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LETTER – Who’s looking out for taxpayers when Domtar taxes are cut?

(Image: Mel Rothenburger)

On Jan. 14 Kamloops City council approved a reduction to the heavy industry tax rate.
The main beneficiary of this tax reduction will be Domtar, who have been doggedly pursuing this for several years.

In a December presentation to City council, Domtar provided an overview of their production rates. They produce 410,000 tonnes annual pulp production and 460,000 MWh annual green power production.

Using conservative figures this converts to gross revenue of $512 million for pulp and $46 million sales for power to the Hydro grid — for a total of $558 million annual gross revenue.

Property taxes paid to Kamloops in 2019 were $4.9 million. As a percentage of gross revenue this equates to a tax rate of less than one per cent. As an added bonus Canadian pulp producers sell their product in American dollars, operate their mills in Canadian dollars, which currently equals a 25 per cent differential.

Small business and home owners could only wish their tax rate was that low. Since 2007 home owner property taxes have increased by 51 per cent or $745, with future increases slated to come on the backs of residential and small business owners.

What commitment did the City get from Domtar in exchange for tax relief in terms of investments and employment numbers? It wasn’t that long ago that Domtar shut down a mill at a cost of 100 jobs and today runs the mill at double digit overtime rates and unfilled positions in some lines of progression.

We certainly hope that less tax paid to the City doesn’t mean fewer obligations to the community.

While Domtar has the ear of the City on heavy industry taxes, who in the City is looking after affordability for residential rate payers?

GARY WORTH
Kamloops

About Mel Rothenburger (7717 Articles)
ArmchairMayor.ca 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 ArmchairMayor.ca 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.

3 Comments on LETTER – Who’s looking out for taxpayers when Domtar taxes are cut?

  1. another consideration to think about is when all those heavily loaded chip trucks and log trucks drive on city roads the damage they cause is also paid for by the tax payer.

  2. Did council barter some added benefits to the community in lieu of the tax break? Do we know? Or, despite having 11 full time people working in the communication department, they are as opaque as ever on matters of importance?

  3. Bill Hadgkiss // January 29, 2020 at 2:22 PM // Reply

    If your numbers are correct this is a very sad comment on how foreign corporations, (this one, from Fort Mill, South Carolina), have been allowed to run our governments.

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