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NDP say Espanola, Ont., will be crippled if forced to repay $4 million in taxes

By: Keith Leslie, The Canadian Press

Posted: 03/4/2013 12:27 PM | Comments: 0 | Last Modified: 03/4/2013 4:49 PM

TORONTO - The New Democrats demanded immediate action Monday to protect the Ontario town of Espanola and other northern communities from costly property tax assessments on local mills.

The community of Espanola has been told it must repay Domtar — a Montreal-based paper company — $4 million after a reassessment of the value of a paper mill in the town 70 kilometres west of Sudbury.

"The situation needs to be stopped in its tracks," said NDP Leader Andrea Horwath.

"We don't want this assessment to go through the regular process and then be confirmed, so they need to be very clear right now, immediately, that this is not going to stand, and then they need to solve the problem."

Finance Minister Charles Sousa said he had instructed his officials to review the decisions by the Municipal Property Assessment Corporation, a provincial agency that has come under fire in the past for the way it values homes and businesses.

"We're going to have it reviewed, and I've already instructed the officials to take a look at the decision that was made and we'll see what it is," said Sousa.

"I want to understand the issues myself."

Local officials in Espanola warned they would have to hike property taxes on their 5,300 residents by 50 per cent this year to repay Domtar.

"It's going to cripple that community if this is not reversed or changed in some way," warned Horwath, "but the unfortunate reality is there are communities all around the province facing similar situations."

Dryden, Fort Frances and Elk Lake in James Township are also facing large bills after reassessments of some local businesses, including another Domtar mill in Dryden.

"The decisions need to get stayed so that we can actually solve the problem and we don't end up just through regular process and ingraining these decisions because then people will be stuck with them," added Horwath.

"So it's a matter of action that needs to happen right away — yes do the study and all of that — but let's get some action right away that provides some relief to municipalities so they're not stuck with these assessments."

The NDP said MPAC is one provincial agency that just can't seem to get things done right, whether it's putting a value on residential homes or paper mills.

"When a small community such as Espanola is forced to retroactively cough up a good part of its tax base to repay a global giant such as Domtar, what is the premier prepared to do to fix the flawed MPAC reassessment process," Algoma-Mantoulin New Democrat Michael Mantha asked in the legislature.

Premier Kathleen Wynne punted the question to Sousa, who said he was confident the situation could be resolved after his officials have had a look at it.

"There's a few reassessments that were made across the province, so I want to make sure everything is being done," he said. "I want to make sure it's okay."

Domtar is one of the world's largest pulp and paper companies with revenues of $5.6 billion in 2011.

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