiliary), 4. occupied by a third party who, on behalf of the health authority, provides services exclusively for the health authority, 5. occupied by a third party who provides prescribed services for the hospital or hospital facility, or 6. occupied by a medical practitioner (e.g., a doctor) who is a professor or member of the UBC medical faculty teaching staff and designated staff under section 45 of the Hospital Act (e.g., staff giving instruction to UBC medical students) for the purposes of that person s teaching position (and not for the person s own private medical practice if there is no instruction given). Property Designated for Future Hospital Purposes Legal Services can check with the Ministry of Health to determine whether the Minister of Health has made an order designating health authority property under section 15.01(2)(a) of the Health Authorities Act. If the property has been designated under this provision, exemption/taxation code 78 should be applied regardless of whether the property is vacant or used for another purpose. Health Authorities Act 11

12 Be aware that the Minister of Health also has the power to designate property that is being held for future hospital purposes under section 396(1)(c)(iii) of the Vancouver Charter, section 15(1)(t) of the Taxation (Rural Area) Act and section 220(1)(k) of the Community Charter. If a designation is made under one of these provisions, and not under section 15.01(2)(a) of the Health Authorities Act, the property should be coded with the exemption/taxation code that corresponds to that other statutory exemption even if the property is owned by a health authority. Hospitals or Designated Hospital Facilities The Occupiers The exemption in section 15.01(2)(b) to (e) of the Health Authorities Act applies only to health authority property in a hospital or designated hospital facility. Hospital is defined in section 15.01(1) to have the same meaning as in the Hospital Act. Section 15.01(1) defines hospital facilities to include labs, laundries and other premises used in conjunction with a hospital. To attract the exemption, the property must first be designated by regulation for the purposes of a specific paragraph in section 15.01(2). To date, no hospital facilities have been designated. For the time being, therefore, the exemption set out in section 15.01(2)(b) to (e) can only apply to the occupiers of hospitals. Again, recall that the exemption in section 15.01(2) will generally only apply if the property does not qualify for an exemption under section 15(1). Paragraphs (b) to (e) of section 15.01(2) are selfexplanatory, but a couple of things deserve mention. First, third party is defined in section to mean anyone other than a health authority. An individual physician, a business and a non-profit organization are all third parties. Second, paragraph (d) contemplates an exemption for an occupier who is providing prescribed services for the hospital or hospital facility. The Interpretation Act defines prescribed in section 29 to mean prescribed by regulation. No regulations have been passed prescribing services for the purposes of section 15.01(2)(d). Health Authorities Act 12