Catalyst Tax Break

Published Date: 2008/1/31 0:10:00
Article ID : 3536
Version 1.00
By Karen Boden

Tighten your belts; Catalyst Paper got its tax break.Port Alberni city council voted Wednesday evening to reduce industrial property taxes by an additional $125,000 per year for five years. This is on top of the $300,000 annual reduction the city agreed to one year ago. The paper-making company’s senior vice-president Ron Buchhorn had pleaded for the break Monday night, saying it would help to convince Catalyst to start-up the idle No. 4 paper machine.The final tax reduction will amount to a total of $2.125 million at the end of five years.The vote was passed Wednesday after council heard a report recommending compliance from the city’s economic development manager Pat Deakin. City councillors didn’t all readily agree, though.Coun. Cindy Solda had asked Buchhorn Monday if his request was a bullying tactic. She was not present at Wednesday’s budget presentations.Coun. Jack McLeman voiced some reservations and abstained from the vote.“I think we should wait and see if Catalyst even accepts the union’s proposal which they haven’t already done,” he said.The paper mill’s two CEP Union locals met with company officials over the past few months and made a number of sacrifices, alienating their own governing national body in the process. They hoped Catalyst would restart the downed machine. Union presidents joined forces with the employer Monday in asking the city to step up to the plate as well, with lowered taxes.McLeman was concerned because council still has to figure out how it will make up the shortfall.“Let’s not rush until we know what the cost is,” he urged prior to the vote.Coun. Hira Chopra had argued for a guarantee. He wanted some sort of a commitment from the company assuring council the No. 4 paper machine would indeed be put back into service if the tax break was approved.“If [the company does] not start No. 4 I have a hard time as a businessman to swallow this one,” said Chopra. “[Catalyst has] to do something, too.”The Catalyst board won’t decide on the deal worked out with the union until next month.Councillors Ike Patterson, Charles Mealey and Kenn Whiteman all felt it was imperative to approve the reduction and show Catalyst a commitment to keeping the paper mill in operation.Patterson called it a show of good faith saying, “Let’s face it, these unions have given up an awful lot – more than anybody ever thought they would do.”He said the issue is also about keeping the only other paper machine – the No. 5 lightweight paper making machine – up and running.The paper mill once employed 1,500 people and was the lifeblood of the community, but now employs just 200 senior workers.Mayor Ken McRae, who arranged for the presentation Monday from the unions and the paper mill as well as from Western Forest Products, has been discussing taxes with the forest industry representatives for a long time.“The time of negotiations is over,” said McRae, speaking emphatically. “No more negotiations!”“If we don’t go through with this then that machine is not going to start up,” he said. McRae said Catalyst president Richard Garneau was on the phone asking him for $2 million in cash this week.The subject was opened up for comments from the floor and three people spoke in favour of the tax reduction. One lone woman, saying she was speaking on behalf of a number of others, was opposed.The mill’s various owners have a long history of broken promises to the community, she indicated.“Enough is enough,” she said.Forest company operator Mike McKay sided with the unions. “CEP stepped up,” said McKay. “They bent, they almost broke as far as I can tell because I can’t imagine what Pete [Reyburn, CEP 592 president] would have gone through, getting it from both sides.”Catalyst’s contribution, at $5.7 million, makes up 80 per cent of the industrial property taxes paid to the city. The reduction will translate to a $100,000 savings for the company in the first year.City council also voted to strike up a key stakeholder team with the mayor, city manager, economic development manager, the regional district chair and administrator to meet presidents of Catalyst, Western Forest Products and the Coulson Group of Companies.The team would identify any other actions the city may take to ensure the big companies will continue to do business in town.Karen.boden@westcoaster.ca

Thanks to Kevin Drews of the WESTCOASTER.CA for his permission to post this article.