By Gordon Hamilton, VANCOUVER SUN
The industrial tax revolt begun by pulp companies is spreading to resource towns throughout B.C., the president of the Union of B.C. Municipalities said Wednesday. Robert Hobson said civic leaders are reporting that their major industries are are either seeking tax concessions or are closely monitoring the legal challenge to property taxes by Catalyst Paper now working its way through B.C. Supreme Court. A decision on that case is expected this month. Three other companies, West Fraser Timber, Mercer Inc. and TimberWest Forest have also filed suits against the towns where they have operations. All three have either sued, withheld taxes or or turned over to the courts a portion of their taxes to protest what they say is an unfair, unsustainable and illegal tax rate imposed by resource towns. The issue has been simmering for years but boiled over this July when the companies did not pay all their taxes. Major industry is assessed at a rate that can be 10 times or more the residential property tax rate.
Even Hobson’s own community of Kelowna, where he sits on council, is not immune to the challenge. Major employer Tolko Industries has told the municipal council there that the industrial tax rate is a burden and that the company is having to borrow to pay its taxes, he said in an interview at the association’s annual meeting in Vancouver. Civic leaders are concerned, Hobson said. The UBCM passed a resolution Wednesday calling on the provincial government to open talks. But the municipalities want a clear framework that recognizes their right to control property taxation. If that’s interfered with, they want compensation. Hobson said a simple fix, such as a cap on the industrial tax rate, would initiate a cascading effect. Municipalities would be forced to raise taxes on other tax classes to make up the lost revenues. He said municipalities rely on property taxes for their revenues, which limits their capacity to raise money to provide services. He said UBCM needs government to address what he termed the fiscal capacity of municipalities. “Local governments are being asked to do more and do not have as wide a range of sources of revenue as senior governments have. We rely almost entirely on property taxes for our source of revenue.”
Finance Minister Colin Hansen said in an interview that government is ready to engage with municipalities. He said the government is following the tax revolt closely. “But it’s not something we can comment on now since it is before the courts. “The approach we have been taking is that we believe that the companies and the municipalities have to sort it out.” He said the ratio between residential tax rates and industrial tax rates in some communities is significant. “It’s something we certainly believe that municipalities need to address.”
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Don Quixote Note: . Mr. Jim Baskerville, Regional Manager, Okanagan Operations, Tolko Industries Ltd., re: Discussion on Property Taxes. will be at COW Meeting Monday Morning at 8:40. (P.6)
Committee of the Whole
Start Time: 8:40am
Location: Council Chambers
Agenda Index 
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Also see http://vernonblog.blogspot.com/2009/09/industrial-tax-revolt-against-towns.html
1 comment:
This should be a very interesting discussion at CoW. Since the City made the decision during the McGrath years to drive industry out of town, there really isn't the heavy dependency on taxes from large industry that there would be in Spallumcheen or Coldstream. It will be very interesting if they pitch for a break on their commercial rates for the new head office in Vernon, however.
If Council reacts sympathetically, will they then have to deal with such requests from other corporate head offices? (Kal Tire)
Interesting times. If residential taxes in these other places need to go up to pay for reduced industry taxes, how long before that sector revolts?
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