Resolute Forest Products wants its property taxes cut, which could have major consequences for the city.
The company is appealing to the Municipal Property Assessment Corporation in hopes its assessment will be lowered by 60 per cent. That would bring the tax assessment value of Resolute, which stands at about $72 million, to about $29 million.
If Resolute gets what it wants, the city could owe as much as $7.5 million in retroactive tax payments from 2009 to 2012.
Calling a tax reduction uncalled for, Mayor Keith Hobbs said Resolute`s attempts to have a lower assessment is an annual affair.
“We have to fight for every tax dollar we can have,” he said. “Big business have to pay for their share and not burden the taxpayer. We could stand to lose $1.8 million in taxes. They would be paying less than Intercity Shopping Centre.”
It appears that the company is looking to protect its bottom line, he added.
City manager Tim Commisso said Resolute is one of the biggest assessment properties in the city. Normally, the city relies on MPAC, but Commisso said given the magnitude of the situation they decided for a more direct approach.
“We do put together contingencies for tax appeals and assessments,” he said. “Every municipality has reserves for tax appeals. You never know. Currently, that reserve is about $12 million. We obviously don’t want to see a 60 per cent drop in assessment. That’s a significant drop.”
A similar situation also happened in Dryden when the Domtar mill property’s assessed value dropped by about 72 per cent.
Domtar won the appeal and received the reduced assessment.
Dryden media reported that the company received a $1 million reduction in industrial taxes for the year and the city had to pay a retroactive tax rebate of $5.4 million from 2009 to 2012.
Commisso said the situation with Resolute is similar but is bigger overall because of the amount of money involved.
Tbnewswatch.com attempted to contact Resolute but was not successful.
The hearing will take place sometime in June.
