A Federal Government Land and Building Inventory for British Columbia
PUBLIC POLICY SOURCES NUMBER 4

Robin Richardson and Michael Walker

Contents

Preface

Executive Summary

Acknowledgement

About the Authors

Introduction

The Regional Distribution of Federal Grants-in-Lieu to Local Governments in Canada

The Physical Distribution of Federal Land and Buildings in British Columbia by Federal Department and Crown Corporation

The Value of Federal Land and Buildings in British Columbia Federal Properties in British Columbia that Should be Declared Surplus, Devolved, or Privatized

Recommendations

Conclusion

Appendix A

Bibliography

The mission of The Fraser Institute's International Centre for the Study of Public Debt is to inform the public in Canada and abroad about the severity of its all-government debt problem, and to propose responsible and efficient ways of reducing the public debt. It is to the second part of this two-fold mission statement that this study is addressed.

Although expenditure reduction and continuing expenditure control over a prolonged period is the main way that Canadian governments should generate the budgetary surpluses needed for debt reduction, and eventually, debt elimination, there is also some scope for reducing the budgetary deficit by the sale of assets such as land, buildings and government business enterprises.

This study, "A Federal Government Land and Building Inventory for British Columbia," begins a long-term research project of The Fraser Institute's International Centre for the Study of Public Debt called A Privatization Shopping List for the Government of Canada. The authors have identified 3,550 individual properties in British Columbia worth $4.1 billion. Many of these properties may be surplus to the government's needs and should be sold, with the proceeds used to help pay off the federal debt.

The magnitude of the issue on a national scale is quite significant. Extrapolating from the BC data computed by the author, if the 7.9 percent of grants-in-lieu of taxes that BC receives translates into $4.1 billion in properties in the province, then nationally the federal government has almost $52 billion in property. If all this property was sold, and the proceeds used to pay down debt, it could reduce the federal government's interest burden by over $3 billion annually.

The authors provide a methodology for British Columbians to identify federal properties in their communities throughout British Columbia that are surplus to the needs of the federal government's core activities, and a challenge to British Columbians to urge the federal Minister of Finance to sell these properties as part of his deficit elimination plan. The only properties that should be retained are those that are absolutely essential to the core operations of the federal government.

It is our hope that this study will be used by concerned taxpayers throughout British Columbia. This study should be of interest in every community, to federal, provincial and local government officials, business associations, realtors, educators, private investors, aboriginal communities, and taxpayer groups.

The use of the proceeds from the sale of redundant federal properties to achieve a balanced budget more quickly than would otherwise be the case, and to reduce and eventually eliminate the federal debt is a desirable policy for the Government of Canada at this time of continuing fiscal difficulty.

-Michael A. Walker

1. The government of Canada owns $4.1 billion in land and buildings in British Columbia as of July 1, 1994. About $1 billion of these properties, mainly in transportation, are apparently surplus to its needs and should be sold to help eliminate the deficit and begin reducing the national debt.
2. This study compares the regional distribution of provincial/territorial population with federal payments of grants-in-lieu of local taxes (a proxy for the regional distribution of the value of federal properties) and shows that British Columbia has been severely under-represented compared to every other province except Alberta as far as the value of federal land and buildings is concerned.
3. In 1993, British Columbia accounted for only 7.44 percent of federal grants-in-lieu to all Canadian local governments. British Columbia's population was 12.69 percent of Canada's population.
4. The land holdings of all federal entities in British Columbia (government departments and crown corporations) amounted to 748,731.2 hectares or 3.79 percent of all federal land holdings in Canada.
5. The government of Canada owns 6,070 buildings in British Columbia with a total floor area of 2,501,249 square metres. This represents 10.04 percent of the total floor space of all federal buildings in Canada.
6. The government of Canada is engaged in several commercial operations such as restaurants, parking garages, fish hatcheries, and logging operations. It also owns vacant industrial land clearly not required by the government. All of these commercial operations of the federal government should be considered for disposal.
7. The government of Canada should make it clear to all Indian bands or nations in British Columbia that all federal properties surplus to its needs in British Columbia will be sold to help eliminate the federal deficit and begin reducing the federal debt. If a property involves aboriginal interests, the Indian band or nation should be given the right of first refusal, following a reasonable period, on any offer to purchase this property.
8. The government of Canada should not retain ownership, as is proposed under its new National Maritime Policy, of federal lands at Canada Port Authority sites or at the Vancouver International Airport and other airports. The 1994 assessed value of these properties was $929 million or almost 25 percent of the value of all properties owned by the federal government in British Columbia. It is far more important for the government of Canada to sell these properties to reduce its debt than to be a landlord to maritime port and airport authorities in the province of British Columbia.
9. In addition to Transport Canada, other departments with properties that should be declared surplus and sold include Forestry Canada and National Defence.
10. Some federal properties should be turned over to the province of British Columbia as federal programs and departments are devolved to the provinces. Major examples highlighted in this study include Agriculture Canada, Environment Canadas National Parks Service, Corrections Canada, and Canada Mortgage and Housing Corporation.
11. Federal properties that would be sold as part of the privatization of a Crown corporation include the holdings of Canada Post, the Canadian Broadcasting Corporation, Canada Harbour Place Corporation, and the remaining CN properties in British Columbia held by the Canada Lands Company Ltd.
12. Everyone in British Columbia interested in a more efficient use of their tax dollars and in the elimination of the federal deficit should investigate the federal properties located in their communities, as identified in this study, and communicate their findings to the federal Minister of Finance and to their member of Parliament.
13. All proceeds from the sale of government of Canada properties should be used for deficit elimination and eventually be applied toward reducing the federal debt. The only properties that should be retained are those that are absolutely essential to the core operations of the federal government.

The Fraser Institute's International Centre for the Study of Public Debt wishes to acknowledge the financial assistance of the Donner Canadian Foundation in enabling this study to be completed and published.

Robin M. Richardson, M.A., C.F.A., is President and Chief Economist of R.M. Richardson and Associates, a Victoria, BC-based economic and financial consulting company, and Consultant to The Fraser Institute's International Centre for the Study of Public Debt. Mr. Richardson holds a B.A. in Honours Economics from the University of Western Ontario, and an M.A. in Political Economy from the University of Toronto. Mr. Richardson is also a Chartered Financial Analyst. Mr. Richardson was elected member of Parliament for Toronto-Beaches in 1979-80.

Michael A. Walker is Executive Director of The Fraser Institute. He received his Ph.D. in Economics from the University of Western Ontario. He has written, edited, or co-authored dozens of Fraser Institute publications.