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Pope & Talbot asks city to cut taxes for Harmac mill


December 12, 2007
By Pulp & Paper Canada

Nanaimo, BC — The financially troubled Harmac pulp mill wants city council to consider reducing 2008 property taxe…

Nanaimo, BC — The financially troubled Harmac pulp mill wants city council to consider reducing 2008 property taxes at the Pope & Talbot Inc.-owned facility by up to 50%. The mills General Manager Paul Sadler spoke to the city council last week, noting that while it may be business as usual right now, the mill is at a crossroad. Over 100 workers have been laid off in the last six months.

Many factors are putting pressure on the mill, including dependency on the U.S. market, with its housing downturn and currency issues, high employee benefits, high property taxes and regulations, licensing and fees. Sadler noted that industrial taxes in Nanaimo are about double that of nearby municipalities. The freeze on industrial taxes in the city’s draft 2008 budget may relieve some of the financial pressures on Harmac and Nanaimo’s other sawmills, but Harmac, one of Nanaimo’s biggest taxpayers, would still have about $3.8 million in property taxes to pay in 2008.

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Mayor Gary Korpan said the city is legally unable to give a special tax rate to individual properties. “Any change to a tax rate has to apply to an entire class or category,” he said. “Thats why we’re freezing the industrial tax rate for 2008, but that means a higher proportion being paid by the residential and commercial taxpayers.”

Rick Thurmeier, past-president of the Greater Nanaimo Chamber of Commerce, noted that Harmac affects much of mid-Vancouver Island. He believes that the provincial and federal governments should be more involved with financial relief for Harmac. Harmac is part of a pulp and paper task force asking for a 50% reduction in property taxes across the board in BC.

Sadler noted that the services Harmac receives for its tax dollars are low. “We have our own water supply, we have our own fire department and we train employees for emergency response situations.”

Sources: Nanaimo Daily News, Dec. 5, 2007 and the Nanaimo News Bulletin, Dec. 6, 2007.


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