Celgar defends decision not to pay taxes
By Kyra Hoggan
Celgar executives told The Source today they had “no other option” than to take their municipal taxation issue to court, contending there was simply no other way to get City of Castlegar representatives to listen to their concerns.
Al Hitzroth, general manager of Celgar’s Castlegar mill, said in the almost three years he’s been at the helm of the operation, he has met with city council on four occasions.
“Three times at the mill, I did a formal presentation for them, and once I presented at a council meeting,” he said. “As late as December 2008, I asked for a tax cut of 50 per cent.
“I’ve received nothing, not a single scrap of paper, from city hall even saying, ‘thank you for the presentation, we heard you’,” he added. “I sent them a letter after the budget (was announced) and expressed my dismay (at the tax rates). I never did get a response … so we just left it at that.”
He said recent news reports were the first he had heard of the city’s intention of reducing Celgar’s taxes to 40 per cent over five years, and while that plan may have been made public through the budget process, it would have been helpful if Celgar had been informed.
“I don’t always get the newspaper – and that’s no way to communicate, through the media,” he said, adding there was a backlash when he tried communicating with the city through the media late last year, demanding a 50 per cent tax cut.
“They still just don’t get the urgency of doing something for a dying industry in our country,” Hitzroth said. “We don’t want to create a battlefield, that’s not the intention … but everyone, all the stakeholders, need to be engaged and understand this needs to change or this mill will be another casualty.”
As for meeting with the city now, he said he, “has no intention” of setting up such a meeting, but if the city approached him, he’d consent to a sit-down. “I’m open to getting together with them to hear what else can be done.”
Under the current circumstances, though, he said he sees little point, as he has met with council before and, “they just weren’t getting the message.”
Furthermore, he added, the kind of concessions he has been looking for have been offered by the city … to someone else.
“The hydro-electric facility (Brilliant Dam) already has a concession on their taxes (to the tune of millions of dollars), but they fall under the same category of major industry (as we do). Why are they treated differently than us?”
In fairness, Hitzroth said, larger issue prevail, like a fluctuating and inconsistent Canadian dollar, a flagging global economy and rock-bottom pulp prices.
“People have said this (not paying taxes) isn’t going to save the mill, and they’re right,” he said. “But it’s part of it.”
Finally, Hitzroth said the reason Celgar hasn’t paid even a portion of the tax bill (unlike Catalyst Paper and Timberland, the other two companies filing suit in B.C. over tax rates), is as follows:
“The approach Catalyst took was to bring in a consultant to assess the level of services provided (by the municipalities in question),” he said. “For us that’s zero – we don’t see ourselves as getting any municipal services, so we chose not to take that route. It’s in the court’s hands, and they’ll decide what’s a fair level of taxation.”
In fact sheet generated by Celgar and released by Hitzroth to The Source, further contentions include that, “Celgar is being asked to pay for approximately 40 per cent of the city’s cumulative tax budget, while Celgar’s property value is less than nine per cent of the total property value within the city.”
Other key excerpts from the fact sheet indicate that, “In recent years, the city has announced that it has reduced Celgar’s tax burden by $300,000 per year. This is simply not true. At the time that Celgar was purchased by its current owner, the mill for many years had been paying its taxes in December of each year, incurring a provincially-legislated penalty of approximately $300,000.
“In 2006, Celgar determined to pay taxes in June and thus the penalty charge was eliminated. The city then informed the community in its annual report that it had been working with major industry by providing this rate class a $300,000 tax break.”
Obviously, city representatives did not concur with this assessment of the situation (see The Source, July 9, Mayor says Celgar meeting not top priority).
The fact sheet went on:
“Celgar and other industry ratepayers get no say in setting taxation rates as industry does not vote on the election of city council. Nonetheless, we have made continuous attempts to address the problem with the city. To date these request have fallen on deaf ears, as the city pushed forward with virtually debt-free, large costly infrastructure projects such as the new city hall and police station. We are gratified by their recent comment that they are prepared to work constructively with us. We remain willing to work constructively with the city even though prior attempts on our part to do so have been unsuccessful.”
No meeting has yet been scheduled for the two organizations to discuss the issue.
