Port Ed council expresses disappointment at Watson Island situation and rescinds a tax exemption

Like Prince Rupert, back in 2006 Port Edward granted a bit of tax relief to the would-be owners and operators of the Watson Island mill.

With the arrival of the New Year and no progress on the mill front, the council for the district had to come to terms with the prospect of the mill never operating again.

With that weighing over the council, they issued a call to rescind the tax relief program that had been in place since 2006, which had granted Sun Wave the tax vacation while it ostensibly was making plans to operate the mill.

With that process seemingly in limbo, as Mayor Dave MacDonald suggested the mill situation seems to be back to square one.

Perhaps, it is even further back than that, with there being no apparent movement to ever reopen the site or any indication of what is planned for the island.

The point of view out of Port Ed was found in Thursday’s Daily News.

Port Ed facing up to mill's missed deadline
By Patrick Witwicki
The Daily News
Thursday, January 10, 2008
Pages one and three

The realization that the Watson Island pulp mill may never reopen was painfully evident at Port Edward council meeting Tuesday night, as a subdued council quietly passed a bylaw that rescinds an earlier tax exemption bylaw the district and the city of Prince Rupert had given to Sun Wave regarding the former Skeena Cellulose mill.

Voices were rather soft and coarse as councillors discussed a report put forward by Chief Administrative Officer Ron Bedard, who was not present at the meeting.

"The obligations by Sun Wave have not been met," said Mayor Dave MacDonald.
"We want to rescind our agreement."

When Sun Wave originally purchased the land at Watson Island in 2006, an agreement was reached where, under the condition of getting the mill back up-and-running, taxes would be exempt or reduced for the first five years of Sun Wave's ownership.

But that was contingent on the mill resuming operations by Dec. 31, 2007.
That deadline has since passed with no sign of the mill ever reopening, so the district was forced to go with another plan.

"Part of the agreement was to have the mill up and running by January (2008), and that just isn't possible," said MacDonald.

The report reiterated the three conditions regarding the Tax Exemption bylaw: that the lands are continuously in use for the operation of the service by Sun Wave; the obligations of Sun Wave to provide the service are being continuously met; and Sun Wave continues to meet its other obligations under the agreement.

But Sun Wave hasn't done this, according to Port Edward, so the tax exemption is now null and void.

"Sun Wave has therefore failed to meet all the conditions under which the tax exemption was to be provided," said the report.

Coun. Murray Kristoff wanted to confirm whether council's decision to support the report reflected the councillors' opinion or whether their support meant they were accepting the appropriate legal advice for Port Edward.

"Is that our position, or our legal position," he said. "Shouldn't that be a little clearer? It's obviously a broken agreement ... but is it our opinion, or a legal opinion?"

MacDonald suggested that it was a little bit of both, and that it was time for the district to move in a different direction. But he also said it appears that the situation with the mill is back to square one, which doesn't sit well with him.

"One thing that upsets me is that we're in the same position as a few years ago," he said. "It's not fair that the government has us paying taxes on this."