Elk Falls Workers

Campbell River B.C.

Catalyst tax rate ruling

Catalyst loses in three bids to seek tax relief

Vancouver Sun Dec 21st

The right of three more municipalities to tax a major industry to the hilt has been confirmed by B.C. Supreme Court.

Rulings by Justice Peter Voith were released Monday, dismissing almost all the points in three separate petitions where Catalyst Paper Corp. sought relief from high municipal taxes in Campbell River, Port Alberni and Powell River. Voith made a similar ruling concerning North Cowichan in October.

In each community, a Catalyst mill is far and away the largest employer. This year, the company paid each municipality just $1.5 million toward tax bills that added up to a total of $23 million in all four places.

Only one small portion of the most recent rulings favoured Catalyst. It set aside the tax rate imposed on mill property by the Regional District of Campbell River, although not the much larger amount imposed by the city.

Most costs of the Campbell River court case and all costs for the other two were awarded to the cities.

But Lyn Brown, Catalyst’s vice-president of corporate affairs, says it won’t end there. The company will appeal all four decisions. And Catalyst won’t — or it can’t — pay the outstanding tax bill while the court battles continue.

Brown echoed the call of her CEO, Richard Garneau, who has written letters to the media and the municipalities calling for Premier Gordon Campbell to show leadership in finding interim and long-term solutions to what the court agrees is a serious financial situation.

Catalyst has been losing money for years. Its cumulative losses from 2004 to 2008 were in the same 10-figure ballpark as its total property tax bill.

And Voith agreed with the nub of the Catalyst argument — that the tax it must pay is far in excess of the value of municipal services it consumes. Yet he still found it reasonable and legal for councillors, who considered these facts during their deliberations, to impose industrial tax rates up to 10 times higher than what residents pay.

Brown held out hope for a provincially led policy solution to the short- and long-term problem, but she would not say what that might look like.

She said Garneau’s public statements had been interpreted as asking for the province to bail out the cities, but he didn’t actually ask for money. And in the longer term, the answer could be something like a cap on the maximum tax rate.

Meanwhile, both Campbell and his finance minister, Colin Hansen, have been quoted as saying there will be no bailout.

Russell Dyson, the Port Alberni city clerk, said council will review the decision and look at what Catalyst does next, and it will probably launch a court action early in the New Year to obtain an order to pay. Beyond that, he wouldn’t speculate.

Port Alberni has been covering its $3.3-million shortfall with cash reserves, and it will borrow, if necessary, to cover its bills. But it’s not allowed to take on long-term debt, Dyson said, and anything it borrows to cover 2009 liabilities must be repaid in 2010.

dcayo@vancouversun.com

© Copyright (c) The Vancouver Sun

Here’s another article

December 22, 2009 - Posted by | - Mill News, News

4 Comments »

  1. Interestingly enough Catalyst’s threats seem idle now.
    “If Catalyst goes under, mill jobs will be lost, pensions slashed, suppliers forced out of business, sawmills and logging operations jeopardized and local economies and real estate values devastated. And municipal taxes paid by the company will drop to nothing.”
    -The mill jobs are for the most, believed to be lost now.
    -Pensions will carry on for those who can get enough hours in as gate hires in other mills.
    -Suppliers may have to adapt to survive.
    -What sawmills? And the logs werent processed here anyway, so that market shouldnt be affected.
    Real estate is allready tanking but may be pulling out.
    Municipal taxes will be paid for by the title holder of the land will they not.
    One might think its better to make threats while there is still a threat of a loss. Kind of like dont release the hostages before you get the money. Its too late now for any threats to work in Campbell River.

    Comment by Brian | January 9, 2010 | Reply

  2. way to go dick. more of the never ending saga of fletcher, norske, catalyst blowing untold millions on……?
    I mean really, what has the last 17 years proved?
    Remember in 1997 we had 2 billion in the bank and no debt. The hosing continues………..
    What I tink is dat we don’t change wit da markets. Dat way we die.
    oops my spelling isn’t good anymore.

    Comment by Ken B "Killer" | December 25, 2009 | Reply

    • PORT ALBERNI FILES LAWSUIT AS INTEREST ACCRUES……………

      PORT ALBERNI – The City of Port Alberni has officially served Catalyst Paper with legal documents demanding the company pay its municipal tax bill.

      “Port Alberni City Council has instructed our lawyer to commence a lawsuit for a financial judgment to recover the taxes owing,” Mayor Ken McRae told AlberniPortal.ca.

      Catalyst Paper refused to pay the bulk of their municipal tax bills in Port Alberni, Campbell River, Powell River and the District of North Cowichan, arguing the industrial tax rates was too high. They then took their case to the BC Supreme Court last year but lost.

      “Justice Voith found our bylaw on industrial tax rates to be valid,” noted McRae.

      Catalyst Paper plans to appeal the decision, and has until January 18th to file their petition with the BC Court of Appeal in Vancouver.

      In the meantime, their tax bill continues to grow while the City of Port Alberni awaits payment.

      Catalyst Paper submitted a $1.5 million payment on municipal tax deadline day of July 2nd, 2009. As of July 3rd they still owed $3,346,464.28.

      Two payment penalty deadlines passed, meaning Catalyst now owes an additional 10% ($334,646.42) on top of interest that continues to build at $529.47 per day.

      Catalyst Paper’s debt as of today sits at $3,681,110.70.

      Lyn Brown, Catalyst Paper’s Vice President in charge of Corporate Responsibility said she hasn’t seen the legal documents yet, but understands they were served in Port Alberni on Monday.

      “I appreciate that the City needs to take action it deems necessary just as we have done,” said Brown.

      When asked if Catalyst has put aside the money if ordered to pay, Brown said “we’ve adequately accrued for the costs”.

      Comment by CEP member in good standing | January 5, 2010 | Reply

    • Bloomberg Press in the United States is reporting another legal battle for Catalyst Paper. “A trustee for Quebecor World Inc., the magazine printer that changed its name to World Color Press Inc. when it left bankruptcy in July, sued hundreds of vendors for the return of $390 million in pre-bankruptcy payments,” according to reporter Eric Larson. “About 1,700 complaints, filed over the past two weeks in U.S. Bankruptcy Court in New York, target paper-industry firms including Catalyst Paper Corp. and UPM-Kymmene Oji, which were each sued for the return of about $18.5 million. The proceeds will go to unsecured creditors,” he wrote, citing Joseph Steinfeld, a lawyer for the litigation trust with ASK Financial LLP.

      “It’s going to take several years to resolve this many cases,” Steinfeld is reported to have said.

      Catalyst Paper is also being sued by the City of Port Alberni for failing to pay $3.1 million of its municipal tax bill, and that amount grows daily as late penalties and interest are added on.

      Comment by Another Lawsuuit | January 20, 2010 | Reply


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