Domtar, Dryden settle up on back taxes

Domtar and the City of Dryden have worked out a deal to lessen the sting of a tax refund to the northwestern Ontario community’s largest industrial player.

The municipality and the company jointly announced June 20 that an agreement had been reached to reduce the back taxes owned by the city to Domtar to from $7.9 million to $6.65 million. The agreement settles all outstanding municipal taxation matters from 2009 to 2016.

The issue goes back to a 2012 property assessment of the Domtar mill that saw its value drop from $51 million to $14 million.

After the municipality lost its appeal in an Ontario Superior Court in January, the municipality had to pay Domtar $7.9 million in retroactive tax rebates from the years to 2009 to 2012.

Under this agreement, Domtar also agrees to waive its current appeals for the 2013-2016 tax years and the city agrees to freeze Domtar’s industrial taxes at 2016 levels for the next two years.

As with other Northern Ontario mill towns, the ruling posed huge financial ramifications to the City of Dryden.

"After years of having this issue outstanding, a decision was made by this mayor and council to

resolve this matter by working cooperatively with one of our largest employers, Domtar,” said Nick Beyak, Dryden’s interim chief administrator. “Through positive, goal- orientated negotiation, we are pleased to announce the matter has been resolved. Domtar recognized the current fiscal situation at the city. Also, mayor and council were practical, and understanding of Domtar's position, while still keeping the interests of the citizens of Dryden as their top priority. I believe this is a win-win settlement for all concerned, and the city looks forward to a long, prosperous relationship with Domtar."

“We are very pleased to have reached this agreement with the city and we appreciate the recent

efforts made to bring this important matter to a conclusion,” said Jim Blight, general manager of the

Dryden Pulp Mill. “We believe this agreement addresses the city’s immediate financial constraints

while recognizing the mill’s need for competitive industrial taxes over the long-term.”

Under the terms of the agreement, the tax refund owed by the City of Dryden to Domtar is reduced

from $7.9 million to $6.65 million.