Catalyst pays its 2010 taxes

Grant Warkentin - Campbell River Mirror Published: July 02, 2010 10:00 AM

Despite filing another legal challenge against the city, Catalyst Paper will pay its full 2010 tax bill in Campbell River. On June 30 the company, which owns the Elk Falls mill, announced it would pay its full property tax bills in three of the four B.C. communities where it operates. In Campbell River, that means Catalyst will pay the city $4.8 million. However, the company recently filed a challenge in court against Campbell River, arguing that the city's tax rates for the portion it collects on behalf of the regional district were too high and were not in line with a previous BC Supreme Court ruling. If Catalyst wins the latest challenge, it could mean a $453,000 reduction in the company's taxes. And although Catalyst is paying its bill here, it's not paying the full bill for its Crofton mill in the District of North Cowichan."In light of its continued pursuit of a legal remedy regarding the North Cowichan tax levy, Catalyst will pay $1.5 million to that municipality in addition to all property taxes collected by the municipality on behalf of other governments," says a company news release.

The company is also calling for province-wide tax reform. "Since Catalyst launched legal actions in 2009, a growing number of organizations have championed the need for a more sensible BC municipal tax structure," said Kevin J. Clarke, the company's new president and CEO, in the news release. "Competitive taxation keeps companies and communities viable in the post-recession economy. This helps preserve existing jobs and it creates the right conditions for new ones." Since Catalyst Paper first refused to pay its full tax bill in 2009, setting off a series of legal challenges, other corporations and associations have come forward to complain about the property tax system in B.C. The provincial Chamber of Commerce, the Business Council of BC and the Canadian Federation of Independent Business have all called for tax reform in the province."What began as a trickle last year has turned into a tidal wave," Clarke said. "B.C. aims to attract business with a host of provincial benefits. But to operate here long-term, a business must eventually sink roots into a municipality, and that's when the decision to locate in B.C. can come back to haunt a company and its local, national and international investors. That's because B.C.'s on-the-ground industrial taxation levels are investment killers, job killers, and community killers, and jurisdictions competing with B.C. know it."

A provincial government-appointed task force is currently reviewing how major industries are taxed, and will report in September. "The results of this review will have to be game-changing for B.C.," Clarke said. "A report that delays, denies or that fails to produce results that enable B.C. industry to compete in the post-recession global economy would erase all the provincial government's investment-attraction efforts to date."

The Elk Falls mill has been shut down since early 2009, and the kraft pulp mill has been shut down since 2008. The company has been trying to persuade the remaining union employees to accept a deal which will reduce their wages and benefits, but allow two paper machines to start up again. So far the two sides have not reached an agreement.

Catalyst's tax bills

• PAID Campbell River: $4.8 million
• PAID Port Alberni: $5.2 million
• PAID Powell River: $3 million
• PAID Snowflake, Arizona: $747,000
• UNPAID North Cowichan: $6.5 million (Catalyst will pay $1.5 million of the bill, for now)