District sparks provincial grant review

When it comes to small town tax rates, Houston is a squeaky wheel that may get some provincial attention.

When it comes to small town tax rates, Houston is a squeaky wheel that may get some provincial attention.

District staff called on Victoria last fall to explain an unexpected drop in Houston’s Small Communities Grant—a grant for towns under 19,000 people that makes up between five and 10 per cent of Houston’s annual operating budget.

At first, said Director of Finance Tandra Bamsey, staff were told Houston was receiving a lower grant because upgrades at the Canfor sawmill have raised Houston’s tax base.

In 2011, Canfor replaced a pair of ageing kilns at the Houston mill, significantly boosting its production.

Nechako-Lakes MLA John Rustad, who looked into the issue at the District’s request, said ministry staff estimate that the Canfor upgrade meant Houston received $25,000 less in grant funding.

But what the province didn’t realize is that Houston waived the extra tax it could have collected from Canfor for that fiscal year, and it will only tax the full value of the upgraded mill four years from now.

Rustad said that kind of incentive is the sort of industrial tax policy the provincial government wants to see, and Houston shouldn’t be penalized for it.

“As a matter of fact, Houston’s request has sparked an entire review of the program within the ministry,” he said.

Industrial tax policy is a leading issue for B.C. municipalities this year, and other reviews are underway.

In January, B.C.’s finance minister Kevin Falcon struck an expert panel to review how municipalities set taxes on business and industry.

That review was partly triggered by conflicts in four small B.C. towns where Catalyst Paper Corp. refused to pay municipal taxes that it said were high enough to put it out of business.

“I think industrial tax rates here in Houston and actually across the corridor in my riding are pretty reasonable,” Rustad said. “There are some areas of the province where they’re not reasonable at all.”

But even if B.C. municipalities agree that reviewing industrial tax policy is a good idea, several, including Houston, are unhappy with the current make-up of Minister Falcon’s expert panel.

The seven-member panel includes corporate auditors, UBC academics, business executives and lobbyists, but no representative for local government.

Houston council has sent a letter demanding better representation. The panel is due to finish its report by Aug. 31.