KAMLOOPS - The City of Kamloops is doing more to relieve the tax burden on heavy industry, but not all on council are happy about it.
While the new efforts will not have a significant impact on residential taxes this year, they may encourage companies like Domtar to invest more in local mills, according to supporters of the policy. A group of measures passed at a council budget meeting this morning, March 13, is in an effort to lower the City’s heavy industry tax burden gradually.
The measures include a cap on the dollar figure collected from heavy industry in Kamloops at $6.2 million and a cap on the mill rate so it doesn’t go higher than the current rate of 74.00. Kamloops currently has the highest heavy industry tax rate by far when compared to communities of a similar size.
More controversial to councillors was the use of any increases in the utilities tax rate to lower the heavy industry rate.
This means taxes on the new Kinder Morgan pipeline expansion running through the city will go towards lowering taxes for Tolko and Domtar instead being spread evenly across all tax classes. City administration pointed out that because of the size of the residential tax class in Kamloops, individual homeowners aren't likely to notice a significant difference in their taxes when the estimated $1.3 million from Kinder Morgan or $181,000 the new policy will shift from the heavy industry class happens.
Financial director Kathy Humphrey told council this year the new policy would likely raise residential taxes by only a couple of cents this year.
Lowering the tax burden on heavy industry has long been something lobbied for by those businesses. For the past few years the rate has been frozen, and even lowered a little last year. With the new policy in place the city is aiming to decrease the rate so it’s more in line with the average of 12 B.C. municipalities of comparable size or makeup, ranging from Victoria to Delta.
The heavy industry tax class are unique in some ways as property assessments often decreases over time. Additionally, assessments increase when new equipment and machinery are added to the site, which means improving a mill’s energy efficiency or other updates increase the taxes paid.
Councillors in favour of the motion pointed out with the caps in place, Domtar and others are more likely to update local sites, making them more efficient, environmentally-friendly and likely to remain in Kamloops. Coun. Donovan Cavers argued there’s no certainty any improvements will come to Kamloops from heavy industry businesses just because the tax rate is lowered and this will shift more of the burden to residents ofver the long term.
“We don’t know this will be reinvested in the plant,” he said. “Until we have a commitment I don’t think we should support this.”
Coun. Tina Lange, who supported the motion, doesn’t like the idea of heavy industry in Kamloops, but saw this as a palatable way to move forward.
“Major industry probably shouldn’t locate in Kamloops because of our unique geography,” she said.
The vote on the final motion to support the plan was six to two.
The high heavy industry tax rate was an issue for Lafarge when the company decided to close down their Kamloops location last year, though they currently still pay taxes on the property.
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