Counterpoint: Catalyst Paper’s corporate welfare

City of Powell River’s current council, with a majority of progressive councillors, may not be much different than the old city council when it comes to serving the interests of a single taxpayer: Catalyst Paper Corporation.

It is extremely disappointing to see the finance committee, chaired by councillor Russell Brewer, recommend a paltry $300,000 increase in Catalyst’s taxes.

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Let’s review the sorry situation. In 2007, Catalyst paid $4.94 million in taxes. In 2009, it played the bully and said it would only pay $2.2 million. Council, led by Catalyst cheerleader and then councillor Dave Formosa, immediately caved and agreed to lower the company’s taxes. Other Catalyst communities refused and received their full tax revenue, backed by the Supreme Court.

Then a “revitalization” bylaw (it should have been called the corporate-welfare bylaw) officially lowered Catalyst’s tax bill to $2.2 million and since that time we have effectively paid Catalyst approximately $15 million (it now pays $2.8 million following an increase of a half million in 2014).

Every homeowner and small business is contributing to this ill-conceived giveaway. Residential taxpayers have seen rates rise by an average of 68 per cent and local businesses have seen a 64 per cent increase to help out Catalyst.

Everyone recognizes the importance of the Catalyst mill to the community, but what is so infuriating about this situation is that all this money, which could have been put to excellent use serving Powell River, has had virtually no impact on Catalyst’s bottom line.

Municipal taxes make up 0.6 of one per cent of Catalyst’s operating costs. The $300,000 increase is lunch money for the company. It can gain or lose that much just on currency fluctuations surrounding a single sale.

And how is it that Catalyst gets to negotiate the taxes it pays? Do you get to negotiate your tax bill?

Brewer and mayor Formosa say they are worried because the mill has a new owner, yet before it was sold the mill reduced its costs by $34 million. The new owner could easily take $2 million of that savings and pay its fair share. The notion that Catalyst will leave if forced to pay its taxes is just fear-mongering.

Council should recognize it is not negotiating with the Powell River Company of 1912; the company that promoted music and arts and contributed Powell River Recreation Complex. Catalyst clearly does not care enough about our community. Of course, the company is going to say it cannot afford its tax bill. That’s what big corporations always say.

On the flipside, while municipal taxes mean next to nothing to Catalyst, they are a real disincentive for local businesses and can be a significant portion of their operating costs. They are a barrier, especially to new businesses that council claims it supports. Also, residential taxpayers now pay rates comparable to those in some large cities.

This regrettable situation is partly the result of disengaged citizens. I do have a certain amount of sympathy for Brewer and his colleagues as they are subject to tremendous pressure from Catalyst.

Councillors need to know residents want this giveaway to end. The tax bylaw is up for renewal or repeal by October 31. Residents can tell council to cancel Catalyst’s tax loophole by writing to the mayor and council at info@cdpr.bc.ca.

Murray Dobbin is a Powell River freelance writer and social commentator.

Copyright © Powell River Peak

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