Catalyst follows through with property tax revolt in B.C.
July 7, 2009 By Pulp & Paper Canada
A deadline for payment of municipal property taxes has passed in British Columbia, with mixed reactions. Catalyst P…
A deadline for payment of municipal property taxes has passed in British Columbia, with mixed reactions. Catalyst Paper, protesting its tax rate, paid only $1.5 million each to four B.C. municipalities. One of those four municipalities, Port Alberni, was relieved the other large forest products company that contributes to its tax base, Western Forest Products, was more cooperative. Western Forest Products’ spokesperson Gary Ley confirmed that the company paid its full $1.8 million municipal tax bill to the City of Port Alberni, according to the Alberni Valley News.
In early June, Catalyst Paper petitioned to the Supreme Court of British Columbia for judicial review of recently set property tax rates in North Cowichan, Port Alberni, Campbell River, and Powell River. These are the four municipalities where its B.C. paper mills are located. It seeks declarations, under Section 262 of the Local Government Act, that the tax rates are unreasonable and therefore beyond the municipalities’ jurisdiction.
Catalyst Paper owed $23 million in property taxes to the four municipalities.
Quoted in the Vancouver Sun, Ken McRae, mayor of Port Alberni, called the company’s tax revolt unacceptable. “I was really hoping they wouldn’t break the law,” he said.
The Sun reports that Catalyst has been warning the four municipalities — Port Alberni, North Cowichan, Campbell River and Powell River — for more than five years that they needed to lower the tax rate on industrial land. Catalyst President Richard Garneau reportedly told them in a letter last January it would only pay them $1.5 million each. He said the company would have to borrow to pay the $23-million bill, something he refused to do.
McRae told the Vancouver Sun the tax shortfall — $3.3 million in his community — means the town will have to draw down on its reserves, money it hoped to use to lever federal and provincial stimulus funds for shovel-ready projects.
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