REPORTING · 14th December 2010
It was a shocker of a headline to be sure and like most headlines, ours included, they are designed to get your attention and encourage you to read on. But this one had Terrace City Councillor Bruce Bidgood fuming at his fellow Councillors. It was true, the Councillors met and discussed providing a tax break for the class ‘Heavy Industrial’ and they did make a recommendation yet it was not approved. Further, contrary to what was reported, the reduction was not a percentage but a specific dollar amount. Bidgood, however, was more incensed the discussion even took place as he had previously expressed his serious concerns and opposition on this potential industrial tax rate reduction.
“I’m opposed to the proposed heavy industrial tax rate. I voiced my objection to this in the first budget meeting,” stated Bidgood as he addressed the motion to pass the recommendations of the Committee of the Whole at Terrace City Council Monday, “This was a pre-emptive motion which I could not have anticipated.” Bidgood continued after he explained his absence from these discussions. “It seemed to be reported there was a united position on this issue […] there clearly is not.”
Bidgood spoke of various reports on how inconsequential the tax rates are to industry as they generally account for less than one percent of the overall budgets. He referred to various conversations he had with the City’s Chief Administrative Officer, the Chief Financial Officer, TEDA and others. None could provide any evidence to support the need for a reduction in the industrial tax rate; no potential investor had apparently ever mentioned this as a concern.
“The proposed tax reduction will leave the homeowners and businesses of this community having to make up the shortfall and it seems to me to be unfair to have homeowners subsidize the profits of owners of heavy industry.”
As he was concluding his statements and proposing an alternative to the recommendation, Councillor Brian Downie interrupted and called for a point of order, suggesting the entire discussion was out of order. A minor debate ensued back and forth until Bidgood was allowed to make a new motion to remove the recommendation to change the industrial tax rates.
The foundation behind the discussions and debate were clear. Terrace only has one heavy industrial tax payer, West Fraser with their Skeena Sawmill property. Downie, who was formerly the District Manager for the Kalum Forest District, seemed to be arguing in favour of this tax reduction for West Fraser. CAO Ron Poole corrected the misinformation stating, “The press put it down as 20 percent, it’s actually not 20 percent it’s a dollar value, so we didn’t deal with tax rates at that meeting we actually put in a figure.” Bidgood referred to it as a $20,000 Christmas gift to West Fraser.
The recommendation was an increase in the dollar value reduction to the taxes payable by West Fraser of $20,000 for each of the next three years; $20,000 this year, $40,000 next and $60,000 in year three.
“I had proposed an alternative at that point in time,” stated Bidgood referring to the previous meeting he was able to attend when they were discussing the budget changes, “that we not change the taxation rate for all heavy industry but for new heavy industry coming into town. That would save the City of Terrace, the home owners, having to pay the $20,000.”
Councillor Carol Leclerc questioned the Chief Financial Officer on various aspects of the impacts of these changes to the budgets and the limits to the reductions for West Fraser however their was no response. Councillor Martindale stated he wished Bidgood could have been present for the discussions as they were detailed and in depth calling the increases to Heavy Industrial taxes “Ungodly” in the early 2000’s.
In the end all Councillors except Leclerc, who voted against Bidgoods amendment, chose to support the decision to leave this matter for the budget discussions in the New Year.
Bidgood expressed concerns his fellow Councillors had even entertained this debate without his presence as he had spoken passionately about the issue previously. "This was not something that couldn't have waited until I returned," he explained.
Video of this part of the Terrace City Council meeting attached below.
Right on Karen.
Comment by Helmut Giesbrecht on 15th December 2010
I would also be a bit careful with the notion of reducing taxes to industry which wants to set up shop in Terrace in order to encourage them. Property Taxes are tax deductible and are a part of operating costs. You may be sending more to the CRA while you make a reduction in property taxes.
Also one needs to ask what if another community offers a better deal and on and on it goes. What is so good about communities competing against one another on who can give a bigger and better tax break? If we let industry play that game then the bigger municipalities will win hands down. Eventually heavy industry will be property tax free because we need the jobs.
If it is a temporary situation, say a three year reduction, to attract the industry there maybe a point to it but remember that it all comes from the pockets of the other properties. That may require a fuller discussion with the community which will consider the benefits.
IN any event giving a break to West Fraser when they are leaving should be an indication that mental competence needs to be verified.
I agree with Bruce
Comment by Karen Dedosenco on 15th December 2010
What heavy industry is going to get the tax breaks? West Fraser, whom we know are not coming back and who invested $33 million of Black Liquor Taxes in the U.S.? Tsimpshian Resources who are exporting raw logs and thus only creating a small percentage of jobs that the resource is capable of? Not Timber Baron who only lease part of the old mill site and are also exporting all their product. Then maybe the owners of that site who have yet to bring any industry to town?
If our city counsellors have fallen into Campbell's delusional mindset that lowering taxes for heavy industry will have them swarming in you are likely to end up like Campbell.
Offer the breaks to industries that are willing to set up shop in Terrace, as an incentive. Not to the owners of heavy industrial lands that are doing nothing for our city.