Pay your taxes, judge orders Catalyst Paper
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Updated: October 20, 2009 4:17 PM
Catalyst Paper will have to pay its property taxes, the Supreme Court has ruled.
At least, in North Cowichan. Campbell River, Powell River and Port Alberni are now waiting to see what Justice Peter Voith says about Catalyst’s appeals against their industrial tax rates.
Those rulings could be similar to the North Cowichan decision, which the judge said lays out the framework for dealing with Catalyst’s petitions in all four communities.
“The City of Campbell River looks forward to receiving the court’s decision shortly with respect to the Catalyst petition against Campbell River,” Mayor Charlie Cornfield said in a statement Friday afternoon.
Catalyst Paper requested the review of “unfair property taxation” earlier this year and paid the city only a portion of its property taxes. The payment was based on Catalyst’s assessment of the services received at the mill site.
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, which would charge industrial taxpayers only based on the services they consume.
“Campbell River and the other communities where Catalyst operates consistently rejected the proposal to revise property taxation according to this model,” Cornfield said. “We made it clear we would defend our property tax bylaw and that we expect all taxpayers to pay their bill.”
The company complained earlier this year that its industrial taxes were too high, and vowed to only pay a part of its tax bill it deemed fair.
In total, Catalyst only paid $6 million of the $23 million it owes the four municipalities.
In Campbell River, Catalyst’s refusal to pay its full bill left the city with a nearly $5 million budget shortfall.
Lyn Brown, spokesperson for Catalyst Paper, said the company was disappointed with the North Cowichan decision.
“We see it as an issue that’s of broad concern to the business community of B.C.,” she said.
Brown said the decision doesn’t change the fact that industrial tax rates in the four communities are “unequitable and unaffordable for class four industries and particularly our mills.”
In his Oct. 16 judgment, Voith reviewed Catalyst’s evidence and didn’t find it proved the corporation’s taxes were unreasonable or inequitable.
“Some of the evidence goes to broad structural difficulties associated with major industry doing business in British Columbia or in Canada as opposed to in other jurisdictions.
These are matters properly addressed by different levels of government and not by the courts,” he said.
Catalyst has 30 days to decide whether or not to appeal the judgment and Brown said the company is carefully reviewing the judge’s decision.
CFO resigns
On Oct. 13, Catalyst Paper accepted the resignation of the company’s chief financial officer David Smales.
According to a company news release, he will leave the company effective Nov. 4, 2009 to join Aecon, a Toronto-based construction and infrastructure development firm.
“David has provided strong financial oversight during a period of significant change for our company and industry. He guided several key business transactions to timely completion,” said Catalyst president and CEO Richard Garneau.
“On behalf of the board I want to thank David for his contributions to our successes to date.”
Smales became CFO in 2007, shortly after the New York Third Avenue International Value hedge fund became the largest single shareholder of the corporation.
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