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?