If Campbell River city council won’t cut proposed tax increases for TimberWest, the company may fight back with the chainsaw.
In a submission going before city council Wednesday, TimberWest is threatening the city with actions it might take if there are increases to the Managed Forest Lands the company owns in Campbell River.
“The proposed increased tax burden will likely discourage forestry and remove the financial incentive to carry out forest management activities,” said the TimberWest presentation.
“If implemented, a prudent timberland owner might be forced to harvest the operable timber without replanting and sell the land for non-forestry purposes to offset the tax burden.”
With 98 per cent of the total tax burden in Campbell River being carried by the residential class, one of council’s priorities has been to find alternative sources of revenue.
What a financial consultant found was that TimberWest — with vast holdings in Campbell River — was paying the second lowest tax rates on MFLs in the province.
The city’s phased in plan to bring that rate up to an average level would cost the company about $33,000 extra per previous year over the next three years.
As a comparison, Campbell River MFL assessment in 2013 was $12.6 million and with a rate of $2.289, the city realized $27,449 revenues. In Cumberland with an MFL assessment of $3.7 million and a rate of $11.83, that municipality got $43,725 in revenues. North Cowichan, at $2.2 million assessed value and a rate of $18.48, got $40,770.
It’s not the first time the city has tried to get more taxes out of TimberWest.
In 2010, Madame Justice Laura Gerow of the B.C. Supreme Court upheld TimberWest’s petition regarding the City of Campbell River’s to raise taxes from $75,000 to about $1.2 million on the company.
Then TimberWest Chief Executive Officer Paul McElligot was both pleased and concerned with the court case.
“While we are pleased with the outcome, it is unfortunate we had to resort to the courts in this case,” he said. “The ruling upholds the purpose of the Private Managed Forrest Land Act and supports opportunity for investment in forestry on Managed Forest Land.”
By the city’s figures, TimberWest had been paying roughly $75,000 in annual taxes on roughly 7,500 acres of Tax Class 7 — Managed Forest land within city boundaries -— which translates to about $10 per acre. City councillors, and many others in Campbell River, considered that land to be potential real estate development property, not simply forest land. Given that TimberWest only paid $27,000 in 2013, that $75,000 looks pretty good.
As such, council felt TimberWest should be taxed accordingly. In the words of Councillor Andy Adams at the time, TimberWest is “a development company holding property until the time is right to be able to cash in.”
The previous year TimberWest shut down and scrapped the Elk Falls sawmill at a cost of 257 jobs.
The loss of the mill dropped TimberWest’s taxes on the mill property from $328,000 to about $16,000.
In its presentation to council TimberWest said it employs 450 people directly 900 other indirectly.
As part of its corporate citizenship TimberWest also pointed out that 120,000 coho salmon released in the Oyster River in 2013 was thanks in part to them.
