Domtar hopes to open taxation dialogue with city

Domtar’s Dryden Pulp Operations.                       File photo by Chris Marchand

Domtar’s Dryden Pulp Operations. File photo by Chris Marchand

By Chris Marchand

With court proceedings wrapped up between the two parties, Domtar Dryden officials hope to establish a dialogue with the City of Dryden in order to agree upon a reasonable rate of taxation for the city’s lone large industrial rate payer.

The local mill’s assessment was dropped from $52 million to just $14.4 million — a 70 per cent devaluation— in a surprise ruling by a provincial Assessment Review Board in 2012. The decision immediately resulted in a $1 million taxation shortfall for the city and left them on the hook for $7.9 million in retroactive tax rebates to the mill.

“The initial (ARB) appeal was driven by the very significant restructuring and closures of the paper operations which ended in 2009,” said Skene. “So we recognize that the recent decision resolves an important matter, it doesn’t address a remaining issue which is that of mill assessment from 2013 to 2016.”

With similar ARB decisions threatening forest communities across Ontario’s north, in December of 2013 the province’s Ministry of Finance gave seven communities permission to make significant alterations to their large industrial taxation rates in an effort to nullify losses that could not be absorbed without placing significant hardship on residential taxpayers.

It began with a 15 per cent hike and by the time the city was done in 2014, Skene says the large industrial tax rate stood at 150 per cent over its 2013 rate.

“Our objective has been consistent,” said Skene. “We’re seeking a solution that results in a predictable assessment and rate so that we’re competitive with other operations. We compete in a global commodity market and we’re very familiar with the effect of an uncompetitive cost structure. We remain ready to work with the city — to sit down and talk — to find a level of taxation that is sustainable and competitive for both the mill and the city.”

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