In the midst of the global recession, which has severely affected the British Columbia economy generally and the economies of resource communities in particular, several communities across British Columbia are facing an unprecedented tax revolt by major industry.
In Campbell River, North Cowichan, Port Alberni and Powell River proceedings have been commenced in British Columbia Supreme Court by Catalyst Paper Corporation seeking to set aside the Tax Rates Bylaw in each of those communities, and, pending the decision by the Court, Catalyst has only paid a portion of its municipal taxes.
Similar Court proceedings have also been commenced by West Fraser Mills in Kitimat and Celgar in Castlegar. TimberWest Forest Corp., is also challenging the Campbell River Tax Rates Bylaw and Five Year Financial Plan as a result of the taxes on its Managed Forest Land properties.
In British Columbia resource based communities have historically utilized their major industrial tax base as a source of revenue to build the infrastructure and to provide the services necessary to build and maintain a viable community that will attract and retain residents, including those employed by major industry.
The argument put forward by Catalyst in its various Court proceedings is its belief that the share of taxes paid by major industry should have a direct relationship to the amount of services consumed or used by major industry. In effect, it amounts to an argument that the current system of taxation on the assessed value of land and improvements should be changed to a taxation system based on a user pay or fee for services model only.
Hopefully, the Court will rule that the argument put forward by Catalyst and supported by West Fraser and Celgar in their actions is one that is a purely political question for the elected officials in each community to decide, rather than a legal issue for the Judges in the Courts of British Columbia to determine.
The appropriate level of taxation on major industry is a legislative and tax policy issue for the elected officials on the Councils of each of the affected resource based communities to determine in their political discretion. They are the ones who know best what the needs of their communities are; what they can afford; and how to balance the competing interests within their communities. On these types of legislative issues where elected officials have a wide discretion, the Court should not interfere or substitute its decision for that of Council.
An update on the outcome of these cases will be provided in the next issue of LoGo.