Celgar saga continues at UBCM

Kyra Hoggan
By Kyra Hoggan
September 23rd, 2009

The City of Castlegar and the City of Burnaby are submitting late resolutions to be debated at the Union of B.C. Municipalities (UBCM) annual convention next week, in an attempt to deal with the fall-out of major industries refusing to pay their municipal tax bills.

Castlegar is facing this problem with its single largest ratepayer, Celgar (representing more than 40 per cent of the city’s annual budget), filing suit against the city in lieu of paying $3.6-million in taxes this summer.

Burnaby’s resolution is in response to a similar situation involving Catalyst Paper and four B.C. municipalities, namely Port Cowichan, Port Alberni, Campbell River and Powell River. Catalyst is withholding $13.2 million of a $19.2-million municipal tax bill.

Castlegar city council, at its regular meeting Monday night, heard that Burnaby Mayor Derrick Corrigan has contacted Bill Bennett, Minister of Rural and Community Development, to request provincial support for the four communities in their legal battle against Catalyst, while Burnaby city council has drafted a resolution in the hope of securing UBCM support for same.

The resolution urges, “all local governments within (B.C.) to strongly condemn Catalyst Paper’s actions,” and “to assist the four communities in their legal action.”

It further argues that, “non-payment of property taxes is not only illegal, it inhibits a city’s ability to deliver its mandated services such as fire protection, law enforcement, roads, sewer, water, parks and recreation”.

At Monday night’s meeting, councillor Kirk Duff suggested it would be in Castlegar’s interests to contact Burnaby and share information regarding the Catalyst/Celgar circumstances, and mayor Lawrence Chernoff agreed to do so.

Furthermore, while presenting the mayor’s report, Chernoff proposed a resolution to come from Castlegar – and council voted unanimously to forward the resolution to the UBCM.
This resolution addresses an implication unique to the Castlegar/Celgar scenario – while Catalyst Paper paid the portion of its taxes due other jurisdictions like regional districts, Celgar did not, creating contention between the city and the Regional District of Central Kootenay (RDCK).

The city at first declined to the pay Celgar’s portion of the regional requisition (roughly $375,000) to the RDCK, arguing that, since the bill was unpaid, there was no money to remit.

The RDCK took exception to that position, contending that the money was owed by the city, regardless who had (or had not) paid taxes, for services jointly offered by the city and the RDCK.

The city ultimately paid the bill, but the new UBCM resolution was drafted to protect municipalities in the event of a similar situation.

The resolution argues that, because a major industry taxpayer could represent 25 per cent or more of a municipality’s annual budget, “the forced payment …may place the municipality in debt and at risk of insolvency”.

The resolution concludes that, “The (city) requests that the province … amend the (Local Government Act) so that municipalities are not obligated for the payment of Major Industry external requisitions if the municipality has not received the tax from the Major Industry.”

Chernoff said the merit of such a resolution, should it be passed by the UBCM, is that it underlines the issue as one of province-wide concern, adding the weight of all B .C. local governments in the political pressure brought to bear in persuading the provincial government to take action.

The UBCM convention begins this Monday.

In related news, Chernoff said talks between the city and Celgar continue, and should be aided by a B.C. Supreme Court decision on the Catalyst cases, which he said is expected to come within the next couple of weeks.

No court date has yet been set to hear Celgar’s suit.

Categories: General