The argument for taking New Afton into city

MONDAY MORNING EDITORIAL — A reader raised a good point on the weekend about the City’s application to extend its boundaries to take in the New Afton mine.

NewGold copyQuestion being, is it just a tax grab without offering anything in return?

If you’re a resident of Kamloops, the issue might seem moot since, if the addition of a major industry helps reduce your taxes what does it matter? Except that the mayor has given a pretty clear signal that new tax revenues from New Afton wouldn’t go towards cutting residential property taxes — rather, they would be used to spread the pain a little more thinly among heavy industry.

Major industries in Kamloops formed a lobbying coalition several years ago and annually press City council to lower their share of the taxes. As reported in Sunday’s Armchair Mayor News, their case will be up for discussion at the council table again this week.

The obvious way to reduce taxes in one tax category is to raise them in another. That’s always been a tough nut to crack for civic politicians, since industry is influential and persuasive but homeowners carry the weight of the votes come election time.

The Milobar Doctrine would go at least a short distance to lessening the burden on incumbent industries by bringing in New Afton. But what does New Gold get out of its New Afton operation being taken in by the City?

There will be no City services extended to New Afton — the mayor has made that pretty clear.

The justification, whether or not you think it’s a strong one, is that New Afton’s employees by and large live in Kamloops, use City services such as water and sewer and recreation, drive on City roads and use City parks. Therefore, the logic goes, the City is justified in wanting taxes from the mine.

It’s the same argument that was used several years ago when the Cache Creek mega dump was being expanded and some other parts of the regional district felt royalty revenues should be shared region wide. No, said Cache Creek and Ashcroft, we’re the ones who have to provide the services to those who work there.

In the end, the argument is as much a philosophical one as it is an accounting exercise. The TNRD has yet to weigh into this one but when it does we can expect the rationale of indirect provision of services to be raised.

About Mel Rothenburger (6810 Articles) is a forum about Kamloops and the world. It has more than one million views. Mel Rothenburger is the former Editor of The Daily News in Kamloops, B.C. (retiring in 2012), and past mayor of Kamloops (1999-2005). At he is the publisher, editor, news editor, city editor, reporter, webmaster, and just about anything else you can think of. He is grateful for the contributions of several local columnists. This blog doesn't require a subscription but gratefully accepts donations to help defray costs.

8 Comments on The argument for taking New Afton into city

  1. Trish Keegan // April 9, 2014 at 12:04 PM // Reply

    Having one mine, New Gold, within the city limits, sets a precedent for allowing another. Appears that city officials support the Ajax mine in Kamloops.

  2. The city’s justification for extending the boundaries and taxing the mine is that New Afton’s employees by and large live in Kamloops, use City services such as water and sewer and recreation, drive on City roads and use City parks. Therefore, the logic goes, the City is justified in wanting taxes from the mine.
    Using this thread of logic, one could make the case that the city should in turn share this tax revenue with the grocery stores and other commercial services that the mine employees also use. Of course this is a ridiculous suggestion, the mine employees already pay for their groceries and other services. They go to the stores, select what they want and pay for it. The transaction is a complete and judged by both parties to be fair enough. What is so different about property taxes that their is an argument for one party subsidizing another?
    As individual and corporate citizens we have a social responsibilities, paid for by our taxes, but our social obligations are tended to by our federal and provincial governments. Municipal governments do not manage social services. The municipal governments are charged with the responsibility of providing user pay services: sewer,water, roads, garbage, recycling and recreational services, etc. If municipal tax payers feel that taxes are seriously too high,this indicates a problem within the city’s management. To extend the city’s boundaries in an effort at a tax grab is merely denial and an attempt to cover the problem up.
    Full disclosure: I do not work for or have any interest in any corporation or mine. My interest in this issue is purely one of logic, and efficient operation of government.

  3. Using Milobars reasoning, then Kamloops should take over Highland Valley too, after all, a lot of people from Kamloops work there also. Milobars plan sounds pretty weak to me, as the mine will want something in return for the taxes paid.

  4. What a feeble argument for expropriation. Maybe the city should expand its borders to Highland Valley, or up to Ft McMurray by that logic… Pretty sure those same workers already pay property taxes.

  5. Lyman Duff // April 7, 2014 at 3:29 PM // Reply

    There are economic benefits for New Gold to be this close to a major center like Kamloops. A remote mine has to build more infrastructure to operate, to house employees for example. Also, it would have to incur higher costs for supplies and various other logistics. Tax them. Reasonably yes, but tax them!

    • The benefits between the city and New Gold are mutual. Would the city be better off or worse off with out New Gold? Less employment means less taxes for the city. It still comes down to municipal taxes being a fee for services.

      • Lyman Duff // April 8, 2014 at 2:51 PM //

        If we use your reasoning then every industry can say: well we are providing employment therefore we don’t want to pay any taxes. Oh, but wait, they are using that argument already and winning it.
        Corporate taxes have been negotiated to a low level already both federally and provincially. Then the federal and provincial governments turn around and tell the municipalities that there is no money for projects. I think all of you on this blog tread should do the right thing and double your contribution to the municipal coffers. You know, putting your “money” where your mouth is type of an argument.

  6. I know how I’d feel if I lived outside city limits and therefore received nothing tangible from the city’s services, with the benefit of no city taxes.

    If I got a letter in the mail saying they’re expanding city boundaries with the express purpose to get money from me so that their citizens will now need to pay less taxes, I’d feel like I was getting robbed. (In fact, wouldn’t I be?)

    The fact that it’s a big industry representing big dollars, having the sweet allure of easy money, doesn’t make what the mayor is considering any more just.

    I don’t like seeing anybody being robbed, big or small.

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