The Port of Prince Rupert will enjoy a capped tax rate for its facilities in Prince Rupert until 2018, all part of a provincial initiative to ensure that BC’s ports remain competitive on the world shipping scene well into the future.
The city of Prince Rupert went contrarian compared to some Lower Mainland communities which opposed a tax cap over loss of revenue complaints. Prince Rupert sided with the provincial government as long as the Provincial government kept up its side of the bargain with the subsidy program that is currently in place.
The Daily News featured the various layers of financial maneuvering in Monday’s paper.
‘PORT TAX SUBSIDY NOT A PROBLEM HERE’
Provincial government says controversial tax subsidy is crucial
By Leanne Ritchie
The Daily News
Monday, September 24, 2008
Pages one and three
Prince Rupert will continue to receive a subsidy from the province of British Columbia in exchange for capping the tax rate on port facilities, at least for the next 10 years.
The province’s Finance Minister Carole Taylor said British Columbia plans to extend that the tax relief initiative for port facilities, which started three years ago, until 2018.
“Our ports contribute billions of dollars to the provincial economy each year and provide thousands of jobs for B. C. families,” said Taylor.
“This extension will provide additional support for communities and ports operators to ensure B. C.’s ports remain competitive into the future.”
The province has been consulting B. C. municipalities affected by the tax cap for the past year, including the City of Prince Rupert.
If approved by the Legislative Assembly, as of 2009 the Ports Competitiveness Initiative will include a continued tax rate cap of $27.50/$1,000 of assessed value for, existing investments for 10 years and a continued tax rate cap of $22.50/$1,000 on new investments for 10 years on improvements constructed before Dec. 31, 2018.
It will also include increased municipal compensation and payments indexed to the rate of inflation from 2009 to 2018; and the option for municipalities to negotiate 10 year agreements with port operators using new provisions in the Community Charter.
While some municipalities in the Lower Mainland opposed the tax cap because they complained that it results in a loss of revenue when compared with the rate normally charged to major industry, the city of Prince Rupert supported the program, as long as the subsidy received by the province was continued, said Prince Rupert Mayor Herb Pond.
“We participated fully in the consultation process and we provided written comment on the draft proposal that was prepared.
“We suggested it was far beyond any one community to determine if the project was successful,” said Pond.
“The purpose was to protect the province’s port capacity and to develop the port capacity.”
“We had no opinion on whether it would be successful or not, but what we did say since it was a provincial objective that was being achieved, if it did continue, the subsidy needed to continue with it,” said Pond.
Starting in 2009, the proposed renewal would see the province increase compensation by the rate of inflation since 2004 and index future payments to inflation. In addition, the proposal provides local governments and port operators with the ability to enter into their own ports competitive agreements using new provisions in the Community Charter.
In Prince Rupert, all the businesses taxed under major industry fall under the port tax cap, with the exception of the Watson Island Pulp Mill, which does not have to pay taxes until June of 2008.
Introduced in 2003, the initiative provides property tax relief to 20 major industrial ports by capping municipal tax rates on eligible facilities and compensates local governments for the resulting impact.