Vernon Mayor Wayne Lippert is expecting a visit next week from a Tolko Industries representative to talk about the local mill's taxes.
He's worried that Tolko might say the municipality is charging too much. Six other B.C. towns are embroiled in court cases with forest-industry companies that have refused to pay their taxes, while unknown numbers of others are having ongoing debates on the issue.
"The concern is about other industries following the same lead we see happening," said Mr. Lippert.
Mr. Lippert was one of about 300 B.C. council members who came to one of the most popular sessions at the Union of B.C. Municipalities' annual convention yesterday - on what to do about the tax revolt by industries around the province. It's a revolt that has thrown small resource towns for a loop as they lose revenues that can account for up to 40 per cent of their total budgets.
That fight isn't temporary or confined to a few towns, said experts on the panel.
"This issue, I don't think is going to go away," said former deputy minister Gerry Armstrong. "This is a story of simmering discontent in the business community."
Business Council of B.C. vice-president Jock Finlayson, also on the panel, said he believes the province will have to intercede at some point because the dispute over taxes isn't helping the province attract new industries.
The pulp and paper mills say they are being taxed unfairly, paying up to 25 times as much as a residential taxpayer does per $1,000 of value. The average ratio is somewhat more moderate, but still works out to a tax rate just over six times higher than the residential rate. Some companies have refused outright to pay, while others have withheld part of their payments.
The industries make arguments similar to those made by Vancouver businesses - that their taxes should be based on the services they use, not on their ability to pay.
Castlegar Mayor Lawrence Chernoff said he got visited by a representative of the Celgar mill two hours before the deadline for paying taxes and told that the mill wouldn't be paying its $2.5-million to the town or the other $700,000 it owed to the regional district.
Mr. Chernoff said he had no warning and the town had to scramble to cut spending, including dropping any untendered contracts for building projects. Now, as he and his council await the outcome of the court case between themselves and Celgar, they are wondering how resource towns are going to adapt to industries no longer accepting their tax rates.
Some say the solution is finding alternative sources of money for municipalities. Mr. Finlayson said the province will need to step in to help with the transition.
Others say that letting industries pay based on the services they use is a dangerous precedent.
Al Siebling, a councillor from North Cowichan, said that next they'll start to get residents saying they shouldn't have to pay the bill for police or fire because they haven't had a fire at their house or had to use police services.
"I call that tax anarchy."
So far six towns - Castlegar, Powell River, Port Alberni, North Cowichan, Kitimat, and Campbell River - are caught up in lawsuits with Catalyst Paper Corp.
