Wednesday, July 15, 2009

Catalyst for a tax revolt

The forestry sector in British Columbia is in big trouble because of market conditions. Now struggling to survive, forestry companies have taken a stand against gouging municipal governments -- we have the beginnings of a property tax revolt here in B.C.

Catalyst Paper, a pulp and paper company with four mills in B.C. towns told the municipal councils in those towns it would not borrow to pay its property tax bills. Catalyst pays about 40% of the property tax bill in each of those municipalities, but only consumes about 6% of their services. It has agreed to pay $6 million of its $23 million property tax bill.

Timber West Forest and Celgar Pulp have both said they wouldn't pay their full bill either. All three companies are now in court over the issue

One-mill towns have long gouged their biggest employer, but those days are over. In fact, B.C.'s finance minister has confirmed that a mill in BC that pays $5 million dollars per year in property taxes would only pay $500,000 per year in the US.

These industries heavily subsidize the services to residential property owners, and while property owners might be enjoying the free ride, if the biggest employer in town closes down, the free ride is over.

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