The cost of doing business

Kyra Hoggan
By Kyra Hoggan
July 15th, 2009

Ed. note: this column is half of a he-said/she-said exploration of the taxation contention between Celgar and the City of Castlegar. For a glimpse of the flip side of this particular coin, check out Always Right by Rob Leggett. And don’t forget to share your views and comments – your opinion is always welcome!

As everyone surely knows by now, Celgar has refused to pay its $3.6 million tax bill, and I’m not without sympathy for their position – certainly, it could be said that the city dropped the communication ball when it came to Celgar and its concerns, and the pulp industry is unquestionably under siege in the current flagging market.

Having said that, I find Celgar’s action, and their arguments defending it, to be a form of economic guerrilla warfare with the city’s well-being held hostage.

First off, let me take a moment to thank God that the rest of us don’t protest poor relationships by simply relinquishing responsibility to our communities and blithely refusing to pay debts we knowingly incurred, regardless the consequence to those around us.

Particularly so when the communication/relationship failure was two-sided: Celgar’s demand, made through the media last year, for a 50 per cent tax cut was patently unrealistic. Just arbitrarily cutting $1.4 million in revenue with no plan to replace it (other than, I suppose, transferring the burden to residents)? It just wasn’t a reasonable request, and it was made in a very angry, confrontational manner.

I’m thinking pots, kettles …

Then there’s Celgar’s vociferous attacks on city spending, specifically for capital projects like city hall, while failing to mention they’re planning their own co-generation-plant upgrade with a price tag in the ballpark of $4 million, with an overarching plan to spend $55 million on a green energy project.

Pots, kettles …

While we’re talking money, Celgar’s claims of abject poverty make sense, looking at market conditions … but lose some of their force when you go onto the Forbes profile website and find out that Mercer (Celgar parent company) CEO Jimmy Lee earned $658,089 last year, while CFO David Gandossi, who spoke so furiously to me about Castlegar’s gouging, received a total compensation package of $471,620. And they want to defer the tax burden onto Castlegar residents, and say they’re being treated unfairly compared to Castlegar residents?

And how about the contention that they don’t use city services like water, sewer, garbage? I don’t accept their argument that they cost the city and her residents nothing in terms of water, especially when said argument is made less than a year after Celgar accidentally spilled as much as 70,000 litres of caustic black liquor into the Columbia River due to an overflowed storage tank. (It’s worth noting here that Pulp and Paper Canada reported that Celgar has been cited, in years past, fully seven times for spills and effluent discharge exceeds. Into …wait for it … local water).

I also take exception to Celgar’s continued comparison of itself to residential taxpayers. There’s a tiny difference or two: most of us don’t use our homes as for-profit enterprises, for starters. Most local homeowners don’t have the option of just not paying their taxes and going to court – for all of Celgar’s cries of poverty, they can afford to sue the city, while most of us, I would argue, cannot.

The most offensive element of that comparison, though, is that I don’t like being snowed. The fact, and I’m betting Celgar knows this, too, is that residential homes are assessed differently than industrial properties.

Residences are assessed based on current market value – some Castlegar property assessments, in the residential category, went up by as much as 100 per cent or more in the past couple of years. Not so for Celgar – theirs actually includes an annual depreciation. The city tries to level that playing field by adjusting tax rates, so residents aren’t penalized for the differing assessment criteria. Celgar failed to mention that in their rhetoric, as well.

Finally, to put it simply, no homeowner in Castlegar has the power to hold the rest of us hostage by just refusing to pay. Yes, Celgar pays a very high percentage of the overall tax base – and with that disparity comes power – power they’re wielding, instead of negotiating first, to force the city’s hand into giving them what they want. And if it’s detrimental to the residents (many of whom are Celgar employees), what of it?

That’s not how you treat a neighbour.

Whether they like it or not, they are our neighbours; they are members of this community, they are corporate citizens.

Whether or not they’re good neighbours … well, you decide.


Categories: Op/Ed


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