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October 21, 2016 - 8:00 PM
KAMLOOPS - The closure of the Lafarge cement plant won’t impact the City’s budget this year — but that could soon change.
Lafarge announced this week it will keep a skeleton crew at the plant while it essentially shuts down due to ‘market conditions.’ So long as the operation exists, it will continue to pay the premium major industry tax rates, one of the highest for the city.
If conditions don’t improve and the plant officially closes, that could leave a roughly $550,000 hole in the city’s budget, meaning residential and other taxpayers may have to make up the shortfall.
This year, Lafarge paid $538,000 in taxes. Roughly the same amount is due next year and every year unless the plant closes.
“The fact the plant is closed doesn’t affect the city’s finances,” city financial director Kathy Humphrey says. “Property taxes are based on ownership.”
The plant would have to be sold or the land use altered to trigger the loss or change in taxes.
The company has so far been unspecific about its plans. In an email, spokesperson Jennifer Lewis stopped short of saying it's a permanent closure. She also indicated the city’s major industry tax rate was a factor.
"The industrial tax rate in Kamloops is higher than our Exshaw, Alta. and Richmond, B.C. cement plants which impacts our costs, particularly when we are not operating at full utilization,” she said.
Only three companies are in the major industry tax level and this is far from the first complaint. The rate had been frozen since 2013 but this year the city dropped it by nearly six per cent in response to a plea from those companies.
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