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Province considering financial help to solve corporate tax revolt

The provincial government has agreed to consider providing money to resolve disputes over industrial tax rates, Union of B.C. Municipalities president Robert Hobson said today.

Hobson told a UBCM conference session in Whistler that he received a letter yesterday from finance minister Colin Hansen saying the province will consider making the money available in its 2011 budget. “I would take that as not being a 'yes', but not being a 'no.'”

Industrial tax rates became a hot issue a little over a year ago, when during the recession major industrial property owners refused to pay their municipal taxes. They included Celgar Pulp Mill in Castlegar and Catalyst Paper in Powell River, Campbell River, North Cowichan and Port Alberni.

There were worries among UBCM members that the provincial government would respond to the industrial tax revolt by capping the level of property taxes that can be charged to industrial property owners.

Hobson said the province has so far resisted imposing caps and is entertaining the UBCM's proposal to provide between $17 and $42 million a year to fund any tax reductions for industry and to make up any lost municipal revenue.

“Our members were very nervous a year ago about what might be imposed on us,” he said. While some of the pressure has been reduced as Catalyst has reached agreements with local governments, it remains a concern when municipalities are dependent on one or two large taxpayers, he said. “We consider this to be a work in progress.”

“We're not asking for much,” said Port Alberni mayor Ken McRae. “You say $25 million. That's peanuts compared to what we put in . . . We're not here for a handout. We're just here for our fair share.”

North Cowichan councilor Al Siebring said Catalyst is still seeking to appeal its taxes in his community to the Supreme Court of Canada. “It's still very much out there and this issue's not going away.”

And Kitimat councilor Rob Goffinet, said local governments will have to raise money elsewhere if they can't tax industries as they see fit. “We're fearful this is a strategy of shifting of tax burden off of corporations and onto municipalities,” he said.

The provincial government has been reluctant to even analyze whether or not municipal taxation is a problem for corporations, said Alberni-Pacific Rim MLA Scott Fraser. Nor do many local representatives feel their concerns have been heard, he said. "You could see there was some anger in the room from representatives of affected communities."

He also pointed out that capping taxes from industrial property owners will likely mean tax hikes for small businesses and residential property owners, neither of which have been represented on the task forces investigating the issue.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.

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