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Mayor suspicious about premier's connection with Catalyst CEO |
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By Grant Warkentin
Mirror Staff (Campbell River)
Oct 14 2005
While executives at Elk Falls mill continue to try and persuade the
city to lower industrial tax rates, Mayor Lynn Nash worries the
province might get involved.
"I would hope the premier would not tread in areas that are
traditionally in the domain of local government," he said. "He's
indicated nothing will be done without major discussion with the Union
of BC Municipalities."
Nash was concerned about a letter he received Sept. 22 from the
premier, which was also addressed to mayors of other Island communities
with Catalyst (formerly NorskeCanada) pulp and paper mills.
In the letter, Premier Gordon Campbell said industrial taxation is an
important issue throughout the province, and "is a broad policy issue
involving approximately 80 municipalities with major industrial
assessment located throughout B.C."
The premier pointed out industrial taxation is an important issue to
the provincial government and said his government was interested in
removing "barriers to economic growth, and [finding] solutions to
overcome them that can be taken by industry or government."
"The province has a critical interest in building a competitive
economic climate conducive to greater industrial development," he said.
Campbell's letter was in response to concerns raised by the mayors of
Port Alberni, Powell River and Duncan - communities with mills owned
and operated by Catalyst. He assured the mayors that if the provincial
government was to take any action, it would consult with the UBCM first.
Nash hopes so. He's concerned about what hidden meaning might lie beneath the words of the premier's letter.
"I tend to be a little suspicious of things myself and not take things
at face value," he said, pointing out the premier is well-acquainted
with Catalyst president and CEO Russ Horner and other industrial
leaders.
"I know that Mr. Horner and his colleagues meet with the premier regularly," Nash said.
Nash said the city has been working for the past decade to reduce its
reliance on its industrial taxpayers, as well as gradually lower their
tax rates.
In the past, almost two-thirds of the city's tax revenues came from
industrial taxpayers. Now, the city receives about one-third of its
total revenue from industrial taxpayers and Nash said the city wants to
eventually see it reduced to about 20 per cent.
But it's not easy - the city has been reducing that number by one or
two per cent each year, which translates into a significant amount of
money.
"That's $300,000 to $400,000," Nash said. "That's cash."
Nash is concerned with the reduction Horner wants for the mill's taxes
- he is asking the city to halve the mill's taxes, about $4 million.
The result would be catastrophic for the city if the entire reduction
was granted in one year, Nash said.
"You can imagine what that would do to your residential tax rate if we
were to do it in one fell swoop," he said. "Programs would be
devastated, let's just put it that way."
Nash said the city wouldn't allow the tax reduction to happen all at once - it would be too harmful for the city.
But the city is continually looking for ways to reduce its reliance on
taxes paid by its biggest taxpayers and Catalyst continues to pressure
the city to reduce its tax rate more quickly.
In 2003, Powell River's municipal government granted NorskeCanada a
million-dollar tax cut over five years for its mill in the community.
The company was hopeful other municipalities would follow suit and has
tried for years to persuade Island communities to lower tax rates. |
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