shift option in 2012.
The following are my supporting remarks for the motion.
On April 2nd, Committee of the Whole -- endorsed a $275.00 “fix all rates” tax shift recommended by staff -- but split it over two years -- a split shift, if you will. The full ramifications weren’t analyzed. It seemed to arise in part out of compassion for
folks for whom the shift will pose a hardship -- it was meant to soften the blow, which is admirable.
Yet, with all due respect, we have to make this important decision with our
heads as well as our hearts.
Sometimes softening the blow makes sense. When my annual house insurance bill exceeded my municipal tax bill seven years ago, I paid monthly -- a splitting option that didn’t jeopardize my coverage. There was no increased risk from not paying the premium upfront. That’s not the case with this split-shift option.
It exposes us to an additional $ 1.4 million dollar risk on municipal taxes alone -- and we’d be on the hook for $ 1 million in taxes we collect for other bodies. (CVRD, SD, Hosp) Something we didn’t know when we suggested the split-shift option. If for any reason Catalyst taxes aren't paid this year, the split shift options leaves us $ 5.6 million short.
From a business standpoint, from a fiscal responsibility standpoint, from a good governance standpoint -- I see no wisdom in depending on one company in creditor protection for a quarter of our revenue. It’s not good policy.
Councillor Lines reminded us at COW that in 2005, a blue-ribbon citizen panel’s Business Survey, told us the main reason businesses don't invest or reinvest here is our excessive reliance on a single company.
We’ve shifted some of the tax load in recent years, but Catalyst still pays a whopping 26% of revenues. The $ 137.00 shift only lowers this to 21%. Two out of every ten dollars we use to operate this municipality would still come from the mill or worst case, not come if they close. That is too high a risk to me.
If we were to lose the $81 million that Catalyst directly contributes to our region’s economy through wages and contracts we’d be looking at a local depression the likes of which this Valley hasn’t seen for 75 years. Facing that with a $ 5.6 million shortfall would be catastrophic to our goal to make this the best place to live work and play.
When I weigh all these risks against the benefit of saving $ 137.00 per average home for one year -- I feel strongly the full shift this year is the best thing to do. It would bring our reliance down to 14%.
We’re at a crossroads. A critical juncture.
It’s about much more than tax rates. It’s about becoming truly competitive. The 2005 citizen panel said another way to bring business investment is to create more attractive communities.
Businesses want to invest in communities that invest in themselves.
Look at our growth rate. We have one of the lowest residential tax rates
yet strangely we have one of the lowest growth rates too.
We can fix our tax rates -- tell the world that North Cowichan is
open for business. Or we can waffle. We can say we want to help
build a strong local economy, but we’re not quite ready.
Whatever we decide, we’ll be sending a message -- to Catalyst’s bondholders,
to existing and prospective businesses, to people thinking of moving here and to
families hoping to stay.
As stewards of this community, we can do our part to try to protect over 2000
direct and indirect jobs. Jobs that support our fellow citizens, our
Our local economy is ailing. If economic health comes from strong businesses, and the jobs they provide -- a tax shift is part of the remedy. Council is agreed on that -- we’re struggling with the dose.
When someone you love is sick, and the doctor gives you a prescription, do you administer a half-dose and wait and see what happens?
We don’t have a no-risk option on the table. We do have an “acceptable level of risk” option. One that moves us enough out of harm’s way to survive should the mill fail. It’s the full shift option.
If we call this wrong and it does fail, we won’t get a do-over.
This is where we find ourselves. At what could be our defining moment. 275 now keeps us in the driver's seat -- not at the whim of wealthy investors from far away. We’d no
longer be letting one company decide whether or not we can keep delivering our
The Half-shift is like buying half an insurance policy, or raising the deductible so high we end up paying for almost everything anyway.
Let’s put this decision behind us and spend the rest of our term working together, to reap the fruits of the plans we’ve laid through our progressive OCP. Plans designed to bring us a prosperous, sustainable local economy with stable certain tax rates.
It is with no light heart that I support the “Fix All” shift of $275. I know it requires a sacrifice on the part of each and every North Cowichan taxpayer, including everyone at this table.
For some the sacrifice will be relatively easy (though frustrating) to absorb.
For others, it will be hard.
I don’t like having to ask my fellow citizens for such a sacrifice.
It’s not what I hoped to be doing this first year as a Councillor.But I’ve lived and breathed this issue for the last few weeks, and knowing what I know, I truly believe there is no lower option that affords an acceptable level of risk.
Thankfully taxpayers have options. Those 55 and over, or with children 18 and under, can defer all or part of their taxes. It gives those folks who are not ready time to make a plan while living in the homes they’ve chosen.
If there is any immediate good news in this story, it’s that even after the shift, North Cowichan’s taxes will be lower than our neighbours’ in Duncan, Ladysmith or Nanaimo.
The character in the Chinese language for “crisis” is also the character for “opportunity.”
This dire situation, this crisis, could be our opportunity -- the real “catalyst” we need.
A catalyst that propels us to make a change in tax policy today that gives us the best crack at creating what our children and grandchildren will need tomorrow.