The British Columbia Supreme Court has rejected an appeal from a religious group that sought a property tax exemption on its 31-acre island near Swartz Bay, B.C., arguing the island is a “place of public worship.”
The Matsuri Foundation of Canada, a registered charity dedicated to advancing the Shinto religion, was denied the exemption on its $12.9-million Knapp Island property by the Property Assessment Appeal Board in March 2023.
Because Knapp Island is not within an incorporated municipality, it falls under the Rural Area Taxation Act, which allows for property tax exemption for “every place of public worship.”
The court sided with the property assessment board in finding that the Matsuri foundation had not shown that the island was open and accessible to the public, and therefore its principle use was not for public worship.
“The board found that to the extent that Knapp Island was used for worship, that worship was private,” B.C. Supreme Court Justice Francesca Marzari wrote in her decision(opens in a new tab), noting the island can only be reached using one of Matsuri’s own boats or a private watercraft.
The Matsuri foundation argued the island was nevertheless entitled to the exemption on “fairness and equity grounds,” citing similar tax-exempt properties in the region.
The property assessment board reviewed 19 other properties in the B.C. Gulf Islands that were given either full or partial tax exemptions on religious grounds. However, the board ruled those properties all differed from Knapp Island in their size, population and public access by ferries and roads.
For 20 years, the Matsuri foundation enjoyed tax exemption when it owned and operated the Brightwoods Spiritual Centre on nearby Salt Spring Island. It had been granted the exemption as a place of public worship on the 7.5-acre property, which featured a large meeting room, smaller rooms for retreats, a sacred forest, walking paths, and a shrine.
“It was mostly used for spiritual practice and ceremonies by people who lived on Salt Spring Island,” the judge wrote in her decision. “No priest or other person resided there, and it was managed by a property manager.”
Matsuri closed the site in 2021 and relocated to Knapp Island the following year.
Private home, ‘private harbour’
The Knapp Island property features two separate plots of land; a southern parcel valued at $5,107,000 with buildings valued at $3,427,000; and a northern parcel valued at $4,410,000 with no notable buildings on it.
The southern parcel features the two-storey Shin Mei Spiritual Centre, which houses a Shinto and Buddhist meditation and prayer room, kitchen, living and dining rooms and a larger reception room on the second floor. There is also a Shinto and Buddhist temple, a 5,000-square-foot private home, three guest apartments, a water treatment facility, multiple shrines and marine wharf.
Rev. Ann Evans is the director of the foundation and the resident Shinto priest on Knapp Island. According to the court decision, her partner owned the island until it was transferred to the foundation in September 2021 as part of an estate planning arrangement.
The Shin Mei Spiritual Centre’s website says the island is open to the public with a free water taxi on weekends making the 15-minute crossing from Sidney, B.C.
The court upheld the decision of the property assessment board in finding that the principal use of the home and the apartments was for Rev. Evans, her spouse and their guests.
The court also agreed that the “possible uses of the other improvements as places of public worship would be somewhat unclear,” when viewed by anyone passing the property from the water.
“The transition from private use to public use would not be readily apparent from the water, which is the closest a person would be able to view the improvements without entering onto what a passerby might consider to be private property,” the decision said.
“This may be even more so, given that the ‘PRIVATE HARBOUR’ sign at Knapp Island’s only access point may deter some passing members of the public who may not otherwise see or notice the smaller and less prominent sign welcoming the public to meditate, study, and pray.”
In addition to rejecting the foundation’s tax exemption appeal, the court awarded costs for the legal proceedings to the property tax assessor.
Source: CTV News
