Despite arrangements in other communities with Catalyst, it's unlikely local pulp mill can get same bargain

Robert Barron, The Daily News
Published: Thursday, April 22, 2010

Permitting lower municipal tax rates for Nanaimo's Harmac pulp mill in exchange for access to the mill's plentiful water rights and effluent systems isn't a course the city would likely follow, says Mayor John Ruttan.

Ruttan said he plans to study the details of the recent deal struck between Powell River and Catalyst Paper that will allow that city to treat the community's liquid waste using the mill's effluent system in exchange for a lower property tax rate.

But he said he doesn't expect that any "special deals" will be made between the city and Harmac.

Talks have been ongoing for years over joint use of Harmac's water systems by the city, the Snuneymuxw First Nation and the mill to meet current and increased demands in the future as plans move forward for extensive residential developments in Nanaimo's south end.

Harmac, which uses up to 7.5 million litres of water a day for its milling activities when in full operation with three production lines, has its own dam, piping and water reserves from Fourth Lake and water licences that exceed the mill's needs.

Harmac is in the middle of its own tax battle and has withheld most of its municipal tax bill in Nanaimo for 2009 (about $2.8 million) until an appeal it has filed over its property tax assessment from the B.C. Assessment Authority has been settled, which is expected later this spring.

"If we made a special deal with Harmac and lowered its industrial tax rate while leaving the tax rates of all our other industrial taxpayers the same, I expect we'd be facing some court challenges," Ruttan said.

"Besides, Harmac officials have indicated that they are pleased with the city's strategy in recent years to drop our industrial tax rate by more than 50% to bring them more in line with the current economic environment in the city and B.C. We'll look at the deal between Catalyst and Powell River, but I don't like special deals." In 2007, the city increased water rates 5% to ensure it will have enough money to keep up with future project costs that will see Nanaimo's water supply through the next 50 years. During the next 15 years, plans are to build a new storage reservoir that will hold up to four billion gallons of water, estimated to cost about $65 million, but Ruttan said those plans could be postponed for some time if a deal is cut with Harmac.

"However, I expect there could be a number of challenges that would have to be addressed before any deal could be finalized," Ruttan said.

"These include the fact that Harmac might require more water as its operations increase and DFO has conditions around the amount of water that is required in the Nanaimo River to ensure the health of its fish populations."

RBarronnanaimodailynews.com

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