The Debt collectors

distraint
noun

The seizure and holding of property as security for payment of a debt or satisfaction of a claim; "Originally distress was a landlord's remedy against a tenant for unpaid rents or property damage but now the landlord is given a landlord's lien" [syn: distress] Wordnet 3.0 Princeton University

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The Deadline has long passed, the ghosts of pulp and paper workers still roam the lines of the Watson Island mill, and not a dollar in tax revenue has been provided to the city of Prince Rupert since Skeena closed its doors.

So, with a bold declaration of “We don’t want taxpayers stuck on the hook for taxes again”, the city began the process of trying to recoup some of the lost monies that have dissipated into the wind since the New Skeena Forest Products era came to a close.

Sun Wave Forest Products the latest owner of the moribund pulp and paper mill on Watson Island missed the January 1, 2008 deadline to be producing pulp and paying taxes. Since then, with the exception of leasing out some warehouse space to the Coast Tsimshian for log stuffing operations and to Quickload Terminals for a container inspection station, there hasn’t been a lot of activity at Watson Island.

With that long anticipated deadline having now passed, Sun Wave now owes taxes for half of 2006 and all of 2007.

With that in mind the city has put a distraint order on the property and assets owned by Sun Wave at Watson Island, which would prevent the Chinese Government owned company from selling off the assets without having a discussion with the city.

As the city collects taxes on behalf of the province, regional district, hospital and school districts, (and owes tax revenues to all those levels of government) they now find themselves in the role of debt collectors, looking to convince the recalcitrant owners to pay up, or, or, well who really knows from here.

Perhaps the city is counting on this new year of the Rat to be one in which old debts are paid off and old ventures are started anew, well one can always hope we suppose.

The Daily News featured details of the city’s latest moves as part of a front page story in Tuesday’s paper.

CITY MOVES TO MAKE SURE IT CAN GET TAXES OWED BY MILL

By Leanne Ritchie
The Daily News
Tuesday, February 12, 2008
Pages one and two

The City of Prince Rupert has placed an order on the remaining assets of the Watson Island pulp mill to ensure it gets its taxes from the mill's owner if the facility is stripped in a sale.

In a letter to the Skeena Queen Charlotte Regional District, Prince Rupert Mayor Herb Pond said the city has put a "distraint order on the Sun Wave property and assets on Watson Island in an attempt to ensure we will be in a position to pay the non municipal agencies their taxes and also collect the municipal portions."

The city collects taxes on the property not only for itself, but also on behalf of the province, regional district, hospital district and school district.

“We have written them (the above agencies) informing them we have not yet been paid and we were doing all within our power to collect,” said Pond.

The city signed an agreement with Sun Wave Forest Products in 2006 to forego the municipal portion of those taxes, provided the company was producing pulp by Jan. 1, 2008.

Sun Wave did not meet those conditions and now owes taxes from half of 2006 and all of 2007, said the city.

Taxes on the property have ranged up to $2 million in the past.

In addition, Sun Wave also did not pay the non-municipal portion of its taxes for 2006 and 2007 to the city, leaving the city in the position of owing funds to other levels of government which it has not collected.

“It is now evident that there will be no pulp production prior to the deadline and Sun Wave will become liable for the 2006 and 2007 municipal portion as well as the non municipal portions,” said Pond in the letter.

A distraint order is an order that prevents Sun Wave from selling off assets with having a discussion with the city,” said Pond.

The idea being, if there is a sale of assets, we would want the proceeds of that to go to paying off their debt to various levels of government. We don’t want the taxpayer stuck on the hook for taxes again,” he said.

Sun Wave Forest Products purchased the mill in 2006 following the bankruptcy and sale of all the assets of New Skeena Forest Products. It is owned by the China Paper Group, a company that operates half a dozen or so pulp and paper mills in eastern China and that is 80 per cent owned by the Chinese Central Government.

While the company is not producing pulp, it has leased out part of the Watson Island facility to Quickload Container Examination Facility, the bonded warehouse operator that provides transportation and services to the Canadian Border Service Agency to assist with securing containers moving through the Fairview Terminal.

In addition, the company has leased space to the Coast Tsimshian to operate a raw log stuffing facility.

The city has already had to eat some $11 million in taxes it spent but never received from former mill owners- including New Skeena Forest Products and the provincial government.