If TimberWest wins its tax challenge against the city, Campbell River homeowners could see another tax increase.
Council approved a 2.92 per cent residential tax increase in January, which equates to an extra $41 for the average assessed home at $256,600, but that could change.
It all depends on whether TimberWest is successful in its B.C. Supreme Court challenge against the city raising taxes on managed forest lands.
Dennis Brodie, the city’s finance operations supervisor, said if TimberWest wins, those extra taxes will have to be made up by residents.
“In the event that this increase was removed from Class 7 (managed forest lands) and shifted to the residential class it would result in an approximate $2 increase to the average house, bringing the overall residential tax increase to 3.07 per cent or $43,” Brodie wrote in a report to city council.
In January, council increased managed forest land taxes to $2.29 per thousand dollars of assessed value to the provincial average of $13.98, a total tax increase to Class 7 of $27,468 to be phased in over three years.
City staff have prepared tax rates bylaw for 2014 already and council was expected to pass the bylaw, which includes the managed forest lands increase, at its Tuesday council meeting after the Mirror went to press.
City Manager Andy Laidlaw appealed to TimberWest in March to reconsider its tax challenge, saying it would hurt Campbell River taxpayers if the forest products company went through with its petition.
“If they pursue this in the courts the city will end up paying legal fees, funded by taxpayers, just to set a taxation rate that is in line with other B.C. communities,” Laidlaw said. “It is unfortunate that TimberWest, as a corporate taxpayer, has taken this action against council policy, which aims to set an equitable tax rate for managed forest lands, phased in over three years.”
Terry Francis, operations manager with TimberWest, said the company believes the city is in the wrong and is legally restricted from setting the tax rate for managed forest lands higher than the rate that logging company Merrill and Ring is charged for its managed forest lands.
Al Kenning, a financial consultant who has been working for the city, said the rate for Merrill and Ring lands is set by a provincial order that specifically only applies to that company and does not apply to TimberWest.
If TimberWest is successful in its challenge, it will be for the second time.
In 2009 TimberWest took the city to court and Madam Justice Gerow ruled that $1.21 million was unlawfully levied by the city on TimberWest.