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Vol. 10, No. 33, Tuesday, June 16, 2015
PHOTO BY JANICE VAN COUGHNETT
This was the scene local resident Janice Van Coughnett captured while she was travelling east on Highway 15 Saturday evening around 8:30 p.m. Some locales had hail and strong winds during the storm that began earlier that evening.
Canexus appeals to Lamont County for cancellation of 2015 property taxes Michelle Pinon Editor
It’s no secret now that Canexus is facing fiscal challenges, and company executives are looking at ways to reduce its debt load at the Bruderheim based operations terminal. Less than a week after Canexus announced the sale of its oil by rail facility to Cenovus Energy, Lamont County council was dealing with a request by the corporation to have its 2015 industrial property taxes cancelled. Interestingly enough, council went in camera last Tuesday to discuss the request, before making an out of camera motion later that afternoon. Back on April 29, 2015, Canexus Vice President of North American Terminal Operations Grant Van Shaik, wrote a letter that was addressed
to Lamont County Chief Administrative Officer Al Harvey, requesting the cancellation. The letter had been circulated to council, and was provided to the Lamont Leader upon request. The letter stated, “We ask the municipality consider the above and cancel any 2015 property taxes associated with the unit train facility and subsequently phase in the taxes starting in 2016 at 50 per cent and the remainder evenly over the next two years.” The above, that was referred to in the letter, was the previous paragraph that: “Section 347 of the Municipal Government Act allows a municipality both the ability to defer or cancel taxes, and the ability to phase in taxes. Cancellation, reduction, refund or deferral of taxes: 347 (1) If a council considers it equitable to do
so, it may, generally or with respect to a particular taxable property or business or a class of taxable property or business, do one or more of the following, with or without conditions: (a) cancel or reduce tax arrears; (b) cancel or refund all or part of a tax; (c) defer the collection of a tax. (2) A council may phase in a tax increase or decrease resulting from the preparation of any new assessment. In the letter, Van Shaik outlined the “significant challenges” the corporation is facing. Those challenges are: •Market demand for our services have been negatively impacted by the rapid and severe decline in the price of oil and the narrowing of price differentials across key markets. •Project cost overruns and schedule delays
have had a significant negative impact on our profitability. •The process of starting up a new asset in a brand new business sector has been extremely challenging. Our business is not yet operating at full capacity and as a result we have endured ongoing losses at the facility to continue in 2015. The letter went on to say, “As a result of these challenges, Canexus has sustained ongoing operating cash losses over the past five years and has not generated any returns on the capital we have invested. We expect our losses at the facility to continue in 2015.” Despite those losses, however, Van Shaik stated: “Canexus is committed to Lamont County and our operations. Over the past five years Canexus has spent over $500 million on new facilities in Bruderheim,
including over $100 million on local and regional businesses and over $10 million on annual wages and benefits. A total of 22 of our employees reside in Lamont County and its communities, 26 per cent of our current workforce. In addition, Cancexus has contributed $6.9 million in taxes and development fees to Lamont County. Our goal will always be to continue our professional relationship with the county and pay our fair share of taxes, however, in the current operating environment, we ask the county to partner with us in 2015 and the upcoming tax years in a manner that reflects our loss in value. Canexus is concerned that additional property tax for the unit train facility could significantly impact operating results starting in 2015, and we urge Lamont County to support the
long-term sustainability of the Bruderheim facility. Reeve Wayne Woldanski wanted to know how the request would affect the seniors and education portion of the tax requisition. Coun. Daniel Warawa said he would like some information from the assessor, and the remainder of councillors agreed. Then coun. Roy Anaka made the motion to defer the request from Canexus for a section 347 cancellation, reduction or deferral of taxes subject to a report from administration detailing the assessors comments and recommendations. The requisition impact on school and senior for 2015, '16, '17 and '18 comment from legal and a review of what other communities have done when approached with a similar request. The motion passed unanimously.