Both sides weigh in on whether special tax rate for Catalyst Paper's mill in Powell River, British Columbia, should be extended; mayor says tax break could help pay for upgrades needed to keep PM No. 9 operating

LOS ANGELES , June 13, 2014 () – The city council in Powell River, British Columbia, has to decide whether or not to extend a special tax rate for Catalyst Paper Corp., and recently heard both sides on the issue, reported the Powell River Peak on June 11.

Granting the tax break could help the company pay for upgrades needed to keep the mill’s PM No. 9 operating, said Powell River Mayor Dave Formosa, noting that the mill would have been closed if the city hadn’t taken the steps it had.

The city intends to “do everything in its power” to ensure that the Powell River mill doesn’t close, said Councilor Jim Palm, the Powell River Peak reported.

More than C$29 million in tax revenue will have been lost to the city between 2005 and 2015 as a result of Catalyst’s special tax rate in Powell River, said Murray Dobbin, a resident who opposes tax concessions for the mill.

He said that everyone else is paying for the “special treatment” of Catalyst Paper. The special tax rate for the company was established in 2005, reported the Powell River Peak.

The mill’s PM No. 9 requires a $4 million electrical upgrade, said Formosa, who doesn’t believe Catalyst Paper has the money. If the mill closes, it would be “devastating,” he said, noting that it would mean a tax hit of 26%-27%.

Catalyst Paper’s expenses have gone up due to three actions by the province, including the reintroduction of the provincial sales tax, which has added about $12 million a year to the company’s costs, said retired mill worker Hans Brennert.

In addition, a new provincial recycling program is adding to the cost of doing business, and sharp increases in BC Hydro's rates are expected to continue for at least four more years, he said, the Powell River Peak reported.

The primary source of this article is the Powell River Peak, Powell River, British Columbia, on June 11, 2014. Click here to view full version of primary source's original article.

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