Lightening heavy industry’s tax load in Kamloops

Domtar and Tolko’s tax rate will decrease slightly this year, at a cost of about $4 to the average household

Domtar and Tolko’s tax rate will decrease slightly this year, at a cost of about $4 to the average household.

But heavy industry in Kamloops will continue to pay more on average than other B.C. municipalities.

article continues below

City council on Tuesday approved this year’s mill rates.

Residents will pay $4.98 per $1,000 of assessed value of their homes, generating an expected revenue of $71.3 million, which is 64 per cent of the total tax revenue. Businesses will pay $13.57 per $1,000 of assessed value, worth $26.7 million and 26 per cent of the tax revenue, while heavy industry will pay $71.81 per $1,000 of assessed value, worth $5.5 million, or five per cent of tax revenue.

The city needs to collect $111.8 million of taxes, which is about a three per cent increase over what it collected last year.

One city councillor took issue with a reduction of the heavy industry rate, which is charged to the Domtar pulp mill and Tolko’s plywood mill.

Last year, heavy industry paid $73.34 per $1,000 of assessed value.

The reduction is a result of a council policy implemented in recent years to incrementally lower the rate, due to high taxes paid in Kamloops by heavy industry compared to other communities in the province.

“If they’re [Domtar] trying to decide, do I spend $10 million to upgrade my environmental controls? Do I do it in Kamloops or do I do it somewhere else?” city corporate services director Kathy Humphrey told KTW. “That’s the decisions that they were facing. That’s why the policy came into play, to show a commitment that any investment in their mill wouldn’t also increase their taxes.”

Coun. Denis Walsh argued the policy was inherited from the previous council, upon which he sat, and should be reviewed.

“I think we need to look into this and see because it has serious ramifications for residential taxes,” Walsh said.

Humphrey said the amount shifted to residents this year is $286,000. The reason for shifting to residents as opposed to businesses, non-profits or farms, is because a small increase has more of an impact on the latter three classes.

For example, one penny per $1,000 of assessed residential property values results in the city netting $143,200. Businesses, non-profits and farms would have to pay much more to get the same result.

Humphrey said the result this year is about 1.5 cents added to the mill rate, or about $4 for the average household.

Since 2015, a total of $1.9 million has been shifted from heavy industry to residents.

Meanwhile, the average heavy industry rate among a dozen comparative communities in the province in 2018 was $23.36 per $1,000 of assessed value.

Based on this year’s assessed values, if council were to reduce rates for Tolko and Domtar to meet that average, the city would lose $3.5 million worth of tax revenue in 2019.

Mayor Ken Christian cautioned Walsh, noting the freeze allows Domtar to go to its board of directors and request investment in its pulp mill on Mission Flats Road.

He noted heavy industry is generating $5.5 million in tax revenue for the city this year, with Domtar the single-largest taxpayer.

“I don’t think we should characterize this as giving a break to heavy industry,” Christian said.

Council voted 8-1 in favour of the mill rates, with Walsh opposed.

Coun. Mike O’Reilly made a motion to have the city’s heavy industry rate policy reviewed at the finance committee level.

His motion also included a review of tax exemptions in North Kamloops and downtown and was supported by council.

Adoption of the mill rate, along with last month’s budget being finalized, means a tax hike for owners of average-assessed properties — which is $403,000 — of $66 on their annual bill.

© Kamloops This Week

 


KTW Daily News Alerts
KAMLOOPS WEATHER

Question of the Week POLL

The B.C. Lions just started training camp in Kamloops. How will the Leos fare in the 2019 CFL season?

or  view results

Popular Kamloops This Week

Events Calendar