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Catalyst loses another tax challenge

Catalyst Paper’s latest bid for a tax reduction has been rejected by the B.C. Supreme Court.

Catalyst Paper’s latest bid for a tax reduction has been rejected by the B.C. Supreme Court.

The company, which owns the closed Elk Falls mill, has paid all its taxes to the city – $4.8 million – but was looking for a break on its regional tax levy for the following services: 911 emergency line, pool and recreation, and the library.

“This petition concerns the arcane world of taxation for municipal services,” wrote Madam Justice B.J. Brown, in a decision handed down Friday in Vancouver. “I describe this area as arcane because there are several inter-related pieces of legislation which apply to property taxation. This complicated approach to provision of services and recovery of costs has spawned many cases in our court.”

In recent years, Catalyst has actively filed challenges in B.C. Supreme Court over the millions in taxes it pays annually to Campbell River, Powell River, Port Alberni and North Cowichan (Crofton) where the company’s mills are located.

The company lost its 2009 bid to have property taxes reduced in Campbell River, but successfully had the tax rate set aside for the regional district services. The city collects these taxes on behalf of the Strathcona Regional District and had to recalculate the rate based on the court’s decision.

However, when Catalyst received its 2010 tax bill, the rate it was paying for the regional services was 2.5 times more that what the company believed it should be paying.

“Catalyst raises several distinct legal issues,” wrote B.C. Supreme Court Justice Peter Voith in 2009, in the first judgement related to the regional tax levy. “Principally, however, it asserts that the rates of taxation imposed by the bylaw on major industry property owners is unreasonable.”

In 2010, the city levied $518,917 in taxes on Catalyst for the regional services, but the company was hoping to pay just a little over $200,000. As a result, the case was heard last July in a Vancouver courtroom.

On Friday, Justice Brown handed down her decision, upholding the tax rate for the regional services in Campbell River. Her decisions on the same issue are still pending for Powell River, Port Alberni and North Cowichan.

“In conclusion, the city used the appropriate rates for library services,” she wrote, as well as upholding the rates for other services.

If the judgement had gone in Catalyst’s favour, the company would have received a refund from the city.

Catalyst spokesperson Lyn Brown wasn’t available for comment at press time.

The company is still trying to reduce its municipal taxes in Campbell River and has applied for a “closure allowance” to the B.C. Assessment Authority.

Last July, Catalyst permanently closed operations at the Elk Falls mill.