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City considers raising industrial tax rate

Budget committee recommends 500000 annual jump for paper mill

City of Powell River Council will consider a recommendation to increase Catalyst Paper Corporation’s industrial tax by $500,000 per year over a three-year period.

At the city’s budget committee meeting, September 16, a recommendation was made to increase Catalyst’s taxes to $2.75 million in 2015, 2016 and 2017. The recommendation to council also suggests best efforts with negotiations with Catalyst for the ability to add additional compensation such as surplus lands, or other benefit to the city, in accordance with the agreement in principal between the city and Catalyst.

Councillor Chris McNaughton, who chairs the city’s budget committee, said one of the things the city recognized is that it needed to retain its largest corporate taxpayer, and that is Catalyst Paper Corporation.

“In doing so, we had to realize a tax shift from Major Industry Class Four to residential and business taxpayers,” he said.

“We’ve worked through that and we’ve finished that part of the journey and now we are revisiting the question of major industry taxation.”

After extensive discussion on the issue at the budget committee, McNaughton said they passed a resolution to look at a new tax revitalization bylaw that would result in an increase in Major Industry Class Four taxation.

The largest major industry tax base in its present form in Powell River could be finite, McNaughton added. Through the tax shift from industrial to residential and commercial, as tough as it has been, it has created a degree of independence with the residential and commercial tax base, so if the industrial tax base is lost, as has happened elsewhere, Powell River will be in better shape for it, he said.

“We are looking at what would be the impact of a Catalyst closure,” McNaughton said. “It has happened. It could have been us rather than Campbell River.”

McNaughton said he believes the work that city council and the mayor did was instrumental in keeping Catalyst in Powell River.

Councillor Russell Brewer created a series of comparisons for the budget committee meeting that shows Powell River is at the bottom end of industrial taxation.

“Part of my point is that in comparison to the rest of the province, we are right near the bottom,” he said. Of the 72 communities in BC with major industry taxation, four communities have a lower tax multiple than Powell River and 67 have a higher multiple.

Brewer said that if Powell River increased to the provincial average in terms of major industrial taxation, taxes would be $3.7 million, rather than the 2014 major industry assessment of $2.25 million. He said the $3.7 million figure is more in line with taxation prior to Powell River’s industrial tax drop in 2008.

In Port Alberni, which also has a Catalyst pulp and paper mill and a substantially lower tax roll, the 2014 industrial taxes are $4.85 million, according to Brewer. North Cowichan, where the other Catalyst mill is located, has a higher tax roll than Powell River and an industrial tax of $3.8 million.

“My point is we need to move a little more toward the provincial average,” Brewer said. “The provincial average is fair. It’s a starting point, anyway.”

According to a comparison of assessments and taxes provided by Brewer, between 2008 and 2014, major industry tax assessments in Powell River dropped 10.6 per cent and taxes over the same span of time dropped 51.4 per cent.

Residential tax assessment values dropped 6.3 per cent in Powell River over the same time span and residential taxes increased 43.1 per cent.

In terms of local businesses, assessments increased 11.7 per cent and taxation has increased 28.9 per cent.

The shift in taxation during those seven years has cost the average property owner about $3,000, Brewer said.

“I think this is the most critical discussion we have going right now,” he added. “I think this rate of $2.2 million over the last four years has impacted everything else we are doing and is why we are so squeezed financially.”

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