Catalyst Paper’s Tis’kwat mill has dropped 29 per cent in value according to the 2024 BC Assessment evaluation.
The assessed value of the mill on July 1, 2023, was $88,620,000, comprising a land value of $7,957,000 for the 360.78-acre land parcel, and $80,663,000 for the buildings. The previous year’s value was $124,527,000, with the land having been valued at $8,061,000 and the buildings valued at $116,466,000.
City of Powell River’s tax revitalization bylaw, which provided Catalyst Paper’s parent company Paper Excellence with a significant discount in the city taxation levy, expired on December 31, 2023.
According to a report from chief financial officer Mallory Denniston for a special city council meeting scheduled for January 23, the drop in assessment, by itself, would result in an estimated tax burden shift of $2 million to the remaining city property classes. However, the expiration of the tax revitalization bylaw would result in a roughly $1.6 million shift of the tax burden to the major industry class and away from the remaining property classes.
Denniston stated that this is positive news for 2024, but there are risks facing the remaining property taxpayers in future years.
Her report stated that Paper Excellence owns the Catalyst Paper Tis’kwat mill site, which holds 99 per cent of the major industry property value within municipal boundaries. Denniston stated that Paper Excellence was granted permanent closure status from BC Assessment for the 2024 assessment. She added that at the mill site, the improvements used to generate power were not depreciated but the remaining improvements were.
Denniston stated that the expiration of the revitalization tax bylaw was at the end of 2023, and that this bylaw shifted roughly $3.6 million of the 2023 property tax burden to other property classes.
“Fortunately, the end of the revitalization bylaw had a more favourable impact than the decline in the assessed value,” stated Denniston. “Using the 2023 property tax rate for Class 4 (major industry) as an estimate, the city would receive roughly $1.6 million more from the major industry class in 2024.
“This is positive news for the remaining property taxpayers in 2023 but there is still much uncertainty around the future property assessment at the mill site, resulting in a high risk to the major industry property tax burden.”
Denniston stated that the mill assessment can be appealed, which could result in lower valuation. The appeal could take up to a year to adjudicate, she added.
The future of the mill being unknown is another risk, according to Denniston.
“Future owners could alter the site to decrease the assessed value, which could greatly decrease the property tax revenue from the site,” she added.
Denniston recommended that staff be directed to incorporate three changes into the 2024 five-year financial plan draft two. The first is to establish a property tax stabilization reserve fund, the second is to increase the 2024 property tax revenue by $1.6 million, and the third was to transfer the $1.6 million increase in property tax revenue to the property tax stabilization reserve fund.
“This reserve fund would be maintained until the assessment of the mill is stable,” stated Denniston. “During this time, the reserve fund would increase when major industry property taxes are greater than the $3.3 million received in 2023 or decrease when the major industry property tax falls below $3.3 million. This is a savings program to protect taxpayers from volatility in their property taxes.”
Denniston will be presenting to a special City of Powell River Council meeting a 1:30 pm on January 23.
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