North Cowichan looks to phase in residential tax hike over two years

North Cowichan poised to proceed with first half of a $275 tax shift from industry to homeowners.

North Cowichan residents will be paying for a tax shift away from Crofton’s Catalyst mill.

But it will probably be spread across two years.

That was the message a packed house heard Monday night during a lengthy and heated budget meeting hosted by council on a variety of tax options aimed at reducing North Cowichan’s dependence on the troubled Crofton mill.

Councillors eventually recommended a complete overhaul of the municipality’s tax structure that will reduce the tax rate for heavy industry, light industry, forestry and farming, and increase it for business, recreation, utilities and residential.

Heavy industry and residential will be the areas facing the most significant change. A decrease of about $2.7 million for heavy industry (mostly the mill) will be paid for by an increase of $275 to the average homeowner — half of which will be felt this year.

The tax shift needs to happen, according to council, because economic times have changed ten-fold.

Coun. John Koury said getting this tax shift underway immediately will save the community from being a one-horse town tied to the failing mill.

“We need to have a major, major growth spurt in this community,” Koury said. “The goal here is to become less reliant on industry.”

“I see the way we’re struggling and that a big hit is really gonna hurt,” said Coun. Barb Lines. “We need to move away from our dependence on a single industry.”

According to Coun. Kate Marsh, it is not a matter of if the mill will shut down, it’s a matter of when.

“A $275 tax shift would really level everything out. I want us to sell this community and try our darnedest,” Marsh said as she swayed between the $275 over 24 months and biting the bullet now so North Cowichan isn’t in “this dire straight” in the near future.

Marsh, Mayor Jon Lefebure and Coun. Ruth Hartmann ultimately favoured proceeding with the entire $275 this year. But they were voted down by the other four, who voted for the two-year phase-in.

Coun. Al Siebring said easing the blow to the homeowner was one argument favouring the phased-in approach. Another was using next year’s budget process to find efficiencies that could make next year’s leap unnecessary.

A mostly-hostile crowd preferred the phased-in option, though it was clearly seen as the lesser of two evils.

“Assume the higher level of risk,” said homeowner Brian Wallis. “A moderate tax adjustment over a long term eases the pain for everybody.”

The meeting was full of voices booming back-and-forth, followed by cheering, and jousting with council as the two sides clashed.

Council continuously asked citizens to “remain civil” during various statements against the looming tax hike. Later, Koury was asked to “stop lecturing the audience” after both sides were seemingly exhausted with each other.

Resident Cathy Schmidt earned some of the night’s biggest applause for calling out council for its lack of restraint.

“The level of spending here has not changed with economic times.” she said.

By recommending a $137.50 shift this year, council will not necessarily be bound to repeating that in 2013. The $275 tax hike figure is based on the average assessment of a North Cowichan home. Individual properties will pay more or less depending on the value of their home.

Catalyst, which currently represents 26 per cent of the municipal tax base, is in creditor protection and facing an uncertain future.

Council is scheduled to meet on April 24 to solidify the items discussed yesterday. A final decision is due on May 15.