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Newfoundland’s pulp and paper act under review


September 11, 2007
By Pulp & Paper Canada

Grand Falls-Windsor, NL — Newfoundland’s 1905 pulp and paper act that exempts paper companies from paying municipa…

Grand Falls-Windsor, NL — Newfoundland’s 1905 pulp and paper act that exempts paper companies from paying municipal taxes will soon be reviewed, notes The Advertiser. This action was requested by the Grand Falls-Windsor town council after the town received notice from the local Abitibi Consolidated mill that the company would be cutting the annual grant that it pays in lieu of taxes by 40% for the next four years, an annual reduction of approximately $325,000 for the town’s coffers.

The history of the act dates back to a legislative agreement made in 1905 between the government and the A.N.D Company (the paper company at that time) that exempted it from municipal taxes, reports Jennifer Pelley of the Advertiser. After the town was incorporated in 1961, it was agreed that the company would give an annual grant in lieu of taxes.

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Councillor Darren Finn was quoted in the Advertiser as saying that he believes that municipalities should have the ability to set taxation for businesses operating in the towns, and notes that municipal governments operate within a small budget and cannot live with the uncertainty of having major portions of their tax budget being variable. “If our town decided that Abitibi was deserving of a $300,000 or $400,000 grant, then the town could decide to give that grant, which is different than the company saying ‘We are withholding.'”

The first step of the process will be for both the minister of municipal affairs and the minister of natural resources to review the request, a spokesperson with the Department of Municipal Affairs told the Advertiser, then it will need cabinet approval before it moves to the House of Assembly to be discussed and voted on. The next sitting of the house of Assembly may not be until next spring.


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