Catalyst has lost its first battle with four coastal B.C. communities over industrial taxes.

B.C. Supreme Court Justice Peter Voith has dismissed Catalyst's case against North Cowichan, and ordered the pulp and paper company to pay its taxes.

The news comes as a relief to Port Alberni Mayor Ken McRae, but he said he remains cautious: Port Alberni has not yet received their own decision in a separate petition that Catalyst made against them.

Campbell River and Powell River are the other two communities that have Catalyst paper mills.

"I don't know how many times they're going to appeal it," McRae said of Catalyst. "It's kind of a relief but we'll see. I'm always suspicious."

Catalyst Paper requested the review of “unfair property taxation” earlier this year and paid the City only a portion of property taxes owed. The payment was based on Catalyst’s assessment of services received. Catalyst challenged the bylaws in all four mill communities in an attempt to change the existing assessment-based taxation model to their proposed consumption-based model.

Justice Voith noted that while municipalities are entitled to discriminate in fixing property tax rates, the industrial tax rates — in North Cowichan at least — are too high.

He also noted that imposing a requirement to establish property tax rates based on consumption patterns across the different property classes presents practical problems. Although Catalyst presented in court a detailed model of taxation based on consumption, municipalities would have to expend the same amount of time and money to create their own models, he said.

Port Alberni has incrementally lowered its industrial tax rate over the past two fiscal years as part of a five-year plan.

McRae said the judgment reiterates that municipalities have control over how and when they reduce industrial taxes. "We've been doing that for two years. We're going along the right way."

He said the debate about high industrial taxes has been bouncing around Port Alberni since he first became mayor several terms ago.

"It's been a albatross around our necks for a long time."

— With files from Grant Warkentin, Black Press

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