The city stands to gain an increase in property tax revenue after council Tuesday night supported a request from Quinsam Coal to add 140 hectares to the city boundary.
The property in question is owned by TimberWest but Quinsam Coal has signed a purchase agreement to buy the land.
If the province approves the boundary extension, the property will be taxed at the city’s industrial tax rate and is expected to generate roughly $6,600 per year in property tax revenue.
Ron Neufeld, the city’s general manager of operations, said Quinsam Coal has agreed to pay a more expensive, uncapped tax rate for its new property.
The corporation pays a capped rate on its existing lands. That rate was introduced in 2004 through Letters Patent by the province to keep tax rates down after it approved a boundary extension to incorporate the original Quinsam Coal property into the City of Campbell River.
“As part of this boundary extension, a tax rate limit was set for the property,” Neufeld said. “Since the Quinsam Coal property was brought into the municipality, the City of Campbell River has reduced its major industrial tax rates significantly. Still, there continues to be a substantial difference between the capped rates and uncapped rates faced by these taxpayers.”
Coun. Larry Samson questioned during Tuesday night’s council meeting whether there would be an opportunity for council to go back and revisit the Letters Patent and the subsequent capped rate applied in 2004.
“While they (Quinsam Coal) may not get all the services, such as sewer and water, the wear and tear on our roads, that we have provided fire protection up there at certain times – there is use of our city infrastructure and to see an artificially low cap like this, I find problematic,” Samson said. “I’m not sure if to go back now is the right answer but I think it’s something we should look at.”
Council in the end, however, did approve the boundary extension, with Quinsam Coal paying an uncapped tax rate of $42.52 per $1,000 on its newest property and a capped rate of $16.28 per $1,000 on its existing lands.
According to the city, Quinsam Coal has achieved all of the necessary mining and environmental permits for expanded mining operations for the new property, which is adjacent to the Quinsam Coal site currently within the city limits.
Quinsam Coal requested to have the property, which is currently under the jurisdiction of the Strathcona Regional District, moved into the city boundary in order to streamline operations and deal with only one local government – the City of Campbell River.
The city will now be required to refer the boundary extension proposal to the regional district to determine any impacts on existing services should the boundary extension be approved. The application will also go to First Nations. If the province approves the proposal, the city will launch an alternate approval process, which will allow the city to proceed with the boundary extension if no more than 10 per cent of voters sign an opposition form.