Paper Excellence will qualify for the third year of a revitalization tax exemption program even though it is no longer manufacturing paper products at the Catalyst Paper Tis’kwat mill.
At the June 14 City of Powell River committee of the whole meeting, in correspondence, Pat Martin said it is upsetting to think Catalyst will receive a tax break this year of $3.4 million in view of the fact it has ceased operations. She asked if the city could let her know if it has obtained a legal opinion on whether it could rescind the bylaw without major legal consequences, given that circumstances have changed.
“It should also be mentioned to whomever drafted the bylaw that it is flawed in that it didn’t include a clause stating that if the mill closed, the tax exemption would no longer be applicable,” stated Martin.
Mayor Dave Formosa said the city has the revitalization tax bylaw in place.
“We’re all aware of it and it goes for one more year,” said Formosa. “If, for some reason, taxes don’t get paid, then we get all of the money back for the last two years. If it gets paid, it goes on for one more year. God willing, it will go up to six-point-some million, and hopefully, the new council will do that because it’s a very valuable site.”
Committee chair councillor Cindy Elliott said she believes the community is a bit “put out” that the revitalization agreement is continuing, but the city is obligated to follow the agreement, as is the company. So as long as all of the taxes are paid on time, this agreement stands until after 2023, added Elliott.
Councillor Maggie Hathaway said Martin raises a good point. She said the bylaw is called a revitalization agreement.
“I haven’t read it recently, so I don’t know what kind of clause is in there, but shutting down is not revitalization,” said Hathaway. “I’m just wondering if there is a breach of the contract under those terms?”
Formosa said staff and the city’s lawyers have gone through the bylaw.
“I’m disappointed there wasn’t a clause in there that stated if they closed; I can’t believe it wasn’t there, but apparently it is not there,” said Formosa. “We live with that revitalization bylaw. That is the situation.
“I agree with Ms. Martin and I kick myself in the butt for not reading it myself, thoroughly, but I figured our lawyers are pros and had us covered.”
The committee voted to note and file the correspondence.
During question period, the Peak asked once the bylaw expires, will Paper Excellence be faced with full taxation amount, even given the fact it is not manufacturing anything at the mill.
Chief administrative officer Russell Brewer said that is correct and taxation will depend on whatever the mill rate is set for major industrial properties for the year 2024.
Mayor Dave Formosa said the mill rate can be adjusted.
Councillor George Doubt said the answer all depends on Paper Excellence still owning the Catalyst mill in 2024.
“The property is for sale and many things can happen between now and then,” said Doubt. “They may sell the property and a lot of things can change.”
According to the mill’s 2022 property tax notice, supplied by Martin, full property taxes on the mill site would amount to $7.1 million, and with the $3.4 million exemption granted under the bylaw, property taxes owing by Catalyst are $3,688,389.19.